Listing Particulars

LISTING PARTICULARS NOT FOR GENERAL CIRCULATION
IN THE UNITED STATES
Zlomrex International Finance S.A.

€170,000,000 8 1⁄ 2% Senior Secured Notes due 2014
The Senior Secured Notes will be guaranteed on a senior basis by Złomrex S.A. and certain of its subsidiaries.
Zlomrex International Finance S.A., a société anonyme organized under the laws of France (the “Issuer”), is offering
€170,000,000 aggregate principal amount of its 8 1⁄ 2% Senior Secured Notes due 2014 (the “Notes”) which will be guaranteed by
Złomrex S.A., a spólka akcyjna organized under the laws of Poland (the “Company”), and certain of the Company’s subsidiaries
(collectively, the “Guarantors”) (the “Offering”).
The Notes will bear interest at a rate of 8.50% per annum. Interest on the Notes will be payable on February 1 and
August 1 of each year, beginning on August 1, 2007. At any time on or after February 1, 2011, the Issuer may redeem all or part of
the Notes by paying a specified premium. Prior to February 1, 2011, the Issuer may also redeem all or part of the Notes if the Issuer
pays a “make-whole” premium. In addition, on or before February 1, 2010, the Issuer may redeem up to 35% of the Notes with the
net proceeds from one or more equity offerings.
If the proposed acquisition of a 74.9% interest in voestalpine Stahlhandel GmbH (“voestalpine Stahlhandel GmbH”) by
the Company (the “Austrian Acquisition”) is not consummated on or before June 30, 2007 or the share purchase agreement
among the Company, Donauländische Baugesellschaft m.b.H., a wholly-owned subsidiary of voestalpine AG, and voestalpine
Stahl GmbH relating to the Austrian Acquisition (the “Share Purchase Agreement”) is terminated at any time prior thereto, Notes
in a principal amount of €60 million will be subject to a special mandatory redemption. The special mandatory redemption price
is 101% of the aggregate principal amount of the Notes to be redeemed on the date thereof plus accrued and unpaid interest. If, as
anticipated, this Offering is consummated prior to the consummation of the Austrian Acquisition, the Issuer will deposit with the
escrow agent an amount of cash and cash equivalents so that the escrowed funds are sufficient to pay the special mandatory
redemption price, when and if due. After the special mandatory redemption (if it were to occur), €110 million aggregate principal
amount of the Notes would remain outstanding (unless otherwise redeemed or repurchased).
The Notes will be senior secured obligations of the Issuer and will rank equal in right of payment with all of the Issuer’s
existing and future senior indebtedness and will rank senior to all of the Issuer’s existing and future indebtedness that is
subordinated in right of payment to the Notes. The Notes will be guaranteed (each, a “Guarantee”) on a senior basis by the
Guarantors. Each Guarantee will rank equal in right of payment with all of the Guarantors’ existing and future unsubordinated
indebtedness and will rank senior to all of the Guarantors’ existing and future indebtedness that is subordinated in right of
payment to the Notes.
The Notes will be secured by a first-priority pledge of the shares of capital stock of the Issuer and the Subsidiary
Guarantors (as defined herein), a first-priority assignment of the on-lending of the offering proceeds from the Issuer to the
Company and, upon release of the escrowed funds upon the consummation of the Austrian Acquisition, a first-priority pledge
over the shares of voestalpine Stahlhandel GmbH, a first-priority assignment of the on-lending of part of the escrowed funds to
voestalpine Stahlhandel GmbH and by other specified security. See “Description of the Notes — Security”.
These Listing Particulars include information on the terms of the Notes and the Guarantees, including redemption and
repurchase prices, covenants and transfer restrictions. See “Description of the Notes”. References in these Listing Particulars to
Offering Memorandum are to the Listing Particulars.
Application has been made for the Notes to be listed on the official list of the Luxembourg Stock Exchange and traded
on the Euro MTF Market. We expect the Notes will be made ready for delivery in book-entry form through Euroclear and
Clearstream on January 29, 2007, against payment in immediately available funds.
The issue of the Notes and the execution of the Indenture and the other documents to be entered into in connection with
the Offering were approved by the ordinary general meeting of the shareholders of the Issuer held on January 26, 2007 and were
decided on January 26, 2007 by the board of directors of the Issuer in accordance with its articles of association, after having an
independent appraiser appointed by the Tribunal de Commerce of Evry carry out a verification of the assets and liabilities
(vérification de l’actif et du passif) in accordance with article L.228-39 of the Code of commerce.
Investing in the Notes involves a high degree of risk. Please see the section entitled “Risk Factors”
beginning on page 19.
We have not registered and will not register the Notes or the Guarantees under US federal securities laws or the
securities laws of any other jurisdiction. The Notes and the Guarantees are being offered and sold in the United States
only to qualified institutional buyers in reliance on Rule 144A of the US Securities Act of 1933, as amended (the “US
Securities Act”) and in transactions outside the United States in accordance with Regulation S of the US Securities Act.
Please see the sections entitled “Notice to Investors” and “Plan of Distribution” for additional information about eligible
offerees and transfer restrictions.
Price: 100% plus accrued interest from the issue date.
The date of these Listing Particulars is January 26, 2007.

OFFERING MEMORANDUM NOT FOR GENERAL CIRCULATION
IN THE UNITED STATES

€170,000,000 8 1⁄ 2% Senior Secured Notes due 2014
The Senior Secured Notes will be guaranteed on a senior basis by Złomrex S.A. and certain of its subsidiaries.
Zlomrex International Finance S.A., a société anonyme organized under the laws of France (the “Issuer”), is offering
€170,000,000 aggregate principal amount of its 8 1⁄ 2% Senior Secured Notes due 2014 (the “Notes”) which will be guaranteed by
Złomrex S.A., a spólka akcyjna organized under the laws of Poland (the “Company”), and certain of the Company’s subsidiaries
(collectively, the “Guarantors”) (the “Offering”).
The Notes will bear interest at a rate of 8.50% per annum. Interest on the Notes will be payable on February 1 and
August 1 of each year, beginning on August 1, 2007. At any time on or after February 1, 2011, the Issuer may redeem all or part of
the Notes by paying a specified premium. Prior to February 1, 2011, the Issuer may also redeem all or part of the Notes if the Issuer
pays a “make-whole” premium. In addition, on or before February 1, 2010, the Issuer may redeem up to 35% of the Notes with the
net proceeds from one or more equity offerings.
If the proposed acquisition of a 74.9% interest in voestalpine Stahlhandel GmbH (“voestalpine Stahlhandel GmbH”) by
the Company (the “Austrian Acquisition”) is not consummated on or before June 30, 2007 or the share purchase agreement
among the Company, Donauländische Baugesellschaft m.b.H., a wholly-owned subsidiary of voestalpine AG, and voestalpine
Stahl GmbH relating to the Austrian Acquisition (the “Share Purchase Agreement”) is terminated at any time prior thereto, Notes
in a principal amount of €60 million will be subject to a special mandatory redemption. The special mandatory redemption price
is 101% of the aggregate principal amount of the Notes to be redeemed on the date thereof plus accrued and unpaid interest. If, as
anticipated, this Offering is consummated prior to the consummation of the Austrian Acquisition, the Issuer will deposit with the
escrow agent an amount of cash and cash equivalents so that the escrowed funds are sufficient to pay the special mandatory
redemption price, when and if due. After the special mandatory redemption (if it were to occur), €110 million aggregate principal
amount of the Notes would remain outstanding (unless otherwise redeemed or repurchased).
The Notes will be senior secured obligations of the Issuer and will rank equal in right of payment with all of the Issuer’s
existing and future senior indebtedness and will rank senior to all of the Issuer’s existing and future indebtedness that is
subordinated in right of payment to the Notes. The Notes will be guaranteed (each, a “Guarantee”) on a senior basis by the
Guarantors. Each Guarantee will rank equal in right of payment with all of the Guarantors’ existing and future unsubordinated
indebtedness and will rank senior to all of the Guarantors’ existing and future indebtedness that is subordinated in right of
payment to the Notes.
The Notes will be secured by a first-priority pledge of the shares of capital stock of the Issuer and the Subsidiary
Guarantors (as defined herein), a first-priority assignment of the on-lending of the offering proceeds from the Issuer to the
Company and, upon release of the escrowed funds upon the consummation of the Austrian Acquisition, a first-priority pledge
over the shares of voestalpine Stahlhandel GmbH, a first-priority assignment of the on-lending of part of the escrowed funds to
voestalpine Stahlhandel GmbH and by other specified security. See “Description of the Notes — Security”.
This Offering Memorandum includes information on the terms of the Notes and the Guarantees, including redemption
and repurchase prices, covenants and transfer restrictions. See “Description of the Notes”.
Application has been made for the Notes to be listed on the official list of the Luxembourg Stock Exchange and traded
on the Euro MTF Market. We expect the Notes will be made ready for delivery in book-entry form through Euroclear and
Clearstream on January 29, 2007, against payment in immediately available funds.
Investing in the Notes involves a high degree of risk. Please see the section entitled “Risk Factors”
beginning on page 19.
We have not registered and will not register the Notes or the Guarantees under US federal securities laws or the
securities laws of any other jurisdiction. The Notes and the Guarantees are being offered and sold in the United States
only to qualified institutional buyers in reliance on Rule 144A of the US Securities Act of 1933, as amended (the “US
Securities Act”) and in transactions outside the United States in accordance with Regulation S of the US Securities Act.
Please see the sections entitled “Notice to Investors” and “Plan of Distribution” for additional information about eligible
offerees and transfer restrictions.
Price: 100% plus accrued interest from the issue date.
Deutsche Bank
The date of this Offering Memorandum is January 23, 2007.
IMPORTANT INFORMATION ABOUT THIS OFFERING MEMORANDUM
You should not assume that the information contained in this Offering Memorandum is accurate as of any
date other than the date of this Offering Memorandum. The business, financial condition, results of operations
and prospects of the Company and its subsidiaries (collectively, the “Group”) may have changed since that date.
This Offering Memorandum is a document that we are providing only to prospective purchasers of the
Notes. Each prospective purchaser is authorised to use this Offering Memorandum solely for the purpose of
considering the purchase of the Notes described herein. You should read this Offering Memorandum before
making a decision whether to purchase the Notes.
This Offering Memorandum may only be used for the purposes for which it is published.
You are responsible for making your own examination of the Group and your own assessment of the
merits and risks of investing in the Notes. You should consult with your own advisors as needed to assist you in
making your investment decision and to advise you whether you are legally permitted to purchase the Notes. By
purchasing the Notes, you will be deemed to have acknowledged that:
Š you have reviewed this Offering Memorandum;
Š this Offering Memorandum relates only to offers and sales with respect to the Notes;
Š you have had an opportunity to request all additional information that you need from us;
Š Deutsche Bank AG, London Branch (the “Initial Purchaser”) is not responsible for, and is not making
any representation to you concerning, the Group’s future performance or the accuracy or completeness
of this Offering Memorandum; and
Š no person is authorised to give any information or to make any representation not contained in this
Offering Memorandum in connection with the issue and sale of the Notes, and any information or
representation not contained herein must not be relied upon as having been authorised by or on behalf
of the Issuer.
Neither the Notes nor the Guarantees have been or will be registered under the US Securities Act or the
securities laws of any state of the United States and may not be offered or sold within the United States or to or
for the account or benefit of, US persons (as defined in Regulation S under the US Securities Act
(“Regulation S”)) except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act.
The Notes are being offered and sold outside the United States to non-US persons in reliance on
Regulation S and within the United States to “qualified institutional buyers” (“QIBs”) in reliance on Rule 144A
under the US Securities Act (“Rule 144A”). Prospective purchasers are hereby notified that the sellers of the Notes
may be relying on the exemption from the provisions of Section 5 of the US Securities Act provided by Rule 144A.
For a description of these and certain other restrictions on offers, sales and transfers of the Notes and the distribution
of this Offering Memorandum, see the sections entitled “Plan of Distribution” and “Notice to Investors”.
The Notes have not been approved or disapproved by the US Securities and Exchange Commission
(the “SEC”), any state securities commission in the United States or any other US regulatory authority,
nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the
accuracy or adequacy of this Offering Memorandum. Any representation to the contrary is a criminal
offence in the United States.
The Notes are subject to restrictions on transferability and resale and may not be transferred or resold
except as permitted under the US Securities Act and applicable state securities laws pursuant to registration
thereunder or exemption therefrom. You should be aware that you may be required to bear the financial risks of
this investment for an indefinite period of time.
This Offering Memorandum does not constitute an offer to sell or an invitation to subscribe for or purchase
any of the Notes in any jurisdiction in which such offer or invitation is not authorised or to any person to whom it is
unlawful to make such an offer or invitation. Laws in certain jurisdictions may restrict the distribution of this
document and the offer and sale of the Notes. Persons into whose possession this Offering Memorandum or any of
the Notes are delivered must inform themselves about and observe those restrictions. Each prospective purchaser of
the Notes must comply with all applicable laws and regulations in force in any jurisdiction in which it purchases,
offers or sells the Notes or possesses or distributes this document, and must obtain any consent, approval or
permission required under any regulations in force in any jurisdiction to which it is subject or in which it purchases,
offers or sells the Notes, and neither we nor the Initial Purchaser shall have any responsibility therefore.
i
We have summarised certain documents and other information, but we refer you to the actual documents
for a more complete understanding of what we discuss in this document. You should not consider any
information in this document to be legal, business or tax advice. You should consult your own attorney, business
advisor and tax advisor for legal, business and tax advice regarding an investment in the Notes. In making an
investment decision, you must rely on your own examination of the business of the Issuer and the Group and the
terms of this Offering and the Notes, including the merits and risks involved.
We reserve the right to withdraw this Offering of the Notes at any time. We and the Initial Purchaser also
reserve the right to reject any offer to purchase the Notes in whole or in part for any reason or no reason and to
allot to any prospective purchaser less than the full amount of Notes sought by it.
In connection with this issue, Deutsche Bank AG, London Branch or persons acting on its behalf
may over-allot or effect transactions with a view to supporting the market price of the Notes at a level
higher than that which might otherwise prevail. However, Deutsche Bank AG, London Branch is under no
obligation to do this. Such stabilizing, if commenced, may be discontinued at any time and must be
brought to an end after a limited period ending no later than 30 calendar days after the date on which the
Issuer receives the proceeds from this Offering of the Notes.
NOTICE PURSUANT TO TREASURY CIRCULAR 230

PURSUANT TO US TREASURY DEPARTMENT CIRCULAR 230, YOU ARE ADVISED THAT
THE SUMMARY HEREIN OF CERTAIN US FEDERAL INCOME TAX CONSIDERATIONS IS NOT
INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, BY ANY TAXPAYER FOR
THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER
UNDER THE US INTERNAL REVENUE CODE. IT WAS WRITTEN TO SUPPORT THE
PROMOTION OR MARKETING OF THE NOTES. EACH TAXPAYER SHOULD SEEK ADVICE
BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
NOTICE TO POLISH INVESTORS

Unless this Offering Memorandum for the Notes has been approved by either the Polish competent
authority for the approval of prospectuses for the public offering of securities in Poland or the admission of
securities to trading on a European Union-regulated market in Poland or the relevant competent authority in a
European Union member state and Poland has received a certificate of such approval with a copy of the
prospectus and translation of its summary as required under the Act on Public Offering, Conditions Governing
the Introduction of Financial Instruments to Organised Trading, and Public Companies of 29 July 2005 (Journal
of Laws — Dziennik Ustaw — of 2005, No. 184 Item 1539) (the “Act on Public Offering”) the Notes may not be
publicly offered in Poland or admitted to trading on a European Union-regulated market in Poland. Pursuant to
Art. 3 of the Act on Public Offering, “public offering” means “communication in any form and by any means,
made within the Republic of Poland and addressed to at least 100 persons, or to an unspecified addressee, which
contains sufficient information on the securities to be offered and the terms and conditions of their acquisition, so
as to enable an investor to decide to purchase these securities”.
Each of the Issuer and Guarantors has represented that it will not admit any Notes to trading on the
regulated market in Poland nor offer any Notes in Poland as part of its initial distribution in the event that any
such offer would constitute a “public offering” in Poland as defined above.
NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED
STATUTES, ANNOTATED, 1955, AS AMENDED (“RSA 421-B”), WITH THE STATE OF NEW
HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A
PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE
SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE
AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION
OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATION
OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR
TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE
PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THIS PARAGRAPH.
ii
NOTICES TO CERTAIN EUROPEAN RESIDENTS
Luxembourg. The Notes may not be offered or sold to the public in the Grand Duchy of Luxembourg,
directly or indirectly, and neither this Offering Memorandum nor any other circular, prospectus, form of
application, advertisement, communication or other material may be distributed, or otherwise made available in
or from, or published in, the Grand Duchy of Luxembourg, except for the sole purpose of the admission of the
Notes to the Official List of the Luxembourg Stock Exchange and admission of the Notes for trading on the Euro
MTF Market and except in circumstances which do not constitute a public offer of securities to the public.
United Kingdom. This Offering Memorandum is directed solely at persons who (i) are outside the United
Kingdom or (ii) have professional experience in matters relating to investments or (iii) are persons falling within
Article 49(2)(a) to (d) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such
persons together being referred to as “relevant persons”). This Offering Memorandum must not be acted on or relied
on by persons who are not relevant persons. Any investment or investment activity to which this Offering
Memorandum relates is available only to relevant persons and will be engaged in only with relevant persons.
France. This Offering Memorandum has not been prepared in the context of a public offering in France
within the meaning of Article L.411-1 of the Code monétaire et financier and Title I of Book II of the Règlement
Général of the Autorité des marchés financiers (the “AMF”) and therefore has not been approved by, registered
or filed with the AMF. Consequently, the Notes are not being offered, directly or indirectly, to the public in
France and this Offering Memorandum has not been and will not be released, issued or distributed or caused to
be released, issued or distributed to the public in France or used in connection with any offer for subscription or
sale of the Notes to the public in France. Offers, sales and distributions of the Notes in France will be made only
to qualified investors (investisseurs qualifiés) as defined in, and in accordance with, Articles L.411-2 and
D.411-1 to D.411-4 of the Code monétaire et financier, on the condition that (i) this Offering Memorandum shall
not be circulated or reproduced (in whole or in part) by such qualified investors and (ii) they undertake not to
transfer the Notes, directly or indirectly, to the public in France, other than in compliance with applicable laws
and regulations pertaining to a public offering (and in particular Articles L.411-1, L.411-2, L.412-1 and L.621-8
of the Code monétaire et financier).
Austria. No prospectus has been or will be approved and/or published pursuant to the Austrian Capital
Markets Act (Kapitalmarktgesetz) as amended. Neither this document nor any other document connected
therewith constitutes a prospectus according to the Austrian Capital Markets Act and neither this document nor
any other document connected therewith may be distributed, passed on or disclosed to any other person in
Austria, save as specifically agreed with the Initial Purchaser. No steps may be taken that would constitute a
public offering of the Notes in Austria and the Offering of the Notes may not be advertised in Austria. The Initial
Purchaser has represented and agreed that it will offer the Notes in Austria only in compliance with the
provisions of the Austrian Capital Markets Act and all other laws and regulations in Austria applicable to the
offer and sale of the Notes in Austria.
Germany. The Offering of the Notes is not a public offering in the Federal Republic of Germany.
Spain. The Notes may not be offered or sold in Spain except in accordance with the requirements of the
Spanish Securities Market Law (Ley 24/1988, de 28 de Julio, del Mercado de Valores) as amended and restated
and Royal Decree 291/1992 on Issues and Public Offering of Securities (Real Decreto 291/1992, de 27 de Marzo,
sobre Emisiones y Ofertas Públicas de Venta de Valores) as amended and restated (“R.D. 291/92”), and
subsequent legislation.
This Offering Memorandum is neither verified nor registered in the administrative registries of the
Comisión Nacional del Mercado de Valores, and therefore a public offer for subscription of the Notes will not be
carried out in Spain. Notwithstanding that and in accordance with article 7 of R.D. 291/92, a private placement of
the Notes addressed exclusively to institutional investors (as defined in Article 7.1(a) of R.D. 291/92) may be
carried out in accordance with the requirements of R.D. 291/92.
The Netherlands. The Notes are not, will not and may not be offered, as part of their initial distribution
or at any time thereafter, other than:
(a) in The Netherlands, to persons who trade or invest in securities in the conduct of their profession or
business (which include banks, stockbrokers, insurance companies, investment undertaking pension
funds, other institutional investors and finance companies and treasury departments of large
enterprises (“professional investors”));
(b) in circumstances where one of the exceptions to or exemptions from the prohibition contained in
article 3(1) of the Securities Transactions Supervision Act 1995 (“Wet toezichteffectenverkeer
1995”) applies; or
iii
(c) otherwise, to persons who are established, domiciled or resident (“are resident”) outside The
Netherlands.
Italy. The Offering of the Notes has not been cleared by CONSOB (the Italian Securities Exchange
Commission) pursuant to Italian securities legislation and, accordingly, no Notes may be offered, sold or
delivered, nor may copies of this Offering Memorandum or of any other document relating to the Notes be
distributed in the Republic of Italy, except (i) to qualified investors (operatori qualificati), other than natural
persons, as defined in Article 31, second paragraph, of CONSOB Regulation No. 11522 of July 1, 1998, as
amended, provided that such professional investors will act in their capacity and not as depositaries or nominees
for other shareholders or (ii) in circumstances which are exempted from the rules on solicitation of investments
pursuant to Article 100 of Legislative Decree No. 58 of February 24, 1998, as amended (the “Italian Financial
Services Act”), its implementing CONSOB regulations including Article 33, first paragraph, of CONSOB
Regulation No. 11971 of May 14, 1999, as amended. Any offer, sale or delivery of the Notes or distribution of
copies of this Offering Memorandum or any other document relating to the Notes in the Republic of Italy under
(i) or (ii) above must be (a) made by an investment firm, bank or financial intermediary permitted to conduct
such activities in the Republic of Italy in accordance with the Italian Financial Services Act and Legislative
Decree No. 385 of September 1, 1993 (the “Banking Act”), as amended, and the implementing guidelines of the
Bank of Italy, and (b) in compliance with Article 129 of the Banking Act and the implementing guidelines of the
Bank of Italy pursuant to which the issue or the offer of securities in the Republic of Italy may need to be
preceded and followed by an appropriate notice to be filed with the Bank of Italy depending, inter alia, on the
aggregate value of the securities issued or offered in the Republic of Italy and their characteristics, and in
accordance with any other applicable laws and regulations including any relevant regulations which may be
imposed by CONSOB or the Bank of Italy. In any case, the Notes cannot be offered or sold to any individuals in
Italy either in the primary market or the secondary market.
iv
ENFORCEABILITY OF JUDGMENTS
The Issuer is a société anonyme organized under the laws of the Republic of France, and the Company is
a spółka akcyjna under the laws of the Republic of Poland. Most of our subsidiaries are limited liability
companies or joint stock companies organized under the laws of the Republic of Poland, other than AB Stahl AG
and Złomrex China Ltd., which are organized under the laws of Germany and Hong Kong, respectively, and
voestalpine Stahlhandel GmbH, organized under the laws of Austria, and its subsidiaries if the Austrian
Acquisition (as defined herein) is closed. All of the directors and executive officers of the Issuer, the Company
and the Guarantors are resident outside the United States, and all or a substantial portion of the assets of such
persons, the Issuer, the Company and the Guarantors are located outside the United States. As a result, it may not
be possible for investors to effect service of process within the United States upon the Issuer, the Company, the
Guarantors or such persons or to enforce against any of them in United States courts judgments obtained in
United States courts including judgments predicated upon the civil liability provisions of the securities laws of
the United States or any state or territory within the United States.
France
Our French counsel, Orrick Rambaud Martel, has advised us that the United States and France are not
party to any bilateral treaty providing for reciprocal recognition and enforcement of judgments, other than
arbitral awards, rendered in civil and commercial matters. Accordingly, a judgment rendered by any US federal
or state court based on civil liability, whether or not predicated solely upon US federal or state securities laws,
enforceable in the United States, would not directly be recognized or enforceable in France. A party in whose
favor such judgment was rendered could initiate enforcement proceedings (procédure d’exequatur) in France
before the relevant civil court (Tribunal de Grande Instance) having jurisdiction. Enforcement in France of such
US judgment can be obtained following adversary proceedings if the civil court is satisfied that the following
conditions have been met (which conditions, under prevailing French case law, do not include a review by the
French court on the merits of the foreign judgment):
Š such US judgment was rendered by a court having jurisdiction over the matter in accordance with
French rules of international conflicts of jurisdiction (including, without limitation, whether the
dispute is clearly connected to the United States) and the French courts did not have exclusive
jurisdiction over the matter;
Š the court that rendered such judgment has applied a law which would have been considered applicable
and/or appropriate under French rules of international conflicts of laws;
Š such US judgment does not contravene French international public policy rules, both pertaining to the
merits (i.e. fundamental principles of French law) and to the procedure of the case;
Š such US judgment is not tainted with fraud and the choice of jurisdiction is not fraudulent; and
Š such US judgment does not conflict with a French judgment or a foreign judgment which has become
effective in France and there are no proceedings pending before French courts at the time enforcement
of the judgment is sought and having the same or similar subject matter as such US judgment.
In addition, the discovery process under actions filed in the United States could be affected by the
reserves France inserted in its Act of Adherence, as amended on January 19, 1987, to the Hague Convention of
March 18, 1970.
Our French counsel has also advised us that according to article 14 and 15 of the French Civil Code, in
the event that a party brings an action outside France against a French national (either a company or an
individual), French courts will still have exclusive jurisdiction over a French national (who has French
citizenship at the time the suit is filed) which could require the non-French court to refuse to adjudicate the case
in question. The French national may refuse to be brought before non-French courts and require the complainant
to bring his action in France. In addition, a French national may decide to bring an action before the French
courts, regardless of the nationality of the defendant. However, the French national may waive its rights to refuse
to be brought before a non-French court or to bring an action before a French court against a non-French
defendant.
Poland
Our Polish counsel has advised us that the United States and Poland are not party to a treaty providing for
reciprocal recognition and enforcement of judgements, other than arbitral awards, rendered in civil and commercial
v
matters. Accordingly, a judgment rendered by any US federal or state court, based on civil liability, whether
predicated solely upon US federal or state securities laws, enforceable in the United States, would not be directly
recognized or enforceable in the Republic of Poland.
We have also been advised by our Polish counsel that a foreign court judgment issued by the court of a
country which is not a party to a treaty providing for reciprocal recognition and enforcement of judgments may
be recognised in the Republic of Poland by a Polish court provided that:
Š there is reciprocity between the Republic of Poland and the country whose court issued such
judgment;
Š such judgment is final in the country whose court issued the same;
Š the case does not belong to a category of matters that, pursuant to Polish law or the provisions of an
international treaty to which the Republic of Poland is a party, are restricted to the jurisdiction of
Polish courts or the courts of a third state;
Š neither party has been deprived of the right to defend its rights before a court or of the right to have a
proper representative before the court if the party itself was incapable of taking legal actions before
the court;
Š the case had not been finally decided by, or had not been brought before, the relevant Polish court
prior to the date on which the foreign court judgment became final; and
Š if Polish law was applicable to the matter, the court applied Polish law or if the court applied foreign
law, such foreign law was not substantially different from Polish law in respect of such matter.
Reciprocity is not required in matters which, under the laws of the Republic of Poland, belong to the
exclusive jurisdiction of courts of the country whose court issued the judgment.
In addition, our Polish counsel has informed us that a foreign court judgment issued by the court of a
country which is not a party to a treaty providing for reciprocal recognition and enforcement of judgments may
be enforceable in the territory of the Republic of Poland provided that the judgment is enforceable in the country
whose court issued the judgment and all conditions referred to above are satisfied.
Austria
The United States and Austria are not party to any bilateral treaty providing for reciprocal recognition and
enforcement of judgments, other than arbitral awards, rendered in civil and commercial matters. Accordingly, a
judgment rendered by any US federal or state court based on civil liability, whether or not predicated solely upon
US federal or state securities laws, enforceable in the United States, would not be recognized or enforceable in
Austria. A party in whose favor such judgment was rendered could initiate enforcement proceedings in Austria
before the relevant civil court having jurisdiction only after having obtained a judicial enforceability statement
(Vollstreckbarkeitserklärung) rendered by an Austrian court competent under the rules of the Austrian
Enforcement Act (Exekutionsordnung). However, Austrian courts will not issue such enforceability statements,
as no bilateral treaty or regulation exists which authenticates the reciprocity with respect to judgments rendered
by US courts.
vi
FORWARD-LOOKING STATEMENTS
This Offering Memorandum includes forward-looking statements as encouraged by the US Private
Securities Litigation Reform Act of 1995 regarding, among other things, our plans, strategies and prospects, both
business and financial. All statements contained in this document other than historical information are forward-
looking statements. Forward-looking statements include, but are not limited to, statements that represent our
beliefs concerning future operations, strategies, financial results or other developments, and contain words and
phrases such as “may”, “expect”, “should”, “continue”, “could”, “plan”, “will”, “aim”, “potential” or similar
expressions. Because these forward-looking statements are based on estimates and assumptions that are subject
to significant business, economic and competitive uncertainties, many of which are beyond our control or are
subject to change, actual results could be materially different. Although we believe that our plans, intentions and
expectations reflected in or suggested by these forward-looking statements are reasonable as of the date
attributable to them, we cannot assure you that we will achieve or realize these plans, intentions or expectations.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that
could cause actual results to differ materially from the forward-looking statements include, but are not limited to:
Š cyclical economic conditions affecting the construction and machine industries in Poland and Europe;
Š raw material and energy price increases affecting our production costs or the supply of such raw
materials and energy being disrupted;
Š other increases in our cost base including changes in the statutory minimum wage;
Š increasing consolidation among our customers;
Š risks related to our competitive position in our existing and new markets;
Š current and future acquisitions, partnerships and joint ventures;
Š government regulation;
Š risks associated with our structure, the Notes, the Guarantees and our other indebtedness;
Š changes in international, legal, administrative or economic conditions; and

Š other factors discussed in this Offering Memorandum.
Consequently, such forward-looking statements should be regarded solely as our current plans, estimates
and beliefs. We do not intend, and do not undertake any obligation to update any forward-looking statements to
reflect future events or circumstances after the date of such statements. You should interpret all subsequent written
or oral forward-looking statements attributable to us or to persons acting on our behalf as being qualified by the
cautionary statements in this Offering Memorandum. You should review carefully the section captioned “Risk
Factors” in this Offering Memorandum for a more complete discussion of the risks of an investment in the Notes.
INDUSTRY AND MARKET DATA

Information related to markets, market size, market share, growth rates and other industry data pertaining
to our business and markets contained in this Offering Memorandum consists of estimates based on
management’s knowledge of our sales and markets and our own research. This research includes private and
publicly available surveys or studies conducted by, or data and reports compiled by third parties not affiliated
with us. In many cases, there is no readily available external information, whether from trade associations,
government bodies or other organizations, to validate market-related analyses and estimates, thus requiring us to
rely on internally developed estimates based on our experience and investigation of market conditions. Where we
have compiled, extracted and reproduced market or other industry data from external sources, neither the Issuer,
the Company nor the Initial Purchaser has independently verified the data. While we believe these sources are
reliable, we cannot assure you of the accuracy and completeness of, and take responsibility only for the
extraction of such information from the source material. Similarly, while we believe our internal estimates to be
reasonable, they have not been verified by independent sources, and therefore we cannot assure you of their
accuracy.
In addition, in some cases we have made statements in this Offering Memorandum regarding our industry
and competitive position based on our experiences and our investigation of market conditions. We cannot assure
you that any of these assumptions are accurate or correctly reflect our competitive position within the industry,
and none of our internal surveys or information has been verified by independent sources, which may have
estimates or opinions regarding industry related data information that may differ from our own.
vii
CERTAIN DEFINITIONS
In this Offering Memorandum, the following terms have the following meanings:
“Acquisition On-Loan” has the meaning assigned to it in “Summary — Our Corporate and Financing
Structure”.
“Acquisitions” means the Austrian Acquisition and the Polish Acquisitions.
“Austrian Acquisition” means our acquisition of a 74.9% interest in voestalpine Stahlhandel GmbH, an
indirect steel trading subsidiary of voestalpine AG, with an option to acquire a further 25.1% interest, as
described in “Summary — Recent Developments — voestalpine Stahlhandel GmbH” and “The Transactions —
The Austrian Acquisition” in this Offering Memorandum”.
“AB Stahl” means AB Stahl AG, a subsidiary of the Company.
“Audited Consolidated Financial Statements” have the meaning assigned to them in “Presentation of
Financial Information”.
“Bank BPH Offer” has the meaning assigned to it in “Description of Other Indebtedness”.
“Bank Pekao” has the meaning assigned to it in “Description of Other Indebtedness”.
“BRE Bank Offer” has the meaning assigned to it in “Description of Other Indebtedness”.
“Centrostal Companies” means Centrostal, Centrostal Opole and Centrostal Górnośla˛ski.
“Centrostal Górnośla˛ski” means Centrostal Górnośla˛ski Sp. z o.o., a subsidiary of the Company.
“Centrostal Opole” means POWH Centrostal S.A. in Opole, a subsidiary of the Company.
“Centrostal” means Centrostal S.A. in Gdansk, a subsidiary of the Company.
“CKM “Włókniarz”” means Cze˛stochowski Klub Motocyklowy, a joint stock company founded on
October 23, 2006.
“Collateral” has the meaning assigned to it in “The Offering”.
“Company” means Złomrex S.A. but not its subsidiaries.
“Consolidated Financial Statements” have the meaning assigned to them in “Presentation of Financial
Information”.
“Donauländische Baugesellschaft” means Donauländische Baugesellschaft m.b.H., a wholly-owned
subsidiary of voestalpine AG, and one of the two sellers of voestalpine Stahlhandel GmbH.
“EC” has the meaning assigned to it in “Business — Regulatory Environment — EC regulatory regime”.
“ECSC” has the meaning assigned to it in “Business — Regulatory Environment — EC regulatory
regime”.
“EEA Agreement” has the meaning assigned to it in “Business — Regulatory Environment — EC
regulatory regime”.
“EFTA” has the meaning assigned to it in “Business — Regulatory Environment — EC Regulatory
regime”.
“Ferrostal Łabe˛dy” means Ferrostal Łabe˛dy Sp. z o.o., a subsidiary of the Company.
“Fortis Agreement” has the meaning assigned to it in “Description of Other Indebtedness”.
“Group”, “we”, “our” and “us” means the Company and its subsidiaries from time to time and “member
of the Group” and “Group company” means any of the Company or its subsidiaries.
“gross profit” means for purposes of segmental reporting revenues minus cost of sales, except where
indicated otherwise.
“Guarantee” has the meaning assigned to it in “The Offering”.
“Guarantors” means the Company and certain subsidiaries of the Company identified as guarantors in
“Summary — Our Corporate and Financing Structure”.
“HSW-HSJ” means Huta Stalowa Wola–Huta Stali Jakościowych S.A., the successor company that
resulted from the merger of HSW-WB and Huta Stalowa Wola–Huta Stali Jakościowych Sp. z o.o. in November
2006 and a subsidiary of the Company.
viii
“HSW-WB” means Huta Stalowa Wola–Walcownia Blach Sp. z o.o., a former subsidiary of the
Company. Effective November 2, 2006, HSW-WB and Huta Stalowa Wola–Huta Stali Jakościowych Sp. z o.o.
merged and the successor company is Huta Stalowa Wola–Huta Stali Jakościowych S.A.
“Indenture” has the meaning assigned to it in “The Offering”.
“Intercompany Proceeds Note” has the meaning assigned to it in “Summary — Our Corporate and
Financing Structure”.
“IFRS” means International Financial Reporting Standards as adopted by the European Union.
“Issuer” means Zlomrex International Finance S.A.
“Kapitał” means Kapitał Sp. z o.o., a subsidiary of the Company.
“Korba” has the meaning assigned to it in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — History”.
“Mandatorily Redeemable Notes” has the meaning assigned to it in “The Offering”.
“National Fund” means the National Fund for the Protection of Environment and Water Management
(Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej).
“Nowa Jakość” means Nowa Jakość-Organizacja Odzysku S.A., a subsidiary of the Company.
“Offering Memorandum” means this Offering Memorandum.
“Other Division Companies” has the meaning assigned to it in “Summary — Our Corporate and
Financing Structure”.
“Parallel Debt” has the meaning assigned to it in “Risk Factors — The security over the shares of the
Issuer and the Subsidiary Guarantors and, upon consummation of the Austrian Acquisition, voestalpine
Stahlhandel GmbH, will not be granted directly to the holders of the Notes but rather through “parallel debt”
obligations”.
“Polish Acquisitions” means our acquisitions of HSW-HSJ and HSW-WB in January 2006.
“Polish GAAP” means generally accepted accounting principles in Poland.
“Polish Financial Supervisory Commission” means Komisja Nadzoru Finansowego.
“Pro Forma Financial Information” has the meaning assigned to it in “Presentation of Financial
Information”.
“Principal Obligations” has the meaning assigned to it in “Risk Factors — The security over the shares of
the Issuer and the Subsidiary Guarantors and, upon consummation of the Austrian Acquisition, voestalpine
Stahlhandel GmbH, will not be granted directly to the holders of the Notes but rather through “parallel debt”
obligations.
“Refinancing” has the meaning assigned to it in “The Transactions”.
“Revolving Credit Facilities” means our new up to €40 million revolving credit facilities established for
working capital purposes, executed on or prior to the Issue Date. See “The Transactions — Revolving Credit
Facilities” and “Description of Other Indebtedness — Revolving Credit Facilities”.
“Share Pledges” has the meaning assigned to it in “The Offering”.
“Share Purchase Agreement” means the share purchase agreement entered into on December 20, 2006
among the Company, Donauländische Baugesellschaft and voestalpine Stahl GmbH under which the Company
agreed to acquire a 74.9% interest in voestalpine Stahlhandel GmbH with an option to acquire a further 25.1%
interest.
“Subsidiary Guarantors” has the meaning assigned to it in “Description of the Notes”.
“Surviving Indebtedness” has the meaning assigned to it in “Summary — Our Corporate and Financing
Structure”.
“Szopienice” means Odlewnia Metali Szopienice Sp. z o.o., a subsidiary of the Company.
“tonnes” refer to metric tonnes.
“Transactions” has the meaning assigned to it in “The Transactions”.
“Trustee” means The Bank of New York.
ix
“US GAAP” means generally accepted accounting principles in the United States.
“Unaudited Financial Statements” have the meaning assigned to them in Presentation of Financial
Information”.
“voestalpine Share Pledge” has the meaning assigned to it in “The Offering”.
“voestalpine Stahl GmbH” means voestalpine Stahl GmbH, a subsidiary of voestalpine AG, and one of
the two sellers of voestalpine Stahlhandel GmbH.
“voestalpine Stahlhandel GmbH” means voestalpine Stahlhandel GmbH, a limited liability company
under Austrian law, and its subsidiaries.
“voestalpine AG” means the ultimate parent company of voestalpine Stahlhandel GmbH before the
closing of the Austrian Acquisition.
“Zbrojarnia” means Złomrex Zbrojarnia Sp. z o.o., a subsidiary of the Company.
“Złomrex China” means Złomrex China Ltd., a subsidiary of the Company.
“Złomrex-Finans” means Złomrex-Finans Sp. z o.o., a subsidiary of the Company.
“Złomrex Pruszków” means Złomrex Pruszków Sp. z o.o., a subsidiary of the Company.
“Złomrex Share Pledges” has the meaning assigned to it in “The Offering”.
“ZW-WB” means Zakład Walcowniczy-Walcownia Bruzdowa Sp. z o.o., a subsidiary of the Company.
“2007, 2006, 2005, 2004, 2003 and 2002” means, respectively, our fiscal year ended December 31 of the
referenced year.
x
PRESENTATION OF FINANCIAL INFORMATION
Our audited consolidated financial statements as of and for the years ended December 31, 2005 and 2004
and the related notes thereto, which are included elsewhere in this Offering Memorandum (the “Audited
Consolidated Financial Statements”), and our unaudited consolidated financial statements as of and for the nine
months ended September 30, 2006 and 2005 and the related notes thereto, which are included in this Offering
Memorandum (the “Unaudited Consolidated Financial Statements”, together with the Audited Consolidated
Financial Statements, the “Consolidated Financial Statements”), have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (“IFRS”), which differ in
significant respects from generally accepted accounting principles in the United States (“US GAAP”).
The audited consolidated financial statements as of and for the year ended December 31, 2005 of our
subsidiaries HSW-HSJ and HSW-WB1, both of which are included elsewhere in this Offering Memorandum,
have been prepared in accordance with Polish GAAP, which differ in significant respects from IFRS and US
GAAP.
The audited consolidated financial statements of voestalpine Stahlhandel GmbH as of and for the fiscal
year ended March 31, 2006 and the unaudited consolidated financial statements as of and for the six months
ended September 30, 2006 and 2005, which are included elsewhere in this Offering Memorandum, have been
prepared in accordance with IFRS. As described elsewhere in this Offering Memorandum, we signed a share
purchase agreement on December 20, 2006 to acquire a 74.9% interest in voestalpine Stahlhandel GmbH, with an
option to acquire a further 25.1% interest, and we anticipate that the acquisition will close during the first half of
2007.
This Offering Memorandum also includes certain unaudited pro forma consolidated financial information of
the Group giving effect to the Polish Acquisitions, which we completed in the first quarter of 2006, and the Austrian
Acquisition, which we anticipate will close in the first half of 2007, using the purchase method of accounting and
the assumptions and adjustments described in the notes accompanying that information (the “Pro Forma Financial
Information”). This unaudited pro forma consolidated financial information assumes that the Acquisitions occurred
on the dates specified therein. The adjustments made to reflect such Acquisitions are based on the accounting
records of each such acquired company, which are recorded in Polish GAAP for HSW-HSJ and HSW-WB and
which are recorded in IFRS for voestalpine Stahlhandel GmbH.
For a summary of the differences between IFRS and US GAAP see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Summary of Significant Differences between IFRS
and US GAAP”.
Some financial information in this Offering Memorandum has been rounded and, as a result, the
numerical figures shown as totals in this Offering Memorandum may vary slightly from the exact arithmetic
aggregation of the figures that precede them.
CURRENCY PRESENTATION
In this Offering Memorandum, unless otherwise indicated, all references to the “EU” are to the European
Union, all references to “Euro”, “EUR” or “€” are to the single currency of the participating member states of the
European and Monetary Union of the Treaty Establishing the European Community, as amended from time to
time; all references to the “United States” or the “US” are to the United States of America and all references to
“US dollars”, “USD” and “US$” are to the lawful currency of the United States of America; and all references to
“Poland” are to the “Republic of Poland” and all references to “PLN”, “zloty” and “Polish zloty” are to the
lawful currency of the Republic of Poland.
For convenience, PLN amounts translated into euros in this Offering Memorandum have been translated at
the rate of PLN 3.98 = €1.00, the approximate rate of exchange prevailing as of September 30, 2006. However,
these translations should not be construed as representations that the zloty amounts have been, could have been or
could be converted into euros at those or any other rates.
1 Effective November 2, 2006, HSW-WB and HSW-HSJ merged. For purposes of the presentation of the
information in the section “Unaudited Pro Forma Consolidated Financial Data” and in the “Index to Consolidated
Financial Statements” in this Offering Memorandum, we refer to HSW-HSJ and HSW-WB to mean the two
separate entities before their merger. Unless otherwise specifically indicated, all other references in this Offering
Memorandum to HSW-HSJ are to the successor company resulting from the merger, Huta Stalowa Wola-Huta
Stali Jakościowych S.A.
xi
EXCHANGE RATE DATA
The following tables show, for the periods indicated, the high, low, period average and period end
11:00 A.M. (Warsaw time) buying/selling rate average of the dealer banks as published by the National Bank of
Poland for the zloty (the “NBP Euro Exchange Rate”) expressed as zloty per €1.00. The NBP Euro Exchange
Rate is provided solely for your convenience. No representation is made that the Euro was, could have been, or
could be, converted into zloty at these rates or any other rate. For information regarding the effect of currency
fluctuations on our results of operations, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors — Risks Related to Our Business — Our business may be adversely
affected by exchange rate fluctuations” in this Offering Memorandum.
The NBP Euro Exchange Rate for January 22, 2007 was PLN 3.84 = €1.00.
Zloty per Euro

Period Period
Year High Low average end
2002 ................................................. 4.21 3.50 3.86 4.02
2003 ................................................. 4.72 3.98 4.40 4.72
2004 ................................................. 4.91 4.05 4.53 4.08
2005 ................................................. 4.28 3.82 4.02 3.86
2006 ................................................. 4.11 3.76 3.90 3.83
Period Period
Month High Low average end
September 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.99 3.94 3.97 3.98
October 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.98 3.86 3.90 3.88
November 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.87 3.80 3.82 3.82
December 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 3.79 3.81 3.83
January 2007 (through January 22) . . . . . . . . . . . . . . . . . . . . . . . . . 3.89 3.83 3.87 3.84
xii
SUMMARY
This overview may not contain all the information that may be important to prospective purchasers of the
Notes and, therefore, should be read in conjunction with this entire Offering Memorandum, including the more
detailed information regarding our business and the financial statements and related notes included elsewhere in
this Offering Memorandum. Prospective purchasers of the Notes should also carefully consider the information
set forth under the heading “Risk Factors”. Certain statements made in this Offering Memorandum include
forward-looking statements that also involve risks and uncertainties as described under “Forward-Looking
Statements” in this Offering Memorandum.
Our Business
We are the largest supplier of scrap metal, the second largest seller of semi-finished steel products and the
fifth largest seller of finished steel products in Poland based on volume. Our operations are fully integrated and
span the entire steel production process, including one of the largest retail distribution networks in Poland and,
upon the closing of our anticipated acquisition of voestalpine Stahlhandel GmbH, the leading warehousing and
steel distribution company in Austria, with significant operations in Central and Eastern Europe. Our business is
divided into four segments, which include:
Š Scrap metal segment. We purchased approximately 692,000 tonnes of scrap metal in 2005, of which
approximately 57% was used by our semi-finished products segment and approximately 43% was sold
to external customers in Poland, and we had a market share of approximately 12.5% of the scrap metal
purchased in Poland in 2005;
Š Semi-finished products segment. We sold approximately 172,000 tonnes of semi-finished steel

products to external customers in 2005, of which 138,000 tonnes were sold in the Polish market, and
we had a market share of approximately 28% of semi-finished steel products sold to external
customers in Poland in 2005;
Š Finished products segment. We sold approximately 220,000 tonnes of finished steel products to
external customers in 2005, substantially all of which were sold in the Polish market, and we had a
market share of approximately 3% of finished steel products sold to external customers in Poland in
2005 and approximately 5% in 2006 as a result of recent acquisitions; and
Š Other segment. We sold approximately 26,000 tonnes of non-ferrous scrap and non-ferrous scrap
products to external customers in 2005.
Our strong position in the scrap metal and semi-finished products segments enables us to reduce margin
volatility and to secure feedstock scrap requirements for our own production facilities. This enables us to use our
own sources of scrap metal supply to produce semi-finished and finished products in times of major shortages of
scrap metal in the scrap metal market.
Founded in 1990, we have rapidly transformed ourselves from a scrap metal trading company into a fully
integrated steel producer through internal growth and acquisitions. Through a number of acquisitions over the
past few years, we have increased our production capacity and increased the range of production of our semi-
finished and finished products. We believe that our increased production of high grade semi-finished and finished
steel products, coupled with our ability to produce small batches of both of these products tailor made to our
customers’ needs, have given us a competitive advantage over larger steel producers in Poland such as Mittal
Steel Poland (now Arcelor Mittal) whose production facilities produce large quantities of lower grade steel. We
have complemented our production capabilities with a retail distribution network in Poland for our finished
products through separate acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole in 2006,
becoming one of the largest retail distribution networks in Poland. On December 20, 2006, we entered into a
share purchase agreement to acquire a 74.9% interest in voestalpine Stahlhandel GmbH, the leading warehousing
and steel distribution company in Austria in terms of revenue and volume with significant operations in Central
and Eastern Europe, with an option to acquire a further 25.1% interest (the “Share Purchase Agreement”) (the
“Austrian Acquisition”). We believe that the Austrian Acquisition will enable us to secure demand from end
customers for our finished products, achieve economies of scale in our finished products segment by enabling us
to reach our end customers and build an international retail distribution network to expand our geographic reach.
We also believe that through the Austrian Acquisition our retail distribution network business will become one of
the most important factors driving growth in our overall business in the future.
1
Despite an unexpected sharp decrease in steel prices and a general market downturn in the Polish steel
industry in 2005 which caused our revenues to decline, we have generally increased our revenues over the last
three years. Our total consolidated revenues for the year ended December 31, 2005 amounted to approximately
PLN 976.2 million (€245.3 million), compared to approximately PLN 1,194.9 million (€300.2 million) for the
year ended December 31, 2004. Our total consolidated revenues for the nine months ended September 30, 2006
amounted to PLN 1,417.0 million (€356.0 million), compared to PLN 737.7 million (€185.4 million) for the nine
months ended September 30, 2005. On a pro forma basis giving effect to the Transactions, we had total
consolidated revenues of PLN 2,404.2 million (€604.1 million) for the nine months ended September 30, 2006
and PLN 2,599.8 million (€653.2 million) for the year ended December 31, 2005.
Our Segments and Products

We organize our business into four segments: scrap metal, semi-finished products, finished products and
other.
Scrap Metal
We are the largest supplier of scrap metal in Poland based on volume with a market share of
approximately 12.5% of the scrap metal purchased in Poland in 2005. Our scrap metal segment consists of
buying, processing, and selling scrap metal to our customers and for our own internal use. Our scrap metal
collection network consists of 14 existing scrap metal yards situated close to our customers primarily in regions
in southern Poland which have the best sources of scrap metal due to the concentration of heavy industry. An
additional scrap metal yard in north eastern Poland is under construction. We also purchase scrap metal from a
large number of scrap metal traders (including collection branches and industrial producers) which are serviced
by our container fleet. In 2005, we obtained approximately 42% of our entire scrap metal supply from our own
scrap metal collection network, with the remaining approximately 58% being purchased from scrap metal traders.
This enables us to use our own sources of scrap metal supply to produce semi-finished and finished steel
products in times of major shortages of scrap metal in the scrap metal market. We have a broad and stable
customer base for scrap metal, including CMC Zawiercie, Celsa Huta Ostrowiec, Moravia Steel, and Mittal Steel
Poland (now Arcelor Mittal) and also leverage our extensive scrap metal collection network to provide
competitive pricing to our customers. We intend to establish two additional scrap metal yards in our scrap metal
collection network each year, at a cost of approximately PLN 4.0 million (€1.0 million) per yard, to gain more
access to sources of scrap metal supplies until we have the geographic reach to cover all potential primary scrap
suppliers in Poland. Our scrap metal segment is our third largest segment in terms of revenues, accounting for
approximately 19.3% and 10.9%, respectively, of our consolidated revenues and gross profit for the year ended
December 31, 2005 and 11.9% and 6.6%, respectively, of our consolidated revenues and gross profit for the nine
months ended September 30, 2006.
Semi-Finished Products
We are the second largest seller of semi-finished steel products in Poland based on volume with a market
share of approximately 28% of sales to external customers in 2005 and the fifth largest producer of semi-finished
steel products based on volume with a market share of approximately 4% in 2005. Our semi-finished products
segment consists of buying and processing scrap metal into steel billets and selling some of those steel billets to our
customers with the remainder for our own internal use. Approximately 54% of the semi-finished products produced
at our steel mills and purchased by us on the market from third parties were used by our finished products business
in 2005, with the remaining approximately 46% sold to customers such as Huta Łabe˛dy, Man Ferrostal, Huta Pokój
S.A. and Stalexport. We offer a broad range of semi-finished products, concentrating primarily on steel square and
round billets and to a much lesser extent on blooms and sheet slabs. Unlike many of our competitors, we can
produce small batches of high grade, higher margin steel billets for special applications, and we have access to scrap
metal, our primary raw material in the production of semi-finished products, through our scrap metal collection
network. Our semi-finished products segment is our second largest segment in terms of revenues, accounting for
24.3% and 52.8%, respectively, of our consolidated revenues and gross profit for the year ended December 31, 2005
and 15.6% and 21.0%, respectively, of our consolidated revenues and gross profit for the nine months ended
September 30, 2006. We expect growth in this segment as growth in the automotive and tube rolling industries in
Poland and Europe continues.
Finished Products
We are the fifth largest producer of finished steel products in Poland with a market share of
2
approximately 5% in 2005. In addition to selling products that we produce, we also buy finished products on the
market and resell them to our customers. We are the fifth largest seller of finished steel products in Poland based
on volume with a market share of approximately 3% of sales to external customers in 2005 and approximately
5% in 2006 as a result of recent acquisitions. We buy steel billets from our semi-finished products segment and
other companies, process them into finished products and sell them to our customers. We have an extensive
range of customers inside Poland, principally in the construction, machine, forging, shipbuilding, defense and
mining industries, including ThyssenKrupp, Baustal, Bodeko and Stalexport. We have a highly diversified
product offering which includes long products such as flat, plain and reinforced steel bars and flat products (steel
sheets and strips). We have recently started offering higher margin products such as special application products
for the mining industry and steel sheet products with military applications (armor jackets and steel plating for
tanks). We benefit from our ability to produce a full range of products in small batches unlike our major
competitors, our access to our extensive scrap metal collection network, our concentration on high grade finished
steel products with high margins and our stable customer base.
Our recent acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole have provided us with
a retail distribution network through which to sell our finished products directly to end customers throughout
Poland. Our finished products segment is our largest segment in terms of revenues, accounting for 37.8% and
9.8%, respectively, of our consolidated revenues and gross profit for the year ended December 31, 2005 and
54.0% and 57.2%, respectively, of our consolidated revenues and gross profit for the nine months ended
September 30, 2006. We expect substantial growth in this segment as growth in the construction and machine
industries in Poland and Europe continues. In addition, the Austrian Acquisition will also provide us with a retail
distribution network in Austria and Central and Eastern Europe through which to sell our finished products to
voestalpine Stahlhandel GmbH’s customers. We believe that through the Austrian Acquisition our retail
distribution network will become one of the most important factors driving growth in our overall business in the
future as well as helping to reduce volatility in end product sales by selling directly to end customers. voestalpine
Stahlhandel GmbH’s revenues for the fiscal year ended March 31, 2006 were €303.8 million and for the six
months ended September 30, 2006 were €172.0 million.
Other
We buy, sell and process non-ferrous scrap into finished products, buy and sell non-ferrous products and
recycle materials such as plastic foil, aluminum, paper and other products. Our products in our other segment
include non-ferrous rods, strips, and ingots. Our other segment further diversifies our exposure to certain
commodities. Since this segment is exposed to the commodity prices of non-ferrous products, it is not exposed to
steel price volatility. In 2005, the other segment was the most profitable one, as non-ferrous metals did not decline
in price as steel did. We rely on a stable customer base which primarily includes KGHM Metraco, the Hutmen
Group, and Alumetal Kety. Our other segment is our fourth largest segment both in terms of revenues and gross
profit, accounting for 18.7% and 26.5% of consolidated revenues and gross profit for the year ended December 31,
2005 and 18.5% and 15.1% of our consolidated revenues and gross profit for the nine months ended September 30,
2006.
Competitive Strengths
Strong retail distribution network. Our strong retail distribution network enables us to reach and
respond to a growing number of customers. With the recent acquisitions of Centrostal Górnośla˛ski, Centrostal
and Centrostal Opole and the anticipated acquisition of voestalpine Stahlhandel GmbH headquartered in Austria,
we will have created a retail distribution network for our finished products which is the largest in Austria and one
of the largest in Poland and in Central and Eastern Europe. See “Business — Finished Products —
Distribution — Centrostal Companies — and — voestalpine Stahlhandel GmbH” in this Offering Memorandum.
Our acquisition of voestalpine Stahlhandel GmbH, the leading warehousing and steel distribution company in
Austria in terms of revenue and volume with significant operations in Central and Eastern Europe, will not only
increase distribution capabilities for our finished products in Austria and Central and Eastern Europe and enable
us to market additional products to our growing end customer base, but we believe it will trigger growth by
allowing us to interact with end customers directly and thus enable us to more quickly adjust to changes in
demand and to ultimately procure more business from our customers. We believe that through the Austrian
Acquisition our retail distribution business will become one of the most important factors driving growth in our
overall business in the future.
Vertically-integrated business. As a vertically-integrated steel producer, our exposure to external
margin volatility is limited because our overall margin is comprised of three independent components (steel
scrap, retail distribution and production), two of which (steel scrap and retail distribution) are relatively stable
3
throughout the steel cycle. Unlike our competitors, we can also increase the supply of scrap metal on short notice
to meet increasing demand from our semi-finished and finished products segments because we have access
through our own scrap metal collection network and purchases from scrap metal traders to almost twice the
amount of scrap metal necessary for our steel mills to produce our semi-finished and finished products.
Largest scrap metal supplier in Poland. We are the largest scrap metal supplier in Poland based on
volume, having purchased approximately 692,000 tonnes of scrap metal in 2005, of which approximately 57%
was used by our semi-finished and finished products segments and approximately 43% was sold to external
customers in Poland. We currently have the largest scrap metal collection network in Poland with 14 existing
scrap metal yards and an additional scrap metal yard in northeastern Poland is under construction. We had a
market share of 12.5% of the scrap metal purchased in Poland in 2005. Our scrap metal yards are strategically
located in key regions primarily in southern Poland which are in close proximity to scrap sources due to the
concentration of heavy industry in that region. Our scrap metal yards are also specially equipped with modern
equipment to handle large volumes of scrap metal and are close to major transportation centers to facilitate the
distribution and trade of scrap metal. Due to scrap metal being a primary material for the production of our semi-
finished and finished steel products, our position as the largest scrap metal supplier in Poland also enables us to
ensure that we can meet our own production requirements for these products, even in times of major shortages of
scrap metal in the market. In addition, we believe that being the largest scrap metal supplier in Poland we have an
advantage over our competitors because we have the most modern facilities to process scrap metal, as well as
fleets of specialized vehicles and containers to facilitate collecting scrap and modern machinery such as shear
machines to press and cut scrap, and we have a long established brand name and long-term relationship with our
customers.
Flexible cost structure. Our cost structure is more flexible than that of most of our competitors because
we use electric arc furnace technology where scrap metal is the primary raw material accounting for approximately
90% of raw materials used as compared to blast furnaces which rely predominantly on iron ore as a raw material.
Historically, scrap prices have had a close correlation to steel prices which has the effect of allowing us to pass on
feedstock price increases to our customers and of reducing volatility. In addition, we have the ability to source scrap
metal from our scrap metal segment, and in times of changing market conditions we can adjust quickly to changes
in the market since scrap purchase prices and our steel product sales are typically set monthly. By comparison,
companies using blast furnaces cannot easily negotiate lower prices of iron ore because of the concentration of iron
ore producers and because contracts with iron ore producers are usually set on a yearly basis with fixed prices. In
addition, electric arc furnaces require less machinery, fixed assets and employees to operate relative to blast
furnaces and can be switched off immediately, without paying any additional costs. We also do not lose expensive
refractory materials which are crucial to steel production in blast furnaces and are lost when blast furnaces are shut
down. Variable costs accounted for 86.5% of our total costs in 2005. We believe our cost structure will become
even more flexible after the Austrian Acquisition because voestalpine Stahlhandel GmbH’s retail distribution
business is characterized by an even higher level of variable costs than we have had historically.
Our modern production facilities produce higher quality niche products. We have the most modern
production facilities in Poland which enable us to produce high grade semi-finished and finished products tailor
made in small batches for our customers. Our modern steelworks at Ferrostal Łabȩdy and HSW-HSJ, for
example, can produce a full range of steel billets (classes I through VI at Ferrostal Łabȩdy and classes I through
VIII at HSW-HSJ). We are shifting our focus to concentrate even more on high grade steel (classes IV to VIII).
Our rolling mills also specialize in the production of high quality niche products such as a full range of flat bars,
including special application bars at ZW-WB, small diameter reinforcement bars at Ferrostal Łabe˛dy and high
grade thick steel sheets at HSW-HSJ. In addition, there are a limited number of competitors in the Polish market
concentrating on the production of these tailor-made products. As a result, we can earn higher margins because
we can offer small batches of tailor made products to the forging, automotive and machine industries and because
we have a growing number of specialty customers as a result of our expansion in the retail distribution business.
Strong demand for steel. Growth in steel production is driven by increased demand for steel products
by domestic and international customers. In Poland, demand for steel production has increased because of
increased investments in infrastructure projects related to Poland’s accession to the European Union, general
economic growth and increased demand from construction and machine building industries. The favorable
outlook for our products in the region is also supported by an improvement in the manufacturing industry in
Germany and Eastern Europe. Additionally, based on strong economic growth and accelerating industry
consolidation, the global steel market has generally performed strongly over the past three years as has the Polish
market. Global and Polish demand has also been increasing despite swings in prices. Global crude steel
production increased by 6% in 2005 to approximately 1,139 million tonnes and is expected to reach
approximately 1,200 million tonnes in 2006.
4
Dynamic and experienced management team. Our management team has a proven track record in
managing operations under its control and turning around newly acquired underperforming assets. For example,
we acquired Ferrostal Łabe˛dy in 2004 and improved efficiencies in that business to such an extent that
production increased from 280,000 tonnes in 2003 to 336,000 tonnes in 2005, the utilization rate increased from
83% to 96% over that same period and sufficient cash flows were generated to repay the purchase price and
outstanding debt of that business within 18 months from the date of purchase. In addition, our president and vice
president have been with the Company since 1990 and have amassed significant experience in the changing
dynamics of the Polish steel market during that time. Our senior management team combines extensive industry
and marketing expertise with financial and management expertise.
Strategy
Further Develop Retail Distribution Network. We intend to develop our retail distribution network further
to grow our business. Our recent acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole form the
basis of our retail distribution network in Poland. See “Business — Finished Products — Distribution — Centrostal
Companies” in this Offering Memorandum. On December 20, 2006, we also entered into a share purchase agreement
to acquire a 74.9% interest in voestalpine Stahlhandel GmbH, the leading warehousing and steel distribution company
in Austria with significant operations in Central and Eastern Europe, with an option to acquire a further 25.1% interest,
in part to benefit from and grow its retail distribution network. See “— Recent Developments — voestalpine
Stahlhandel GmbH” in this section and “The Transactions — The Austrian Acquisition” and “Business — Finished
Products — Distribution — voestalpine Stahlhandel GmbH” in this Offering Memorandum. We believe that with an
expanded retail distribution network, we will achieve economies of scale resulting in better margins in our finished
products business and build an international retail distribution network to reach and offer a wider range of finished
products directly to more end customers. In addition, the retail distribution network will allow us to carry products of
other steel producers which are complementary to our product portfolio. This will enable us to strengthen our
relationships with a broader customer base by offering them a wider range of products. We believe that through the
Austrian Acquisition our retail distribution business will become one of the most important factors driving growth in
our overall business in the future.
Expand Product Range to Higher Margin Niche Products. We intend to expand the range of our high
grade semi-finished and finished steel products, focusing on higher margin niche products in both businesses.
Specifically, we intend to increase our production of square and round billets in our semi-finished products
segment which are used mainly in the forging and tube rolling industries and long products such as flat, plain and
reinforcement steel bars and flat products (steel sheets and strips) in our finished products segment, which are
mainly used in the automotive, machine, forging, and shipbuilding industries, all of which offer higher margins
than lower grade steel products produced by our major competitors in Poland. We will also focus on producing
finished products with special applications for the mining and defense industries. We believe that by expanding
our product range to higher margin niche products we will not only increase our business with our current
customers, but also develop new relationships with new customers.
Strengthen our scrap metal business. We intend to strengthen our market share in the scrap metal
segment by expanding our scrap metal collection network through the establishment of two new scrap yards per
year until we have the geographic reach to cover all potential primary scrap suppliers in Poland and expanding
our facilities to include more specialized vehicles, containers and machinery to more quickly process scrap. This
scrap metal collection network will continue to ensure a full supply of scrap metal for the production of our semi-
finished and finished steel products, as well as sales of scrap metal to external customers. We believe that by
strengthening our already market leading position in our scrap metal business, we will also be able to improve
our access to scrap metal supplies, widen our customer base and increase synergies with our other businesses. We
intend to install two scrap shredding facilities which we will use to increase the quality of our scrap metal and
which will in turn materially improve our scrap margins.
Expand Capabilities of Existing Assets. We intend to expand the current capabilities of our existing
assets to grow our business, in particular at Ferrostal Łabe˛dy and HSW-HSJ. At Ferrostal Łabe˛dy, we are
increasing our market share in higher margin specialized products such as mining by investing in additional
oxygen burners for our electric arc furnaces. At HSW-HSJ, we have added a fourth work shift and made some
complementary investments to increase production capacity.
Grow Through Selective Acquisitions. We intend to further expand our business through selective
acquisitions. As we have in the past, we will continue to review opportunities to acquire steel scrap producing and
retail distribution companies which will enhance and complement our business. For example, we are currently
bidding for the steel trading operations of a publicly listed Polish steel company and are exploring possibly
purchasing an interest in a Polish shipyard. We are also currently exploring a number of financing options for
potential selective acquisitions, including a potential initial public offering of ordinary shares of the Company.
5
Recent Developments
voestalpine Stahlhandel GmbH
On December 20, 2006, we agreed to acquire a 74.9% interest in voestalpine Stahlhandel GmbH from
Donauländische Baugesellschaft, a wholly-owned subsidiary of voestalpine AG, and voestalpine Stahl GmbH
with the remaining 25.1% subject to a put/call option to be exercised not earlier than January 1, 2009 and not
later than December 31, 2010 (the “Austrian Acquisition”). The purchase price for the Austrian Acquisition will
be based on an enterprise value of €99 million, plus the consolidated normalized operational net income for
voestalpine Stahlhandel GmbH for a period from April 1, 2006 until December 31, 2006 which we estimate to be
€8 million, for 100% of the shares of voestalpine Stahlhandel GmbH, 74.9% of which will be purchased at
closing and the remaining 25.1% of which will be purchased at the time of the exercise of the put/call option, if
the option is exercised. We have agreed to the assumption of certain indebtedness of voestalpine Stahlhandel
GmbH and to make an equity contribution to voestalpine Stahlhandel GmbH in the overall amount of
€23.2 million. This equity contribution will not impact the amount of our ownership interest. In addition, the
entire profit of voestalpine Stahlhandel GmbH (excluding non-recurring and non-operating items) for the period
from April 1, 2006 until December 31, 2006, plus certain dividends in the aggregate of approximately
€23.3 million relating to a reorganization and the realization of reserves and the release of retained profits
relating to two companies in voestalpine Stahlhandel GmbH, will be paid to voestalpine Stahl GmbH in the form
of a dividend (or advance thereof). This dividend will be netted from the enterprise value. In connection with the
Austrian Acquisition, we will repay all treasury obligations of voestalpine Stahlhandel GmbH through the
Acquisition On-Loan. These treasury obligation repayments will be netted from the enterprise value.
voestalpine Stahlhandel GmbH is the leading warehousing and steel distribution company in Austria with
significant operations in Central and Eastern Europe. It has retail distribution facilities in Austria, the Czech
Republic, Croatia, Poland and Romania and trade offices in Hungary, Slovakia, Slovenia and Bosnia-
Herzegovina. voestalpine Stahlhandel GmbH serves mainly civil and mechanical engineering and building and
automotive sectors and offers a full range of steel products including heavy plates, sections and thin sheets.
voestalpine Stahlhandel GmbH had consolidated revenues of €303.8 million in the fiscal year ended March 31,
2006 (compared to €332.6 million in the fiscal year ended March 31, 2005) and EBITDA of €10.2 million (as
calculated by voestalpine Stahlhandel GmbH) in the fiscal year ended March 31, 2006 (compared to
€26.5 million in the fiscal year ended March 31, 2005). The consolidated financial results of voestalpine
Stahlhandel GmbH for the periods presented do not reflect the results of certain non-consolidated subsidiaries,
including voestalpine Stahlhandel Polska Sp. z o.o. (Poland), voestalpine Stahlhandel Slowakei s.r.o. (Slovakia),
voestalpine Stahlhandel Budapest Kft. (Hungary), voestalpine Stahlhandel d.o.o. (Slovenia) and voestalpine
ambient Stahlhandel s.r.l. (Romania). These subsidiaries were not historically consolidated in voestalpine AG’s
financial statements because they were not considered material to voestalpine AG. The combined EBITDA of
these subsidiaries is approximately €2 million. See “Summary Financial Information — Summary Unaudited Pro
Forma Information”. voestalpine Stahlhandel GmbH’s largest market is in Austria, which voestalpine
Stahlhandel GmbH estimates accounted for approximately 79.8% of its consolidated revenues in the fiscal year
ended March 31, 2006 (compared to 78.9% in the fiscal year ended March 31, 2005). voestalpine Stahlhandel
GmbH had on average 451 employees and an overall trade volume of approximately 455,000 tonnes in 2005. See
“Business — Finished Products — Distribution — voestalpine Stahlhandel GmbH” for a more detailed
discussion of voestalpine Stahlhandel GmbH’s business.
We strongly believe that the Austrian Acquisition will provide us with a number of strategic areas in
which to significantly grow our business. These include:
Š our warehousing capacity will increase from 110,000 square meters to 232,725 square meters;
Š our market and customer base will increase significantly, thus enabling us to procure additional
demand and reduce margin volatility;
Š our purchasing power in the market and our negotiation position with regard to suppliers will increase
and yield significant cost savings;
Š our modern storage capacity outside of Poland will increase;
Š our ability to increase sourcing from low cost countries such as China, India and countries of the
former Soviet Union will be enhanced because our increased economies of scale will enable us to
turnover larger volumes of steel more quickly;
Š our platform for further expansion in Central and Eastern Europe will be established;
Š our cross selling efforts will be enhanced by selling complementary products of voestalpine
Stahlhandel GmbH to our customers and vice versa; and
6
Š our overall exchange rate exposure will be reduced because we will purchase and sell more products
in Euro.
The Austrian Acquisition, which is expected to close in the first half of 2007, remains subject to merger
control approval in Austria and Bosnia-Herzegovina.
The Austrian Acquisition will be funded using a portion of the proceeds from this Offering as described
herein.
In the event that the Issuer consummates this Offering prior to the closing date of the Austrian
Acquisition, a portion of the gross proceeds of this Offering sufficient to redeem €60 million principal amount of
the Notes in the event of a special mandatory redemption will be placed in escrow pending consummation of the
Austrian Acquisition. Upon consummation of the Austrian Acquisition, a portion of the funds held in escrow will
be released to the Company and approximately €45 million will be on-lent by the Issuer to voestalpine
Stahlhandel GmbH in the form of a senior loan (the “Acquisition On-Loan”) for the purposes of repaying certain
existing indebtedness of voestalpine Stahlhandel GmbH and its subsidiaries.
For a more detailed description, see “The Transactions” and “Description of Other Indebtedness” in this
Offering Memorandum.
Planned Consolidation of Centrostal Operations

The Company plans to sell its interests in Centrostal Górnośla̧ski and Centrostal Opole to Centrostal (our
50.57%-owned steel distribution subsidiary) during the first quarter of 2007. Centrostal is currently conducting a
public equity offering in Poland, the proceeds of which (estimated at approximately PLN 100 million
(€25.1 million)) will be used to pay for the purchase of these two companies. The Company will use the proceeds
from the sale of these two companies to increase its ownership in Centrostal. Following consummation of the
public equity offering, the Company expects to hold approximately 65% of the equity interest in Centrostal.
On December 29, 2006, the prospectus for Centrostal’s public equity offering was filed for approval with
the Komisja Nadzoru Finansowego (the “Polish Financial Supervisory Commission”). Once approved by the
Polish Financial Supervisory Commission, Centrostal can commence its public equity offering.
CKM “Włókniarz”
On October 23, 2006, the Company co-founded Cze˛stochowski Klub Motocyklowy “Włokniarz” S.A.
(“CKM Włókniarz”), a joint stock company with a share capital of PLN 500,000 (€125,628). The Company
holds 76% of the share capital of CKM Włókniarz with individual investors holding the remaining 24%. The
purpose of the company is to invest in, develop and promote speedway racing.
Other
We are currently bidding for the steel trading operations of a publicly listed Polish steel company, and we
are currently exploring the possibility of purchasing an interest in a Polish shipyard.
7
OUR CORPORATE AND FINANCING STRUCTURE
The diagram below describes, in simplified form, our corporate and financing structure following (a) the
consummation of this Offering and the application of the proceeds as described under “Use of Proceeds”, (b) the
establishment of the new Revolving Credit Facilities, and (c) the consummation of the Austrian Acquisition. Our
semi-finished products segment is conducted through our production division set out in the diagram below and
our finished product segment is divided between our production division and our retail and distribution division
set out in the diagram below.
€35 million (equivalent)

€40 million (equivalent) Revolving
Surviving
Credit Facilities(1)
Indebtedness(2)
Scrap Division(3) Other Division(4)
Złomrex S.A.
Production Retail
Division Distribution
(Semi-finished and
Finished products) Division
Intercompany 100%(6)
Proceeds Note (5)
50.57%
Zlomrex International (12)
Centrostal
Finance S.A. (5)(7)
100%
Centrostal
(12)
Górno l ski
100.0% €170 million 8½%

Odlewnia Metali Senior Secured Notes 99.6%
Szopienice Sp. z o.o. due 2014 offered Centrostal
(12)
hereby(7) Opole
100.0%
Zakład Walcowniczy- Acquisition voestalpine 74.9%
Walcownia Bruzdowa On-Loan(7) Stahlhandel
Sp. z o.o.
GmbH(7)
(Austria)
HSW-Huta Stali 100.0%

Jako ciowych
Neptun 100.0% 60.0% Köllensperger
S.A.(11)
Stahlhandel Stahlhandel GmbH
GmbH(9) & Co. KG
(Austria) (Austria)
91.2%
Ferrostal Łab dy
Sp. z o.o. VAS-TAD 50.0% 100.0% voestalpine
Edelstahl Handels Stahlhandel
GmbH spol.s.r.o
(Austria) (Czech Republic)
Złomrex 100.0%
Zbrojarnia Sp.
z o.o. 100.0% 100.0% voestalpine
voestalpine
Stahlhandel trgovina
Stahlhandel z jeklom d.o.o.
Polska Sp.z.o.o. (Slovenia)
voestalpine 100.0% 100.0%

VETING
Stahlhandel
Budapest Kft.
voestalpine d.o.o.
(Hungary) (Croatia)
voestalpine 100.0% 51.0% voestalpine

Stahlhandel ambient
Slowakei s.r.o Stahlhandel SRL
(Slovakia) (Romania)
KEY
Guarantor of the Notes (8)(10) Austrian Acquisition
(1) The Company will enter into one or more Revolving Credit Facilities which will provide for borrowings
of up to €40 million (equivalent), none of which is expected to be drawn down upon consummation of the
Austrian Acquisition. The Company has already entered into the Fortis Agreement, one of these
Revolving Credit Facilities, as described in Description of Other Indebtedness. The Revolving Credit
Facilities will be secured on a first-priority basis by certain inventories, trade and other receivables and
certain other current assets of the Company. The Revolving Credit Facilities will not be guaranteed on the
issue date of the Notes by any of the Company’s subsidiaries other than a possible pledge on their
inventories. See “The Transactions — Revolving Credit Facilities”.
8
(2) Upon consummation of this Offering and the application of the proceeds as described under “Use of
Proceeds”, the Company and its subsidiaries (not including voestalpine Stahlhandel GmbH and its
subsidiaries) will have no external indebtedness for borrowed money outstanding other than
Š the Notes;
Š receivables facilities providing for the factoring/securitization of the Company’s and its subsidiaries’
accounts receivable in amounts not to exceed PLN 55.5 million (€13.9 million) at any one time
outstanding, of which approximately PLN 40.1 million (€10.1 million) was outstanding as of
September 30, 2006;
Š under loan agreements with the National Fund in an amount not to exceed PLN 27.7 million
(€7.0 million) at any one time outstanding (the amount outstanding as of September 30, 2006);
Š under various leasing agreements in amounts not to exceed PLN 37.6 million (€9.5 million) (the
amount outstanding as of September 30, 2006);
Š indebtedness of the Centrolstal Group of PLN 26.4 million (€6.6 million) of which PLN 21.2 million
(€5.3 million) was outstanding as of September 30, 2006; and
Š indebtedness of Kapitał and the Company under discount promissory note agreements of
PLN 17 million (€4.3 million) and PLN 10 million (€2.5 million), respectively, of which a total of
PLN 8.9 million (€2.2 million) was outstanding as of September 30, 2006.
(the indebtedness other than the Notes in this note (2) being collectively referred to as the “Surviving
Indebtedness”). See “Description of Other Indebtedness” in this Offering Memorandum.
(3) The Scrap Division includes 14 regional divisions within Złomrex S.A. and two non-material
subsidiaries, Złomrex Pruszków (100% owned) and AB Stahl (Germany – 100% owned).
(4) Our Other Division is comprised of Złomrex China (China — 100% owned), Kapitał (51.0% owned),
Złomrex-Finans (100% owned), Nowa Jakość (100% owned) and CKM “Włókniarz” (collectively, the
“Other Division Companies”).
(5) On the issue date, Zlomrex International Finance S.A., a société anonyme organized under the laws of
France, (the “Issuer”) will on-lend an amount representing up to €82.0 million of the gross proceeds from
issuance of the Notes to Złomrex S.A. (the “Company”) under intercompany proceeds notes (the
“Intercompany Proceeds Note(s)”), the amount necessary to redeem €60 million of the Notes in the event
of a special mandatory redemption will be placed in an escrow account by the Issuer pending the
consummation of the Austrian Acquisition and the remaining amount will be deposited in a secured bank
account. Upon consummation of the Austrian Acquisition, the funds will be released from the escrow
account and a portion of which, together with cash released from the secured bank account, will be on-
lent to the Company as further Intercompany Proceeds Notes and a portion of which will be on-lent to
voestalpine Stahlhandel GmbH or its subsidiaries under the Acquisition On-Loan as described in note (7)
below. In the event the Austrian Acquisition is not consummated, any amounts held in the escrow account
in excess of the amount necessary to effect the special mandatory redemption will be on-lent to the
Company, together with cash released from the secured bank account, as further Intercompany Proceeds
Notes. After the special mandatory redemption (if it were to occur), €110.0 million aggregate principal
amount of the Notes will remain outstanding.
(6) The percentage ownership includes a de minimis number of directors’ qualifying shares.
(7) The diagram only shows selected subsidiaries of voestalpine Stahlhandel GmbH. Upon consummation of
the Austrian Acquisition, the Company will acquire a 74.9% interest in voestalpine Stahlhandel GmbH
with an option to acquire a further 25.1% interest at a later date. In connection therewith, the Issuer
expects to on-lend approximately €45 million to voestalpine Stahlhandel GmbH or its subsidiaries in the
form of one or more senior intercompany loans (the “Acquisition On-Loan”) to repay certain existing
indebtedness of voestalpine Stahlhandel GmbH and its subsidiaries. While the Issuer will be the direct
beneficiary under the Acquisition On-Loan, the holders of the Notes will benefit from a first-priority
assignment over the Acquisition On-Loan, as described under note (8) below. Following the
consummation of the Austrian Acquisition and the Acquisition On-Loan, voestalpine Stahlhandel GmbH
will also have additional working capital and other facilities providing for borrowings of up to €19
million (equivalent), of which approximately €10 million (equivalent) is expected to be outstanding as of
the date of the consummation of the Austrian Acquisition. The Acquisition On-Loan will provide that, in
certain circumstances, voestalpine Stahlhandel GmbH may request that the Company pay the periodic
interest due under the Acquisition On-Loan to the Issuer in lieu of a payment by voestalpine Stahlhandel
GmbH.
9
(8) The Notes will be jointly and severally guaranteed by each of the guarantors specified in the diagram
above on a senior basis. The Notes and the Guarantees will be secured by (a) first-priority pledges of (i)
the capital shares of the Issuer and the Subsidiary Guarantors held by the Company, (ii) after
consummation of the Austrian Acquisition, the capital shares of voestalpine Stahlhandel GmbH held by
the Company; (iii) the balance of the bank account into which the Asset Sale Cash Collateral is deposited
prior to application; and (iv) prior to being on-lent to the Company as further Intercompany Proceeds
Notes, the balance of the bank account into which the unallocated offering proceeds are deposited by the
Issuer; (b) a first-priority assignment of the Intercompany Proceeds Note; (c) after consummation of the
Austrian Acquisition, a first-priority security interest over the Acquisition On-Loan; and (d) prior to
release therefrom, a first-priority security interest in the funds held in the escrow account pursuant to the
Escrow Agreement. See “Description of the Notes — Security”;
(9) The subsidiaries of Neptun Stahlhandel GmbH are comprised of Zimmermann Stahlhandel GmbH (99.8%
owned), Vereinigte Biege-Gesellschaft mbH (67% owned) and ARGE Baustahl Eisen Blasy-Neptun
GmbH (50% owned), which are all Austrian companies. In addition, Neptun Stahlhandel GmbH holds a
36% equity interest in BWS Bewehrungsstahl GmbH, an Austrian company.
(10) The Company’s subsidiaries are Polish companies unless otherwise specified.
(11) On November 2, 2006, HSW-WB and HSW-HSJ merged.
(12) The Company plans to sell its interests in Centrostal Górnośla˛ski and Centrostal Opole to Centrostal (our
50.57%–owned steel distribution subsidiary) during the first quarter of 2007. Centrostal is currently
conducting a public equity offering in Poland, the proceeds of which (estimated at PLN 100 million
(€25.1 million)) will be used to pay for the purchase of these two companies. The Company will use the
proceeds from the sale of these two companies to increase its ownership in Centrostal. Following
consummation of the public equity offering, the Company expects to hold approximately 65% of the
equity interests in Centrostal. On December 29, 2006, the prospectus for Centrostal’s public equity
offering was filed for approval with the Polish Financial Supervisory Commission. Once approved by the
Polish Financial Supervisory Commission, Centrostal can commence its public equity offering.
10
THE OFFERING
The summary below describes the principal terms of the Notes. Certain of the terms and conditions
described below are subject to important limitations and exceptions. The “Description of the Notes” section of
this Offering Memorandum contains a more detailed description of the terms and conditions of the Notes.
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . Zlomrex International Finance S.A., a société anonyme organized under
the laws of the Republic of France (the “Issuer”) and a wholly-owned
finance subsidiary (other than directors’ qualifying shares) of Złomrex
S.A., a spólka akcyjna organized under the laws of Poland (the
“Company”).
Notes Offered . . . . . . . . . . . . . . . . . . €170,000,000 aggregate principal amount of 8 1⁄ 2% Senior Secured Notes
due 2014 (the “Notes”).
Maturity Date . . . . . . . . . . . . . . . . . . February 1, 2014.
Interest . . . . . . . . . . . . . . . . . . . . . . . The Notes will bear interest at a rate of 8.50% per annum.
Issue Price . . . . . . . . . . . . . . . . . . . . . 100%.
Interest Payment Date . . . . . . . . . . . Interest on the Notes will be payable on February 1 and August 1 of each
year, beginning on August 1, 2007.
Ranking . . . . . . . . . . . . . . . . . . . . . . . The Notes will be senior secured obligations of the Issuer and will rank
equally in right of payment to all existing and future senior indebtedness
of the Issuer.
The Issuer is a special purpose vehicle that will not pursue any revenue-
generating operations of its own as long as Notes remain outstanding. On
the Issue Date, the Issuer will: (1) on-lend an amount representing
approximately €82 million of the gross proceeds of the issuance of the
Notes to the Company under the Intercompany Proceeds Notes; (2) deposit
an amount into an Escrow Account sufficient to redeem €60 million of the
Notes; and (3) deposit the remaining cash amount in a designated bank
account. On the Acquisition Closing Date, the Issuer will on-lend an
additional amount (comprised of funds released from the Escrow Account
and funds available from the designated bank account) to the Company
under one or more additional Intercompany Proceeds Notes such that the
aggregate principal amount of Indebtedness subject to the Intercompany
Proceeds Notes and the Acquisition On-Loan will equal €170 million. In
the event the Austrian Acquisition is not consummated, the amount of the
Intercompany Proceeds Note will be increased to €110 million. The Issuer
will depend on payments under the Intercompany Proceeds Note and the
Acquisition On-Loan to make payments on the Notes, and will have no
other significant assets. See “Special Mandatory Redemption” below.
Guarantees . . . . . . . . . . . . . . . . . . . . The Notes will be guaranteed (each, a “Guarantee”) on a senior basis by
the Company and certain of its subsidiaries (each, a “Guarantor” and
collectively, the “Guarantors”). Each Guarantee will rank equally in
right of payment to all existing and future senior indebtedness of the
Guarantors and will rank senior to all of the Guarantors’ existing and
future indebtedness that is subordinated in right of payment to the Notes.
The Revolving Credit Facilities initially will not be guaranteed by any of
the Company’s subsidiaries.
For the nine months ended September 30, 2006, the Guarantors
accounted for 89.1% of total revenues, all of the profit for the period,
and 90.9% of the gross profit of the Group.
Security . . . . . . . . . . . . . . . . . . . . . . . The obligations of the Issuer under the Notes and the Indenture and the
Guarantors under the Notes Guarantees will be secured by:
11
Š first-priority share pledges over (a) on the Issue Date, the
Capital Shares of the Subsidiary Guarantors (the “Złomrex
Share Pledges”) and the Issuer and (b), upon consummation
of the Austrian Acquisition, the Capital Shares of voestalpine
Stahlhandel GmbH held by the Company;
Š a first-priority assignment over the Intercompany Proceeds
Note (all amounts payable under the Intercompany Proceeds
Note);
Š a first-priority security interest over the Acquisition On-Loan
(all amounts payable under the Acquisition On-Loan);
Š prior to the release therefrom, a first-priority security interest
in the funds held in the Escrow Account and, prior to being
on-lent to the Company under the Intercompany Proceeds
Notes, a first-priority pledge over the bank account into
which the unallocated offering proceeds are deposited by the
Issuer; and
Š a first-priority pledge over the balance of the bank account
into which the cash proceeds from assets sales is paid prior to
application thereof in accordance with the covenant described
under “Description of the Notes — Certain Covenants —
Limitation on Sales of Assets and Subsidiary Shares”.
The Collateral will be pledged to The Bank of New York as security
agent for the exclusive benefit of the Trustee on a senior basis. Under the
Indenture, only the Notes and the Guarantees, additional Notes (and the
related Guarantees) and certain other indebtedness of the Group will be
allowed to benefit from security over the Collateral, including the shares
subject to the Share Pledges. The Guarantees will be effectively
subordinated to any other existing and future secured indebtedness of the
Guarantors permitted to be incurred under the Indenture to the extent of
the value of the assets securing such Indebtedness unless such assets also
secure the Guarantees on an equal and ratable or senior basis. In the
event of a bankruptcy or insolvency, each Guarantor’s secured lenders
will have a prior secured claim to any collateral of such Guarantor
securing the debt owed to them.
Optional Redemption . . . . . . . . . . . The Issuer may redeem all or part of the Notes on or after February 1,
2011 at the redemption prices listed in the section entitled “Description
of the Notes — Optional Redemption”.
The Issuer may redeem all or part of the Notes at any time prior to
February 1, 2011, by paying a “make-whole” premium as described in
the section entitled “Description of the Notes — Optional Redemption”.
At any time prior to February 1, 2010, the Issuer may use the proceeds of
specified equity offerings to redeem up to 35% of the original principal
amount of the Notes at a redemption price equal to 108.5% of the
principal amount thereof, plus accrued and unpaid interest and additional
amounts, if any, up to the redemption date, provided that at least 65% of
the aggregate principal amount of the Notes remains outstanding after
the redemption. See “Description of the Notes — Optional Redemption”.
Tax Redemption. The Issuer may redeem all, but not less than all, of the
Notes at a redemption price of 100% of the principal amount, plus accrued
and unpaid interest, if any, to the redemption date, if the Issuer or any
surviving entity would become obligated to pay certain additional amounts
as a result of certain changes in specified tax laws or certain other
circumstances. See “Description of the Notes — Optional Tax Redemption”.
12
Additional Amounts . . . . . . . . . . . . All payments in respect of the Notes will be made without withholding
or deduction for any taxes or other governmental changes, except to the
extent required by law. If withholding or deduction is required by law,
subject to certain exceptions, the Issuer will pay additional amounts so
that the net amount you receive is no less than you would have received
in the absence of such withholding or deduction. See “Description of the
Notes — Payment of Additional Amounts”.
Change of Control . . . . . . . . . . . . . . Upon the occurrence of a change of control at any time, you will have
the right to require the Issuer to repurchase the Notes at a price equal to
101% of the principal amount thereof together with accrued and unpaid
interest and certain other amounts, if any, to the date of repurchase. See
“Description of the Notes — Repurchase at the Option of Holders upon a
Change of Control”.
Special Mandatory Redemption . . . If, as anticipated, the Issuer consummates this Offering prior to the
Acquisition Closing Date, an amount of the gross proceeds of this
Offering sufficient to redeem €60 million in aggregate principal amount
of the Notes (the “Mandatorily Redeemable Notes”) at a special
mandatory redemption price will be placed in escrow pending
consummation of the Austrian Acquisition. In the event that the Austrian
Acquisition is not completed on or before June 30, 2007 or the Share
Purchase Agreement is terminated at any time prior thereto, the Notes
will be subject to the special mandatory redemption. The special
mandatory redemption price is equal to 101% of the aggregate principal
amount of the Mandatorily Redeemable Notes, plus accrued and unpaid
interest to the redemption date. If the Austrian Acquisition is completed
on or before June 30, 2007, the escrowed funds will be released to the
Issuer. After the special mandatory redemption (if it were to occur),
€110.0 million aggregate principal amount of the Notes will remain
outstanding (unless otherwise redeemed or repurchased).
Covenants . . . . . . . . . . . . . . . . . . . . . The Indenture will, among other things, restrict the Group’s ability to:
Š incur additional indebtedness;
Š pay dividends on, redeem or repurchase our capital stock or make

investments;
Š sell assets;
Š create certain liens;
Š enter into agreements that restrict the subsidiaries’ ability to pay

dividends or make other distributions to the Company or the Issuer;
Š engage in transactions with affiliates;
Š issue or sell capital stock of restricted subsidiaries;
Š enter into sale and leaseback transactions;
Š consolidate, merge or transfer all or substantially all of the

Company’s or a Guarantor’s assets; and
Š engage in certain business.
In addition, the Group will provide to the Trustee and to holders and make
available to investors annual and quarterly reports of the Company.
These covenants are subject to important exceptions and qualifications.
See “Description of the Notes — Certain Covenants”.
Use of Proceeds . . . . . . . . . . . . . . . . We will use the net proceeds from this Offering to refinance certain of
our outstanding indebtedness, to finance the Austrian Acquisition and
pay related fees and expenses and for general corporate purposes.
13
Transfer Restrictions; Absence of a
Public Market for the Notes . . . . . . The Notes have not been registered under the US Securities Act and thus are
subject to restrictions on transferability and resale. The Issuer cannot assure
you that a market for the Notes will develop or that, if a market develops, the
market will be a liquid market. The Initial Purchaser has advised the Issuer
that it currently intends to make a market in the Notes. However, the Initial
Purchaser is not obligated to do so and any market making with respect to
the Notes may be discontinued without notice. See “Plan of Distribution”.
Listing . . . . . . . . . . . . . . . . . . . . . . . . Application has been made to admit the Notes to listing on the Official
List of the Luxembourg Stock Exchange and trading on the Euro MTF
Market.
Trustee, Registrar, Transfer and
Paying Agent . . . . . . . . . . . . . . . . . . The Bank of New York.
Luxembourg Listing, Paying and
Transfer Agent . . . . . . . . . . . . . . . The Bank of New York (Luxembourg) S.A.
Security Agent and Collateral
Agent . . . . . . . . . . . . . . . . . . . . . . . The Bank of New York.
Governing Law of the Notes, the
Indenture and the Guarantees . . . . New York.
Governing Law of the Security
Documents . . . . . . . . . . . . . . . . . . . . Poland, France, Austria and New York.
14
SUMMARY FINANCIAL INFORMATION
Summary Consolidated Historical Financial Information
The following summary financial data presents the audited financial statements of the Group as of and for
the years ended December 31, 2005 and 2004 and the unaudited financial statements of the Group as of and for
the nine months ended September 30, 2006 and 2005 (the “Consolidated Financial Statements”).
The summary financial data should be read in conjunction with the “Consolidated Financial Statements”
and accompanying notes included elsewhere in this Offering Memorandum and the information set forth in “The
Transactions — The Austrian Acquisition”, “Use of Proceeds”, “Selected Consolidated Financial Data and Other
Information”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”,
“Description of Other Indebtedness” and “Description of the Notes”.
Year ended Nine months ended
December 31, September 30,
2004 2005 2005 2005 2006 2006
(PLN millions) (€ millions) (PLN millions) (€ millions)
Income statement data
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,194.9 976.2 245.3 737.7 1,417.0 356.0
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . 353.4 188.0 47.3 136.9 168.5 42.3
Semi-finished products . . . . . . . . . . . . . . . . . 225.7 237.2 59.6 180.2 220.7 55.5
Finished products . . . . . . . . . . . . . . . . . . . . . 471.2 368.6 92.6 292.4 765.2 192.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144.6 182.4 45.8 128.2 262.7 66.0
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,019.5) (880.7) (221.3) (671.5) (1,228.6) (308.7)
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . (325.0) (177.2) (44.5)
Semi-finished products . . . . . . . . . . . . . . . . . (209.6) (214.1) (53.8)
Finished products . . . . . . . . . . . . . . . . . . . . . (436.7) (358.5) (90.1)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (129.7) (160.1) (40.2)
Intersegment(1) . . . . . . . . . . . . . . . . . . . . . . . . 81.5 29.2 7.3
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.4 95.5 24.0 66.2 188.4 47.3
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . 28.4 10.7 2.7
Semi-finished products . . . . . . . . . . . . . . . . . 16.1 23.2 5.8
Finished products . . . . . . . . . . . . . . . . . . . . . 34.5 10.1 2.5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 22.3 5.6
Intersegment(1) . . . . . . . . . . . . . . . . . . . . . . . . 81.5 29.2 7.3
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 3.5 0.9 1.6 2.7 0.7
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . (22.1) (15.7) (3.9) (10.7) (21.5) (5.4)
Administrative expenses . . . . . . . . . . . . . . . . . . . . (36.9) (40.6) (10.2) (29.7) (52.8) (13.3)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.9) (4.7) (1.2) (2.7) (7.0) (1.8)
Operating profit before financing costs . . . . . . 116.4 38.0 9.5 24.7 109.7 27.6
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . (8.9) (17.0) (4.3) (13.8) (19.9) (5.0)

Excess of the interest in the net fair value of
identifiable assets, liabilities and contingent
liabilities acquired over cost . . . . . . . . . . . . . . . 101.0 — — 5.9 1.5
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . 208.5 21.0 5.3 10.9 95.8 24.1
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . (3.7) (4.1) (1.0) (2.1) (18.9) (4.7)
Profit for the period . . . . . . . . . . . . . . . . . . . . . . 204.9 16.9 4.2 8.8 76.9 19.3
(1) Represents margin on intersegment sales.
15
2004 2005 2005 2005 2006 2006
Selected cash flow data

Net cash from operating activities . . . . . . . . . . . . . . . . . (12.4) 54.6 13.7 30.7 75.9 19.1
Net cash from investing activities . . . . . . . . . . . . . . . . . 6.0 (36.7) (9.2) (28.1) (216.4) (54.4)
Net cash from financing activities . . . . . . . . . . . . . . . . . (15.7) (1.3) (0.3) 30.7 141.6 35.6
Balance sheet data (at period end)
Total interest-bearing debt . . . . . . . . . . . . . . . . . . . . . . . 189.3 211.0 53.3 420.9 105.8
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571.0 592.4 148.8 1,138.2 286.0
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293.2 297.4 74.8 748.9 188.2
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . 571.0 592.4 148.8 1,138.2 286.0
Other financial data
EBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.7 60.1 15.1 41.3 135.3 34.0
(1) EBITDA is defined as operating profit before financing costs and before depreciation and amortization.
We have included information concerning EBITDA because certain investors use it as a measure of our
ability to service our debt. EBITDA should not be considered by investors as an alternative to operating
profit or profit for the period as an indicator of our performance, nor as an alternative to cash flows from
operating activities, investing activities or financing activities as a measure of liquidity. EBITDA
disclosed here is not comparable to EBITDA disclosed by other companies because EBITDA is not
uniformly defined. The definition of EBITDA used here differs from the definition of Consolidated
EBITDA used in the Indenture related to the Notes. See “Description of the Notes — Certain
Definitions”. Set forth below is a reconciliation of EBITDA to operating profit before financing costs:

2004 2005 2005 2005 2006 2006
Operating profit before financing costs . . . . . . . . . . . . . . . . 116.4 38.0 9.6 24.7 109.7 27.6
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 19.3 22.1 5.6 16.6 25.6 6.4
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.7 60.1 15.1 41.3 135.3 34.0
16
Summary Unaudited Pro Forma Financial Information
The following table is derived from the Unaudited Pro Forma Consolidated Financial Data and the Pro
Forma Financial Information included elsewhere in this Offering Memorandum and reflects the estimated pro forma
impact on our Consolidated Financial Statements for the year ended December 31, 2005 and the twelve months
ended September 30, 2006 of the Polish Acquisitions and the Austrian Acquisition and the estimated adjusted pro
forma impact of this Offering (to the extent not reflected in the Unaudited Pro Forma Consolidated Financial Data
or the Pro Forma Financial Information) and the Refinancing.
The unaudited pro forma income statement for the year ended December 31, 2005 and the pro forma
income statement for the twelve months ended September 30, 2006 assume the Polish Acquisitions and the
Austrian Acquisition occurred on the first date of the periods presented, respectively. Pro forma balance sheet
data as of December 31, 2005 and September 30, 2006 were prepared based on the assumption that the
acquisition occurred on January 1, 2005. The unaudited adjusted pro forma information for those periods further
assumes that this Offering (to the extent not reflected in the Unaudited Pro Forma Consolidated Financial Data
and the Pro Forma Financial Information) and the Refinancing occurred at the beginning of the period presented
for adjusted pro forma income statement items and as of its date for adjusted pro forma balance sheet items. The
adjustments made in order to present the unaudited pro forma and unaudited adjusted pro forma consolidated
financial data have been made based on available information and assumptions that our management believes are
reasonable. See “Risk Factors — Our pro forma financial information and our adjusted pro forma financial
information presented herein may not be representative of our actual results, and our future financial condition,
results of operations and cash flows may differ materially from such information”. The unaudited pro forma and
unaudited adjusted pro forma consolidated financial data are for informational purposes only and do not purport
to present what our results would actually have been had the Polish Acquisitions and the Transactions occurred
on the dates presented, nor should they be used as the basis of projections of our results of operations or financial
position for any future period.
As of and for the Twelve month
year ended period ended
December 31, September 30,(9)
2005 2005 2006 2006
Pro Forma Financial Data(1)
Revenue (last twelve months) . . . . . . . . . . . . . . . . . . . . . . . 2,599.8 653.2 3,001.9 754.2
Profit for the period (last twelve months) . . . . . . . . . . . . . . 44.9 11.3 93.3 23.4
Cash and cash equivalents (at period end) . . . . . . . . . . . . . . 35.1 8.8 38.6 9.7
Total debt (at period end)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 785.3 197.3 974.5 244.8
Total net debt (at period end)(3) . . . . . . . . . . . . . . . . . . . . . . 750.2 188.5 935.9 235.2
Interest expense, net(4) (last twelve months) . . . . . . . . . . . . 54.5 13.7 55.2 13.9
EBITDA(1)(5) (last twelve months) . . . . . . . . . . . . . . . . . . . . 147.3 37.0 220.7 55.5
Adjusted Pro Forma Financial Data
Adjusted cash and cash equivalents (at period end)(6) . . . . . 53.3 13.4
Adjusted total debt (at period end)(2)(7) . . . . . . . . . . . . . . . . . 855.0 214.8
Adjusted total net debt (at period end)(2) . . . . . . . . . . . . . . . 801.7 201.4
Adjusted interest expense, net(3)(8) (last twelve months) . . . 69.2 17.4
Ratio of adjusted total debt to EBITDA . . . . . . . . . . . . . . . . 3.87x 3.87x
Ratio of adjusted total net debt to EBITDA . . . . . . . . . . . . . 3.63x 3.63x
Ratio of EBITDA to adjusted interest expense, net . . . . . . . 3.19x 3.19x
(1) The consolidated financial results of voestalpine Stahlhandel GmbH and its subsidiaries for the periods presented do not the reflect
results of certain non-consolidated subsidiaries, including voestalpine Stahlhandel Polska Sp.z.o.o. (Poland), voestalpine Stahlhandel
Slowakei s.r.o. (Slovakia), voestalpine Stahlhandel Budapest Kft. (Hungary), voestalpine Stahlhandel d.o.o. (Slovenia) and voestalpine
ambient Stahlhandel s.r.l. (Romania). EBITDA for non-consolidated subsidiaries of voestalpine Stahlhandel GmbH were approximately
PLN 8.0 million (€2.0 million) for the year ended March 31, 2006 (which are not necessarily indicative of the results of future periods).
(2) Total debt represents interest bearing debt.
(3) Total net debt represents total debt less cash and cash equivalents.
(4) Interest expense, net is interest expense after deduction of interest income.
(5) EBITDA is defined as operating profit before financing costs before depreciation and amortization. We have included information
concerning EBITDA because certain investors use it as a measure of our ability to service our debt. EBITDA should not be considered
by investors as an alternative to operating profit or profit for the period as an indicator of our performance, nor as an alternative to cash
flows from operating activities, investing activities or financing activities as a measure of liquidity. EBITDA disclosed here is not
comparable to EBITDA disclosed by other companies because EBITDA is not uniformly defined. The definition of EBITDA used here
differs from the definition of Consolidated EBITDA used in the Indenture related to the Notes. See “Description of the Notes — Certain
Definitions”. Set forth below is a reconciliation of pro forma EBITDA to pro forma operating profit before financing costs:
Year ended Twelve month period ended
2005 2005 2006 2006
Operating profit before financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.6 26.0 175.9 44.2
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.7 11.0 44.8 11.3
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147.3 37.0 220.7 55.5
17
(6) Includes PLN 14.7 million (€3.7 million) representing the unused portion of the net cash proceeds from this Offering following the
consummation of the Transactions not otherwise reflected in the Pro Forma Financial Information. See “Use of Proceeds”.
(7) Adjusted pro forma total debt represents the total debt of the consolidated Group (including voestalpine Stahlhandel GmbH and its
subsidiaries) upon consummation of the Transactions. Based on the outstanding consolidated indebtedness of the Company voestalpine
Stahlhandel GmbH as of September 30, 2006, adjusted pro forma total debt is comprised of the following indebtedness:
Period Ended
September 30, 2006
(PLN millions) (€ millions)
Notes offered hereby . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676.6 170.0
Surviving Company indebtedness (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.3 35.0
Surviving voestalpine Stahlhandel GmbH indebtedness (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . 39.1 9.8
Adjusted pro forma total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855.0 214.8
Set forth below is a reconciliation of pro forma total debt to adjusted pro forma debt as of September 30, 2006:
September 30, 2006

Pro forma total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974.8 244.9
Adjustment of interest expense with respect to Polish Acquisitions(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.0) (1.8)
voestalpine Stahlhandel GmbH enterprise value(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (394.2) (99.0)
Adjustment of interest with respect to Austrian Acquisition(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61.7) (15.5)
Fundable Acquisition On-Loan indebtedness(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.8 34.9
Interest attributable to fundable Acquisition On-Loan indebtedness(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 17.0 4.3
Pre-merger adjusted pro forma total debt (other than the Notes offered hereby) of the
Company and voestalpine Stahlhandel GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667.7 167.8
Treasury obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (207.4) (52.1)
Notes offered hereby . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676.6 170.0
Repayment of existing Złomrex indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (281.8) (70.8)
Adjusted pro forma total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855.0 214.8
(a) Assumes consummation of the Polish Acquisitions on January 1, 2006 rather than January 1, 2005 (as assumed in the Pro Forma
Financial Information).
(b) Represents PLN 348.2 million (€87.5 million) portion of the Notes necessary to fund the Austrian Acquisition and PLN 48.0
million (€12.1 million) attributable to deferred consideration and the deferred purchase of the additional 25.1% of voestalpine
Stahlhandel GmbH.
(c) Represents assumed interest payable on indebtedness referred to in note (b) comprised of PLN 57.9 (€14.5 million) attributable to
the PLN 348.2 (€87.5 million) portion attributable to the Notes and the PLN 3.8 million (€1.0 million) portion attributable to the
deferred purchase.
(d) Represents the portion of indebtedness to be refinanced with the Acquisition On-Loan available on January 1, 2005.
(e) Represents assumed interest on indebtedness referred to in note (d) above.
(8) Represents the interest payable for the twelve month period ended September 30, 2006 assuming an implied weighted average interest
rate (which may or may not be indicative of the actual interest rate that would have been applicable during the period or representative of
future results) less interest revenue of PLN 8.3 million (€2.1 million).
(9) Income statement data presented assumes that Polish Acquisitions and Austrian Acquisition occurred on October 1, 2005 and balance
sheet data assumes the Polish Acquisitions occurred on January 1, 2005.
18
RISK FACTORS
An investment in the Notes involves a high degree of risk. Prospective investors in the Notes should
carefully consider the risks described below and the other information contained in this Offering Memorandum
before making a decision to invest in the Notes. Any of the following risks, individually or together, could
adversely affect our business, financial condition and results of operations.
Risks related to our Business

Our results of operations have been materially adversely impacted in the past by declining steel prices and
declining steel scrap prices, and any further local or global downturn in the steel industry leading to a decline
in steel prices and steel scrap prices will adversely affect our results of operations and financial condition.
Our financial success is tied directly to the price of steel and steel products, primarily in the Polish
market. The price of steel and steel products is highly correlated to steel scrap prices. During the year ended
December 31, 2005, declining steel prices and steel scrap prices in the Polish market and elsewhere materially
adversely impacted our results of operations compared to prior periods. The steel industry is cyclical because the
industries in which steel customers operate are themselves cyclical and sensitive to changes in general economic
conditions. The demand for steel products is thus generally correlated to macroeconomic conditions in which
steel consuming industries operate. The prices of steel products are influenced by many factors, including
demand, worldwide production capacity, capacity-utilization rates, raw material costs, exchange rates, trade
barriers and improvements in steel-making processes. For example, steel prices have recently been driven to a
significant extent by demand in China and India while global steel production volumes reached their highest
levels in the past fifty years. Since the start of 2005, these trends have moderated somewhat, and prices have
declined from their peak levels. A decline in Chinese or Indian demand for imported steel could have a
significant adverse effect on steel prices. Steel prices have experienced, and in the future may experience,
significant fluctuations as a result of these and other factors, many of which are beyond our control. Any future
decline in steel prices and a corresponding decline in steel scrap prices will adversely affect on our results of
operations and financial condition.
The Polish and global steel industries are highly competitive, and increasing competition could adversely
affect our results of operations and financial condition.
We face competition from Polish and emerging market foreign steel manufacturers. A number of our Polish
competitors are undertaking modernization and expansion plans, which may make them more efficient or allow
them to develop new products. We also face price-based competition from steel producers in emerging market
countries. Recent consolidation in the steel industry globally has also led to the creation of several large global steel
producers, including Arcelor Mittal, whose subsidiary Mittal Steel Poland (now Arcelor Mittal) has approximately
65% of the market share in Poland’s domestic steel market. These and many other large international steel
companies have greater financial resources and more extensive global operations than us. Moreover, the steel
industry has historically suffered from production overcapacity. Increased competition from Polish or international
steel producers could result in more competitive pricing, adversely affecting our results of operations and financial
condition.
We breached certain financial covenants under our indebtedness in the past and received waivers from
lenders for these breaches. Any additional breaches in the future under our indebtedness could materially
affect our results of operations and financial condition.
We breached certain financial covenants under certain of our indebtedness in the past, including, absent a
waiver, for the year ended December 31, 2006. We received waivers from lenders relating to that indebtedness
and these lenders, although they had the right to do so, did not accelerate the maturity of this indebtedness. Any
additional breaches of financial covenants in the future under our indebtedness could materially affect our results
of operations and financial condition.
Our business is subject to seasonality which could materially affect our results of operations.
Our revenues fluctuate significantly from one quarter to the next, depending on the number of working
days and vacation periods. For example, our business volumes are generally lower in the winter months of
January and February than in the spring and in the summer due to less vacations than in the fall. These
fluctuations have a direct impact on our working capital, which in turn affects our net financial debt and cash
flow. As a result, our results of operations may be inconsistent, varying significantly from quarter to quarter,
which makes period to period comparability difficult and could materially affect our results of operations.
19
The introduction of low cost imports into the Polish market by competitors may negatively effect our margins.
The increasing consolidation of the global steel industry is putting pressure on our operating performance
and will continue to do so. The entry of global steel producers like Arcelor Mittal into our market could force us
to lower our prices and negatively impact our margins. Increased participation in the Polish steel market by large
global steel producers could have a material adverse effect on our financial condition and results of operations.
We have received a qualified audit opinion on our audited financial statements which could cause investors to
lose confidence in the reliability of our financial statements, which in turn could result in a decrease in the
liquidity or market price of the Notes.
We engaged our independent auditors, KPMG Audyt Sp. z o.o. after the end of our last completed fiscal
year, which ended on December 31, 2005. As a result, the independent auditors were unable to observe the
counting of the physical inventories as of December 31, 2005. Furthermore, they were unable to satisfy
themselves as to inventory quantities or condition as of that date by any other audit procedure. Accordingly, our
independent auditors were not able to determine whether any adjustments might be necessary to the amounts
shown in the financial statements for inventories, cost of sales, net earnings and retained earnings as of and for
the year ended December 31, 2005, and their audit opinion in relation to the financial statements as of and for the
year ended December 31, 2005 contain a qualification to that effect. While measures have been taken to
independently verify inventory at period ends, to the extent the inventories on which our financial statements are
derived were not accurate, our actual inventories, cost of sales, net earnings and retained earnings for those
periods could differ materially from our reported results. Because our independent auditors have issued a
qualified opinion, investors may lose confidence in the reliability of our financial statements, which could have a
negative impact on the liquidity or market price of the Notes.
Our growth strategy through acquisitions exposes us to numerous risks.

Historically, we have achieved growth in part through acquisitions. Our most significant acquisitions
include our purchase in 2001 of the rolling mill assets located in Zawiercie which is currently owned by
ZW-WB, Ferrostal Łabe˛dy in 2004, Szopienice in 2004 and HSW-HSJ, HSW-WB, Centrostal Górnośla˛ski,
Centrostal and Centrostal Opole in 2006. For a detailed description of our significant recent acquisitions, please
see “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Summary of
Major Acquisitions.” We are constantly evaluating acquisition opportunities, both horizontal, by expanding our
market share, and vertical, by expanding up- and downstream activities in the value chain. Both types of
acquisitions may involve geographic expansion into regions in which we currently have a more limited presence.
In executing our strategy of profitable growth, we may consider targets that are comparable in size to the
acquisitions we have made in the past. Such projects may pose new challenges in terms of identifying and
evaluating suitable targets, financing and completing the acquisition, and integrating the acquired businesses into
the Group.
If we cannot successfully integrate these recently completed and future acquisitions on a timely and
efficient basis, we may incur higher than expected costs and not realize all the anticipated benefits of these
acquisitions. Moreover, we might fail to discover liabilities of a business, or operating or other problems, prior to
completing an acquisition and we may not be able to get full indemnification due to limitations in the purchase
agreement or due to the lack of funds or liquidation of the sellers. This could lead to adverse accounting and
financial consequences, such as the need to make large provisions against the acquired assets or to write down
acquired assets. These difficulties may adversely affect our business, financial condition and results of
operations.
We may not be able to secure sufficient financing to fund our acquisition strategy.
We anticipate that our cash flows will not be sufficient to fund our future acquisitions. As such, obtaining
sufficient outside financing is crucial to our acquisition strategy. We may not be able to secure such financing on
favorable terms or at all due to the interest rate environment and limitations on our ability to enter into financing
transactions imposed under the terms and conditions of the Notes and our credit facilities. If we do not obtain
sufficient financing for our acquisitions, we may be restricted in our ability to acquire attractive targets, which
could cause us to lose market share.
Increases in our cost base may erode our profit margins.

In addition to the possibility of increased costs in our raw materials, we also could face increases in other
costs, including labor, regulation and energy costs. We may not be able to pass these costs on to our customers in
full or on a timely basis. If we are unable to effectively pass on costs to our customers, or to implement cost
reductions, increases in our cost base may adversely affect our business and erode our profit margins.
20
Strikes or other labor-related conflicts at our production facilities, in the steel industry or in certain customer
industries could have an adverse effect on our financial condition and results of operations.
Although we have not been subject in the past to any significant operational disruptions affecting several
locations simultaneously as a result of any labor-related conflicts, we cannot ensure that such operational
disruptions will not occur in the future. Labor-related conflicts at our production facilities could lead to business
interruptions or supply difficulties. In addition, a significant disruption of operations in the steel industry at the
suppliers’ end could lead to stoppages of production and consequently to delivery cancellations. Finally, labor-
related conflicts at the customers’ end, in particular in the construction, automotive or machine industries, could
have an adverse effect on demand. Such conflicts could have an adverse effect on our financial condition and
results of operations.
Slow economic growth in Germany, the Czech Republic and other European countries to which we export a
growing percentage of our products may adversely affect our results of operations.
While we market and sell our products worldwide, some of our revenues are derived from European
markets. In 2005, we exported 9.3% and 3.7% of our products to Germany and the Czech Republic, respectively.
Consequently, the economic conditions in these countries have an increasing impact on our operating
performance. Any weak economic performance in their economics may adversely affect our result of operations.
Our business may be adversely affected by exchange rate fluctuations.

Long-term trends in exchange rates may have a material impact on our business. A strong Polish zloty
versus the Euro has an adverse impact on our competitive position in European markets because a substantial
portion of our costs are incurred in Polish zloty, in particular for energy and personnel costs, while mostly Polish
zloty sales result from product prices that are directly linked to Euro/US dollar commodity prices. A further
strengthening of the Polish zloty versus the Euro would likely exacerbate these effects and may thus have a
material adverse effect on our financial performance and result of operations.
Environmental regulations and other obligations relating to environmental matters could subject us to liability
for fines, clean-ups and other damages, require us to modify our operations increase our manufacturing and
delivery costs and adversely affect our results of operations.
We are subject to the requirements of Polish and European Union environmental and occupational safety
and health laws and regulations. These include obligations to investigate and clean up environmental
contamination in certain circumstances. Additionally, many of our sites are located on previous brownfield sites
or have had neighbors that undertook operations that could cause contamination.
Costs related to our compliance with environmental laws, and potential obligations with respect to
contaminated sites may have a significant negative impact on our operating results. These include obligations
related to sites currently or formerly owned or operated by us, or where waste from our operations was disposed.
Our provisions for environmental compliance may be insufficient if the assumption underlying those provisions
prove incorrect or if we are held responsible for contamination of which we are currently unaware. Consequently,
compliance with these laws could result in significant capital expenditures as well as other costs and liabilities
and our results of operations may be adversely affected.
We rely on certain equipment to manufacture our steel products and operate our business, which if damaged
due to events beyond our control, could have a material adverse effect on our results of operations and
financial condition.
The business of producing semi-finished and finished steel products is highly dependent on the
availability and proper functioning of steel production equipment, which may be damaged or otherwise
negatively affected by certain risks and hazards often outside the Group’s control. Industrial and mechanical
incidents, unscheduled plant shutdowns or other processing problems may be caused by events such as technical
failures, fires and other natural disasters and other unforeseen events, against which the Group does not have
business interruption insurance. Any such damage to our steel production equipment could have a material
adverse effect on our results of operations and financial condition.
Polish tax laws are not well developed, and we may be subject to review from time to time which could result
in material liabilities.
Poland has a number of laws related to various taxes enforced by governmental authorities. Applicable
taxes include state income taxes, value added taxes, local taxes (with respect to real estate taxation) and transfer
taxes. In addition, most regulations related to these taxes have not been in force for significant periods, in
21
contrast to more developed market economies and are subject to frequent changes. As a result, implemented laws
and regulations are often unclear or inconsistent. Accordingly, conflicting precedents with regard to the
application and interpretation exist both among and within government ministries and local tax authorities, thus
creating uncertainties and areas of potential conflict.
Our tax position (including matters related to our corporate structure) is subject to possible review and
stringent investigation by a number of Polish tax authorities, who exercise strict oversight and who are enabled
by law to impose extremely severe (in case of revealing irregularities in tax settlements) fines, penalties and
interest charges. Due to increasing awareness of the tax authorities to the transfer pricing issues, particularly the
related party transactions, we may be the subject of interest to the tax authorities. If for any reason our tax
position (including matters related to our corporate structure) were to be disputed by tax authorities, we could be
subject to substantial tax liabilities which could materially adversely affect our results of operations.
We depend on key personnel and may not be able to retain those employees or recruit additional qualified
personnel.
We depend to a large extent on the services of key executive officers, some of whom are our founders,
including Przemysław Sztuczkowski, to manage growth, integrate new acquisitions, plan future development and
manage day-to-day operations. The loss of the services of any of our key executive officers could adversely
affect our business and results of operations.
We also rely heavily on a highly trained workforce of sales managers and sales personnel, as well as
operations and logistics, finance, accounting, business development and information technology employees. It is
often difficult to locate trained personnel for these positions, particularly in Polish regional cities. Should we lose
members of our trained workforce, we may be unable to replace them with other suitably qualified people and
may have to invest in training unqualified persons for their positions. This may adversely affect our business and
Certain risks associated with investing in emerging markets such as Poland could materially adversely affect
our results of operations.
Since 1989, Poland has been undergoing transformation from a one-party state with a centrally planned
economy to a pluralist democracy with a free-market orientated economy. Changes made in the course of this
transformation include the privatization of certain state-owned assets, the removal of exchange controls, the
modernization of the Polish banking system and the creation of a modern capital market. Poland’s accession to
the European Union on May 1, 2004 has expedited these reforms, the majority of which have been beneficial for
non-state owned companies like us. However, Poland is still continuing its reforms to comply with European
Union standards as well as other political and economic reforms towards a pluralist democracy with a free-
market orientated economy. Any failure of the ongoing political and economic reforms of Poland could
materially adversely affect our results of operations.
Risks Related to Austrian Acquisition

Our planned acquisition of voestalpine Stahlhandel GmbH is an important strategic initiative which presents
us with significant challenges.
The proceeds of this Offering will be used in part to finance our acquisition of a 74.9% interest in
voestalpine Stahlhandel GmbH. The acquisition of voestalpine Stahlhandel GmbH confronts us with a number of
significant challenges in integrating voestalpine Stahlhandel GmbH’s operations with our own. Our success will
depend on a number of factors, including:
Š our ability to successfully combine voestalpine Stahlhandel GmbH’s distribution channels with the
Group’s retail distribution structure;
Š our ability to maintain relationships with voestalpine Stahlhandel GmbH’s customers and suppliers;
Š our ability to integrate voestalpine Stahlhandel GmbH’s computer and information technology
systems with those of the Group;
Š our ability to work co-operatively with voestalpine Stahlhandel GmbH’s employees in pursuing our
combined strategic and operational efficiency objectives; and
Š our ability to implement our combined investment plans successfully on schedule and within budget.
There can be no assurance that the integration of voestalpine Stahlhandel GmbH will be successful and
difficulties during integration could reduce the benefits we expect to derive from the acquisition.
22
We have not been, and until the closing of the transaction will not be, involved in the management of voestalpine
Stahlhandel GmbH. As a result, our assessment of the risks and opportunities presented by the Austrian
Acquisition may not be accurate, and there may be risks of which we are not aware. The description of
voestalpine Stahlhandel GmbH contained in this Offering Memorandum is based solely upon the information
provided to us during the acquisition process.
voestalpine Stahlhandel GmbH’s operations are subject to the environmental laws and regulations
applicable in Austria and other countries, and the nature of its business may give rise to potential environmental
liability through spills, discharges or other releases of hazardous substances into air, soil and water. As such, we
may be potentially exposed to environmental liabilities in the future.
The Austrian Acquisition is also still subject to merger control approval in Austria and Bosnia —
Herzegovina. There can be no assurance that the Austrian Acquisition will close as expected or that the relevant
competition authorities will not impose certain obligations, such as the disposal of assets, as a condition to
approving the acquisition. See “Summary — Recent Developments — voestalpine Stahlhandel GmbH” and “The
Transactions — The Austrian Acquisition” and “Business — Finished Products — Distribution — voestalpine
Stahlhandel GmbH”.
We have entered into a two-year non-competition agreement with voestalpine Stahl GmbH, a subsidiary of
voestalpine AG during which time voestalpine Stahl GmbH has agreed not to actively divert or attempt to
divert (i) any current or former employees of voestalpine Stahlhandel GmbH or (ii) any business or existing
customers from the voestalpine Stahlhandel GmbH, or any of the subsidiaries by directly or indirectly
influencing any party that is or has been an employee or customer of voestalpine Stahlhandel GmbH or
soliciting any business in any other way. If after the expiration of that two-year non-competition agreement,
voestalpine Stahl GmbH decides to reenter the retail distribution business, it could materially adversely affect
our results of operations and financial condition.
As the parent company of voestalpine Stahlhandel GmbH, voestalpine Stahl GmbH maintained
significant relationships with many of voestalpine Stahlhandel GmbH’s customers and suppliers. Any decision
by voestalpine Stahl GmbH to reenter the retail distribution business after the expiration of the non-competition
agreement could cause us to lose valuable customers and suppliers and could materially affect our results of
operations and financial condition.
Since we are only acquiring a 74.9% interest in voestalpine Stahlhandel GmbH, under Austrian law,
voestalpine Stahl GmbH, the minority shareholder, will retain a control position over significant corporate
events of voestalpine Stahlhandel GmbH through its 25.1% interest.
Upon consummation of the Austrian Acquisition, we expect to hold a 74.9% interest in voestalpine
Stahlhandel GmbH for a period of approximately two years after the Closing Date at which time we anticipate
exercising an option under the Share Purchase Agreement to allow us to purchase the remaining 25.1% interest in
voestalpine Stahlhandel GmbH from the minority shareholder, voestalpine Stahl GmbH. While we will be
responsible for the day-to-day management of and most business decisions for voestalpine Stahlhandel GmbH
during that two-year period and thereafter, under Austrian law as long as we own less than 75% in voestalpine
Stahlhandel GmbH, certain major corporate events, such as certain amendments of the articles of association, the
sale of the assets of voestalpine Stahlhandel GmbH as a whole in the course of the liquidation of voestalpine
Stahlhandel GmbH, the merger of voestalpine Stahlhandel GmbH with a stock corporation or another limited
liability company, or the agreement by voestalpine Stahlhandel GmbH to acquire assets in an amount exceeding
one fifth of the nominal amount of its share capital, require the approval of 75% of the shareholders of
voestalpine Stahlhandel GmbH. Therefore, we may not be able to make certain significant corporate changes in
voestalpine Stahlhandel GmbH’s business during that two-year period, even if we deem such changes to be in
our best interest or in the best interest of the holders of Notes, if voestalpine Stahlhandel GmbH’s minority
shareholder, voestalpine Stahl GmbH, objects.
Risks Related to the Notes and Our Structure
The Issuer is a special purpose vehicle with no revenue generating operations of its own.
The Issuer is a special purpose vehicle that was recently formed which will not pursue any revenue-
generating operations of its own as long as Notes remain outstanding. Following the Offering, the Issuer will rely
on payments to it under the intercompany notes or loans from the Company and, upon consummation of the
Austrian Acquisition, from voestalpine Stahlhandel GmbH, to make payments of interest and principal when due
on the Notes. The Issuer will have no material assets other than (i) the intercompany notes, loans or similar
arrangements (and cash held prior to on-lending) with us, (ii) the escrow account in which an amount sufficient
to redeem €60 million of Notes will be held, prior to the Austrian Acquisition or special mandatory redemption,
as the case may be and (iii) the Acquisition On-Loan, following the Austrian Acquisition.
23
Our substantial indebtedness may limit our cash flow available to invest in the on-going needs of our business,
which could prevent us from fulfilling our obligations under the Notes.
Following the consummation of the Transactions, we will have substantial debt service obligations. As of
September 30, 2006, on an adjusted pro forma basis after giving effect to the Transactions, we would have had
PLN 855.0 million (€214.8 million) of indebtedness.
The degree to which we are leveraged could have important consequences, including:
Š the impairment of our ability to obtain additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes;
Š a significant portion of our cash flow from operations must be dedicated to the payment of principal
and interest on our debt, which reduces the funds available for operations;
Š some of our debt is, and will continue to be, in currencies other than that in which we receive revenues
or in currencies other than zloty, which may result in higher interest expense in the event of increases
in the costs of foreign currency exchange;
Š some of our debt is, and will continue to be, at variable rates of interest, which may result in higher
interest expense in the event of increases in interest rates; and
Š our debt contains, and any refinancing of our debt likely will contain, financial and restrictive
covenants, the failure to comply with which may result in an event of default which, if not cured or
waived, could have a material adverse effect on us.
Our ability to generate cash depends on many factors beyond our control, and we may not be able to generate
sufficient cash to service our debt.
We cannot assure you that our business will generate sufficient cash flows from operations or that future
borrowings will be available to us in an amount sufficient to enable us to pay our debt, including the Notes, when
due or to fund our other capital requirements or any operating losses. If our future cash flows from operations
and other capital recourses are insufficient to pay our obligations as they mature or fund our liquidity needs, we
may be forced to:
Š reduce or delay our business activities and capital expenditures;
Š sell assets;
Š obtain additional debt or equity capital; or
Š restructure or refinance all or a portion of our debt, including the notes, on or before maturity.
We cannot assure you that we will be able to accomplish any of these alternatives on a timely basis or on
satisfactory terms, if at all. In addition, the terms of existing or future debt, including the Notes, may limit our
ability to pursue any of these alternatives.
Despite the level of indebtedness, we will be able to incur substantially more debt, which could further
exacerbate the risks described above.
We will be able to incur significant additional indebtedness in the future. Although each of the Indenture
governing the Notes and the Revolving Credit Facilities contains restrictions on the incurrence of additional
indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness
incurred in compliance with these restrictions could be substantial. For example, the Revolving Credit Facilities
will provide for revolving loan availability of up to €40 million. To the extent new debt is added to current debt
levels, the substantial leverage risks described above would increase. See “Description of the Notes” and
“Description of Other Indebtedness”.
The terms of our indebtedness will restrict our operating flexibility.

Among other things, the Indenture governing the Notes restricts the ability of the Company and its
subsidiaries (including the Issuer) to:
Š incur or guarantee additional indebtedness;
Š pay dividends, make distributions or redeem or repurchase their securities;
Š make investments;
Š grant security interests or create liens on their assets;
24
Š enter into transactions with their affiliates other than on an arm’s-length basis;
Š transfer or sell assets or shares in subsidiaries;
Š enter into sale and leaseback transactions;
Š guarantee future debt;
Š impair the collateral; or
Š engage in mergers or consolations.
These covenants could limit the ability of the Company to finance its future operations and capital needs
and its ability to pursue acquisitions and other business activities that may be in its interest.
If the Company fails to comply with any of these covenants, it will be in default under the Indenture, and
the Trustee or holders of the Notes could declare the principal and accrued interest on the Notes due and payable,
after any applicable cure period. These restrictions could materially adversely affect the Company’s ability to
finance future operations or capital needs or engage in other business activities that may be in its best interest.
See “Description of the Notes” and “Description of Other Indebtedness”.
In addition, our Revolving Credit Facilities require us to maintain specified consolidated financial ratios
and satisfy certain consolidated financial and operating tests. If the Company fails to meet those tests or breaches
any of the restrictive covenants, the lenders under such indebtedness could declare all amounts owing thereunder
to be immediately due and payable.
In the event that the Austrian Acquisition is not consummated within specified dates after the closing of this
Offering, or under certain other circumstances, the Mandatorily Redeemable Notes will be redeemed at 101%
of their aggregate principal amount, which means that you may not obtain the return you expect on those
Notes to the extent you are a holder thereof.
An amount of the gross proceeds of this Offering sufficient to redeem the Mandatorily Redeemable Notes at
a special mandatory redemption price will be placed in escrow pending consummation of the Austrian Acquisition.
The special mandatory redemption price will equal to 101% of the aggregate principal amount of the Mandatorily
Redeemable Notes, plus accrued and unpaid interest up to the date of redemption, if the Austrian Acquisition is not
consummated on or before June 30, 2007 in substantially the manner provided for in the Share Purchase Agreement
or the Share Purchase Agreement is terminated at any time prior thereto. The selection of the Notes for redemption
will be made by the Trustee either: (1) in compliance with the requirements of the principal securities exchange, if
any, on which the Notes are listed on an international exchange; or (2) if such Notes are not so listed or such
exchange prescribes no method of selection, on a pro rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate. See “Description of the Notes — Escrow of Proceeds; Special Mandatory Redemption”.
If the Mandatorily Redeemable Notes are redeemed, you may not obtain the return you expect to receive on those
Notes.
In addition, after the special mandatory redemption (if it were to occur), €110 million aggregate principal
amount of the Notes will remain outstanding (unless otherwise redeemed or repurchased), rather than the €170
million aggregate principal amount originally issued on the Issue Date, and thus the liquidity of the Notes may be
adversely effected.
You may face a foreign exchange risk by investing in the Notes.

The Notes will be denominated and payable in Euro. If you are a United States investor, an investment in
Notes will entail foreign exchange related risks due to among other things, possible significant changes in the
value of Euros relative to US dollars because of economic, political and other factors over which we have no
control. Depreciation of the Euro against the US dollar could cause a decrease in the effective yield of the Notes
below their stated coupon rates and could result in a loss to you on a US dollar basis.
Certain of our existing and future subsidiaries will not guarantee the Notes, and any claim by us or the
holders of the Notes against such subsidiaries will be structurally subordinated to all of the claims of creditors
of such subsidiaries.
Certain of our existing and future subsidiaries will not guarantee the Notes. In the event of a bankruptcy,
liquidation or reorganization of any of our non-guarantor subsidiaries, holders of their indebtedness and their
trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before
any assets are available for distribution to the Issuer, us or any of the other Guarantors. The Notes, therefore, will
be effectively junior and structurally subordinated to all debt and other liabilities of our non-guarantor
subsidiaries, including liabilities owed to trade creditors.
25
We may not be able to obtain enough funds to repurchase the Notes if a change of control takes place.
Upon a change of control (as defined in the Indenture governing the Notes), we may be required to
purchase all or a part of the Notes then outstanding at 101% of their principal amount, plus accrued and unpaid
interest and additional amounts, if any, as applicable, to the date of repurchase. If a change of control were to
occur, we cannot assure you that we will have sufficient funds to pay the purchase price of the outstanding Notes,
and we expect that third party financing would be required to do so. We cannot assure you that we will be able to
obtain financing on favorable terms, if at all. In addition, our other indebtedness may contain restrictions on
repayment requirements with respect to certain events or transactions that could constitute a change of control
under the Indenture governing the Notes. The inability to purchase the tendered Notes would constitute an event
of default under the Indenture governing the Notes.
The change of control provisions contained in the Indenture may not protect holder of the Notes in the
event of highly leveraged transactions, including reorganizations, restructurings or mergers, because these
transactions may not involve a change in voting power of beneficial ownership of the magnitude required to
trigger the change of control provisions. See “Description of the Notes — Change of Control”.
The security over the shares of the Issuer, the Subsidiary Guarantors and, upon consummation of the
Austrian Acquisition, voestalpine Stahlhandel GmbH, will not be granted directly to the holders of the Notes
but rather through “parallel debt” obligations.
The security over the shares of the Issuer, the Subsidiary Guarantors and, upon consummation of the
Austrian Acquisition, voestalpine Stahlhandel GmbH, that will constitute security for the obligations of the Issuer
and the Company, as Guarantor, under the Notes and the Indenture governing the Notes and the Guarantees and
certain other collateral will not be granted directly to the holders of the Notes but will be granted only in favor of
the Trustee for the Notes, as beneficiary of parallel debt obligations (the “Parallel Debt”). The Parallel Debt will
be in the same amount and payable at the same time as the obligations of the Issuer and the Company, as
Guarantor, under the Indenture in respect of the Notes and the Guarantee (the “Principal Obligations”). Any
payment in respect of the Principal Obligations shall discharge the corresponding Parallel Debt and any payment
in respect of the Parallel Debt shall discharge the corresponding Principal Obligations. As a consequence, holders
of the Notes will not have direct security and will not be entitled to take enforcement action in respect of the
security for the Notes, except through the Trustee for the Notes. However, as the Trustee will have, pursuant to
the Parallel Debt, a claim against each of the Issuer and the Company, as Guarantor, for the full principal amount
of the Notes, holders of the Notes bear some risks associated with a possible insolvency or bankruptcy of the
Trustee. The Parallel Debt obligations referred to above will be contained in the Indenture, which will be
governed by New York law.
It should be noted that the notions of trust and trustee are defined by the Hague Convention of July 1,
1985 that France did not ratify. France has not otherwise implemented such notions in its laws and regulations. It
is therefore uncertain whether French courts would enforce security subject to French law granted in favour of
the Trustee.
In addition, Parallel Debt structures have not yet been tested under Polish or French law, and we cannot
assure you that they will eliminate or mitigate the risk of unenforceability posed by such applicable laws. If any
challenge to the validity of the security interests or the Parallel Debt structure was successful, the holders of the
Notes may not be able to recover any amounts under the security interest.
The remedies available to enforce the share pledge by the Company over its shares in voestalpine Stahlhandel
GmbH are governed by Austrian law. The security over the shares will be granted through Parallel Debt
obligations and it may not be possible under Austrian law to enforce the pledge.
Under Austrian law the validity and enforceability of security rights is a question of the lex situs of the
respective goods and rights and the Austrian Act on International Private Law (Internationales Privatrechts-
Gesetz) stipulates that the creation and the termination of a pledge is subject to the laws of the country where the
pledged assets are located. The share pledge itself will only become effective when perfection has been made,
which in the case of shares in a limited liability company requires a notification to the company.
In the case of a merger, de-merger or any other form of reorganization, additional steps may be necessary
to cover newly issued shares in voestalpine Stahlhandel GmbH then existing and/or newly acquired participations
by the Company as pledgor under the share pledge agreement(s) in the share capital of voestalpine Stahlhandel
GmbH or its legal successor(s).
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The validity and enforceability of the share pledge will depend on the validity of the respective
obligations that are secured by such pledge. Under Austrian law a pledge is an accessory right (akzessorisches
Recht) and will therefore be subject to the same legal consequences as the secured obligation. If the secured
obligation is terminated or not valid, the same applies to the pledge. The pledge can furthermore not be separated
from the secured obligation, which means that it can only be held and enforced by the creditor of such secured
obligations.
The security granted over the shares will be granted through Parallel Debt obligations. Under Austrian
law, this structure is generally effective as long as the Trustee is and will be a joint and several creditor of each
and every obligation of the Issuer towards the holders of the Notes and the Trustee has its own independent right
to demand performance by the Issuer of such obligations.
In addition, Austrian corporate law contains strict capital maintenance rules for the protection of a
company’s creditors and transactions with related parties must comply with these capital maintenance rules.
Consequently, there is a risk that competent courts would hold the transactions entered into, or the security
provided by, the Austrian companies invalid in whole or in part, if there is a violation of such rules.
The value of the collateral securing the Notes may not be sufficient to satisfy the Issuer’s obligations or the
Company’s obligations as guarantor under the Notes and such collateral may be reduced or diluted under
certain circumstances.
As a matter of applicable law, the security over the collateral granted to the holders of the Notes will be
first ranking. In the event of foreclosure on the collateral securing indebtedness under the Notes, the proceeds
from the sale of the shares of the Issuer and the Subsidiary Guarantors or the other collateral may not be
sufficient to satisfy the Issuer’s obligations or the Company’s obligations, as Guarantor, under the Notes. The
value of the collateral and the amount to be received upon a sale of such shares will depend upon many factors,
including, among others, the ability to sell the shares of the Issuer and the Subsidiary Guarantors in an ordinary
sale and the availability of buyers. In addition, the shares of the Issuer and the Subsidiary Guarantors may be
illiquid and may have no readily ascertainable market value. The value of the other collateral will depend on the
solvency of the debtors, the value of such accounts and the applicable laws governing the enforcement of
collateral in the relevant jurisdictions.
The Indenture will permit the granting of certain liens other than those in favor of the holders of the Notes
on the collateral securing the Notes. To the extent that holders of other secured indebtedness or third parties
enjoy liens, including statutory liens, whether or not permitted by the Indenture or the collateral, such holders or
third parties may have rights and remedies with respect to the collateral that, if exercised, could reduce the
proceeds available to satisfy the Issuer’s obligations or the Company’s obligations, as Guarantor, under the
Notes. Moreover, if the Issuer issues additional Notes under the Indenture or other indebtedness which is
permitted under the Indenture to share the collateral, holders of such additional Notes or indebtedness would
benefit from the same collateral as the holders of the Notes being offered hereby, thereby diluting your ability to
benefit from the liens on the shares of the Issuer and the Subsidiary Guarantors or the other collateral. The
Intercreditor Agreement (to which certain future creditors will accede) provides that certain future creditors of
the Issuer and the Company can effectively receive the benefit, on a pari passu basis to the holders of the Notes,
of the security granted to the holders of the Notes. In addition, the Security Documents relating to the collateral
securing the Notes and the Intercreditor Agreement will provide that enforcement actions with respect to the
collateral and any other future indebtedness of the Issuer and the Company that is secured by the collateral may
only be taken by the security agent at the instruction of creditors or representatives of such indebtedness
representing at least 25% of the total indebtedness secured by the collateral securing the Notes. See “Description
of the Notes — Security — General”.
The remedies available to enforce the Złomrex Share Pledges are governed by Polish law. Due to the
uncertainties in Polish law, it may not be possible to enforce the pledge or realize the sale proceeds in a timely
manner and the proceeds of any enforcement may not be sufficient to meet your claims.
The agreements relating to the registered pledge of shares in Poland to secure obligations of the Issuer under
the Notes and the Guarantors under the Guarantees are governed by Polish law. Under Polish law, a pledgee can
receive pledged shares only if approved by a court and any enforcement of pledges normally requires a mandatory
public auction of the shares. A pledgee can however receive shares through a non-public sale of the shares or by the
assumption of ownership of the shares, provided that this has been specifically set forth in a registered pledge
agreement. The manner of disposal of pledged shares may also be subject to the consent of Polish and European
Union antitrust authorities if it could impede effective competition and/or create or strengthen a dominant position.
In addition, if certain procedures are elected to be followed under Polish law, the Security Agent may be
required to maintain a special zloty account with a Polish authorized bank to receive the proceeds of any public
sale, convert those proceeds into Euro and transfer them out of Poland. Only upon such conversion and transfer
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will the sale proceeds become available to the holders of the Notes. These requirements may restrict the ability to
convert the sale proceeds into Euro immediately upon their receipt in the special account and, therefore,
significantly delay the repatriation of the sale proceeds. Such delay may decrease, in Euro terms, the value of the
sale proceeds due to the fluctuations in the zloty to Euro exchange rate.
Under Polish law, only actual creditors may take and hold security for the purposes of securing their own
claims. Polish law does not envisage granting a pledge to a third party acting for the benefit of the creditor. The
Trustee, which is named as a pledgee under the pledge agreements, acts in its capacity as the trustee for the
benefit of the holders of Notes pursuant to the Indenture. Polish legal doctrine generally does not recognize the
concept of a trust, and the outcome of the analyses of the Trustee’s legal status and its relationship with the
holders of the Notes is uncertain. However, there is a possibility that if the Trustee is deemed to act under the
pledge agreements for its own benefit, the pledge agreements may be found to be invalid as a matter of Polish
law. On the contrary, if the Trustee is viewed by the Polish court as a representative or agent acting on behalf of
the holders of Notes, the pledge agreements may be deemed concluded on behalf of the holders of the Notes.
Under Polish law, a creditor’s claims secured by a pledge are satisfied from the proceeds of the public
sale of the pledged property. The creditors whose claims are secured by a pledge enjoy priority in relation to
unsecured creditors, but not against the creditors claiming compensation for personal injury or death, employee
salaries, or severance and similar payments, provided such claims arose before the execution of the relevant
pledge agreements. Enforcement costs have priority over all claims mentioned above. If the proceeds of the sale
of pledged property are insufficient to fully satisfy the relevant creditor’s claim secured by a pledge, the
remaining secured claims shall be satisfied together with the claims of other creditors.
The first-ranking share pledge granted by the Company over the shares of the Issuer and the security granted
by the Issuer with respect to the Notes may be declared null and void in case of an insolvency proceeding
brought in France.
The validity of the first-ranking share pledge granted by the Company over its shares of the Issuer or the
security granted by the Issuer with respect to the Notes (including the assignment of the Acquisition On-Loan
and the Intercompany Proceeds Note) could be challenged in a French proceeding in the event that insolvency
proceedings were commenced in France against the Company or the Issuer during the 18 month period following
the date on which such security interest is granted.
Article L.632-1-6° of the French Commercial Code (Code de commerce) provides that any security
interest granted after the date on which the underlying debt it secures was incurred (dettes antérieurement
contractées) and which was determined to have been granted during the hardening period, is null and void. The
hardening period (période suspecte) is a period of time the duration of which is determined by the bankruptcy
judge upon the judgement recognizing that the cessation of payments of the insolvent company has occurred. The
hardening period commences on the date of such judgement and extends for up to 18 months previous to the date
of such judgement.
Furthermore, Article L.632-2, 1st paragraph, of the French Commercial Code (Code de commerce)
provides that the bankruptcy court may declare void any agreement involving a consideration (acte à titre
onéreux) entered into during the hardening period if the bankrupt debtor’s contracting party knew that such
debtor was insolvent (cessation des paiements).
The first-ranking share pledge over the Company’s shares in the Issuer will be released and retaken in
connection with the incurrence of additional indebtedness secured by such pledge permitted under the
Indenture.
In the event of incurrence of any additional indebtedness permitted by the Indenture to share the pledge of
the Company’s shares in the Issuer, the first-ranking pledge over the Company’s shares in the Issuer will have to
be released and retaken in favor of the Notes.
You may be required to pay a “soulte” in the event you decide to enforce the share pledges by attribution of
the shares rather than by a sale of the shares in a public auction.
Under French law, a pledge over shares may be enforced at the option of the secured creditor either by a
sale of the pledged shares in a public auction (the proceeds of the sale being paid to the secured creditors) or by
“attribution” of the shares to the secured creditor, following which the secured creditor is the legal owner of the
pledged shares. In a proceeding for attribution, a court appointed expert will determine the value of the collateral
(in this case, the shares) and, if the value of the collateral exceeds the amount of the secured debt, the secured
creditors may be required to pay the obligor an amount, the “soulte”, equal to the difference between the value of
the shares as asserted by such expert and the amount of the secured debt. This is true regardless of the actual
amount of proceeds ultimately received by the secured creditors from a subsequent sale of the collateral.
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Fraudulent conveyance statutes under Polish law may limit your rights as a holder of the Notes to enforce the
security provided by the Guarantors.
The Issuer’s obligations under the Notes are guaranteed by the Guarantors, and each of the Guarantees
may be subject to review under the fraudulent transfer and conveyance laws of Poland. The Guarantors will
guarantee the payment of the Notes on a senior basis. The Notes and the Guarantees may be subject to claims that
they should be limited, subordinated or voided in favor of existing and future creditors under Polish law.
According to the Polish Civil Code, any company’s creditors may request the court to declare any legal
action (e.g. the granting of a guarantee) to be ineffective in relation to such creditor if the following conditions
are met: (i) such action is performed by the company to the creditor’s detriment, (ii) a third person profited
therefrom and (iii) the company was aware that such action was to the creditor’s detriment and the third person
knew about that or could have known acting with due diligence.
Such action is considered to be detrimental to creditors if the company became insolvent or became
insolvent to a greater extent than before performing the action in question. If the legal action is free of charge, the
creditor may claim the legal action ineffective even though the third party did not know that the debtor acted to
the creditor’s detriment.
The creditor with respect to whom the company’s legal action was declared ineffective may, with priority
over the creditors of the third party, vindicate the rights in property which as a result of the legal action were
declared ineffective, were removed from the company’s estate or did not become a part of the estate.
The measure of insolvency for purposes of fraudulent conveyance laws varies depending on the law
applied. Generally, however, a guarantor would be considered insolvent if it could not pay its debts as they
became due. If a court decided that any guarantee was a fraudulent conveyance and voided such guarantee, or
held it unenforceable for any other reason, a holder of the Notes would cease to have any claim in respect of the
guarantor and would be a creditor solely of the Issuer and the remaining guarantors.
If the Issuer cannot satisfy its obligations under the Notes and if any of the Polish guarantees is found to
be a fraudulent transfer or conveyance, the Issuer cannot assure holders of the Notes that it can ever repay in full
the amounts outstanding under the Notes. In addition, the liability of each Guarantor under the Indenture will be
limited to the amount that will result in its guarantee not constituting a fraudulent conveyance or improper
distribution, and there can be no assurances as to what standard a court would apply in making a determination of
the maximum liability of each Guarantor.
The insolvency laws of the European Union, France and Poland may not be as favorable to you as the
bankruptcy laws of the jurisdiction with which you are familiar.
European Union
Pursuant to Council Regulation (EC) no. 1346/2000 on insolvency proceedings (the “EU Insolvency
Regulation”), the court which shall have jurisdiction to open insolvency proceedings in relation to the Issuer or
any Guarantor will be the court of the Member State (other than Denmark) where the entity concerned has its
“center of main interests” (as that term is used in Article 3(1) of the EU Insolvency Regulation). The
determination of where the Issuer or any Guarantor has its “center of main interests” would be a question of fact
on which the courts of the different EU Member States may have differing and even conflicting views.
Furthermore, “center of main interests” is not a static concept and may change from time to time. Although under
Article 3(1) of the EU Insolvency Regulation there is a rebuttable presumption that the Issuer or a Guarantor
would have its “center of main interests” in the Member State in which it has its registered office. Preamble 13 of
the EU Insolvency Regulation states that the “center of main interests” of a debtor should correspond to the place
where the debtor conducts the administration of its interests on a regular basis and “is therefore ascertainable by
third parties”. In that respect, factors such as the place in which the Issuer or a Guarantor holds board meetings,
the place where the Issuer or a Guarantor conducts the majority of its business and the place where the large
majority of the Issuer’s or a Guarantor’s creditors are established may all be relevant in the determination of the
place where the Issuer or a Guarantor has its “center of main interests”. According to a recent decision of
European Court of Justice (Eurofood case C. 341-04), the presumption mentioned above can be rebutted if
factors which are both objective and ascertainable by third parties lead to the conclusion that the registered office
may not reflect the actual “center of main interests” for the company and that the “center of main interests” of
such company is actually located in another EU Member State. That could be the case particularly if a company
is not carrying out any business in the territory of the Member State in which its registered office is situated.
If the “center of main interests” of the Issuer or a Guarantor is and will remain located in the state in
which it has its registered office, the main insolvency proceedings in respect of the Issuer or a Guarantor under
the EU Insolvency Regulation would be commenced in such jurisdiction and accordingly a court in such
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jurisdiction would be entitled to commence the types of insolvency proceedings referred to in Annex A to the EU
Insolvency Regulation. Insolvency proceedings opened in one Member State under the EU Insolvency
Regulation are to be recognized in other Member States (other than Denmark), although secondary proceedings
may be opened in another Member State. If the “center of main interests” of a debtor is in one Member State
(other than Denmark) under Article 3(2) of the EU Insolvency Regulation, the courts of another Member State
(other than Denmark) may open “territorial proceedings” in the event that such debtor has an “establishment” in
the territory of such other Member State. If a debtor does not have an establishment in any other Member State,
no court of any other Member State shall have the ability to open territorial proceedings in respect of such debtor
under the EU Insolvency Regulation.
France
The Issuer is incorporated in France. Subject to the provisions of Council Regulation (EC) No. 1346/2000
on insolvency proceedings mentioned above, it will be subject to French laws and proceedings affecting
creditors, including Article 1244-1 of the French Civil Code (Code civil), conciliation proceedings (procédure de
conciliation), safeguard proceedings (procédure de sauvegarde) and judicial reorganization or liquidation
proceedings (redressement or liquidation judiciaire). The safeguard or judicial reorganization proceedings are
intended to maintain the enterprise’s activities and employment. The following is a general discussion of
insolvency proceedings governed by French law for information purposes only and does not address all the
French law considerations that may be relevant to creditors.
Grace periods
Pursuant to Article 1244-1 of the French Civil Code, French courts may, in any civil proceeding
involving the debtor, whether initiated by the debtor or the creditor, taking into account the debtor’s financial
position and the creditor’s financial needs, defer or otherwise reschedule the payment dates or payment
obligations over a maximum period of two years. In addition, pursuant to Article 1244-1, French courts may
decide that any amounts, the payment date of which is thus deferred or rescheduled, will bear interest at a rate
which is lower than the contractual rate (but not lower than the legal rate) or that payments made shall first be
allocated to repayment of the principal. If a court order under Article 1244-1 of the French Civil Code is made, it
will suspend any pending enforcement measures, and any contractual interest or penalty for late payment will not
accrue or be due during the period ordered by the court.
Conciliation proceedings
A company may, in its sole discretion, initiate conciliation proceedings (procédure de conciliation) with
respect to itself, provided it (i) is able to pay its due debts out of its available assets, or has been unable to pay its
due debts out of its available assets for less than 45 days, and (ii) experiences legal, economic or financial
difficulties. The competent court will appoint a conciliator (conciliateur) to help the company reach an
agreement with its creditors for reducing or rescheduling its indebtedness. This agreement may be either
acknowledged (constaté) by the president of the court or approved (homologué) by the court.
While the acknowledgement of the agreement by the president of the court does not entail any specific
consequences, the approval by the court will have the following consequences:
Š creditors who provide new money or goods or services designed to ensure the continuation of the
business of the distressed company (other than shareholders providing new equity) will enjoy a
priority of payment over all pre-proceeding and post-proceeding claims (other than certain post-
proceeding employment claims and procedural costs), in the event of subsequent safeguard
proceedings, judicial reorganisation proceedings or judicial liquidation proceedings;
Š in the event of subsequent judicial reorganisation proceedings or judicial liquidation proceedings, the
date of the cessation des paiements cannot be fixed by the court as of a date earlier than the date of the
approval of the agreement (see below the definition of the date of the cessation des paiements);
Š joint debtors and persons who have granted a cautionnement or a first demand guarantee can benefit
from the provisions of the agreement.
Safeguard Proceedings
A company may, in its sole discretion, initiate safeguard proceedings (procédure de sauvegarde) with
respect to itself, provided it (i) is able to pay its debts as they come due out of its available assets, and
(ii) experiences difficulties which it is not able to overcome and which are likely to lead to a cessation des
paiements.
A court-appointed administrator investigates the business of the company during an initial observation
period of 6 months, renewable once and exceptionally twice, and helps the company to elaborate a draft
safeguard plan (projet de plan de sauvegarde).
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In case of large companies (with more than 150 employees or turnover greater than 20 million), two
creditors’ committees (one for credit institutions having a claim against the debtor and the other for each supplier
having a claim that represents more than 5% of the total amount of the claims of all the debtor’s suppliers) will
then be established. These committees will be consulted on the safeguard plan drafted by the debtor’s
management during the observation period.
The committees must announce whether they approve or reject the safeguard plan within 30 days of its
proposal. The plan must be approved by a majority vote of each committee, provided that members voting
account for at least two-thirds of the outstanding claims of the creditors of each committee.
If there are any bondholders, they are presented with the plan during a general meeting of bondholders
held for that purpose.
Following approval by the creditors’ committees and subject to verification by the court that the interests
of all creditors are sufficiently safeguarded, the court will approve the plan. The safeguard plan accepted by the
committees will be binding on all the members of the committees (including those who had voted against the
adoption of the draft plan).
With respect to creditors who are not members of the committees, or in the event no committees are
established, proposals are made to each creditor individually.
Judicial reorganization or liquidation proceedings

Judicial reorganization or liquidation proceedings (redressement or liquidation judiciaire) may be
initiated against or by a company if it cannot pay its debts as they fall due out of its available assets (i.e. it is in
cessation des paiements).
The company is required to petition for insolvency proceedings (or for conciliation proceedings: see
above) within 45 days of falling into cessation des paiements. If it does not, de jure managers (including
directors) and, as the case may be, de facto managers are subject to civil liability and may be subject to criminal
sanctions.
The date of cessation des paiements is deemed to be the date of the court order commencing proceedings,
unless the court sets an earlier date, which may be up to 18 months before the date of the court order. The date of
the cessation des paiements marks the beginning of a “suspect period” (période suspecte) pursuant to which
certain transactions entered into during such period may be void or voidable.
Void transactions include transactions or payments entered into during the suspect period that may
constitute voluntary preferences for the benefit of some creditors to the detriment of other creditors and
protective measures (mesures conservatoires).
Voidable transactions include any transactions or payments made after the date of cessation des
paiements, if the party dealing with the company knew that it was in a state of cessation des paiements.
Transactions relating to the transfer of assets for no consideration are also voidable when realized during
the six-month period prior to the beginning of the suspect period.
The court order commencing the proceedings may order either the liquidation or the reorganization of the
company.
In the event of reorganization, an administrator appointed by the court investigates the business of the
company during an initial observation period, which lasts 6 months renewable once and exceptionally twice, and
makes proposals for either, (i) the reorganization of the company (by helping the debtor to elaborate a
reorganization plan, which is similar to a safeguard plan; see above), (ii) the sale of the business or, (iii) the
liquidation of the company. Committees of creditors may be created under the same conditions as in safeguard
proceedings (see above). At any time during this observation period, the court can order the liquidation of the
company. At the end of the observation period, the outcome of the proceedings is decided by the court.
Status of creditors during safeguard proceedings, judicial reorganization proceedings or judicial liquidation
proceedings
As a general rule, creditors domiciled in France whose debts arose prior to the commencement of the
proceedings must file a claim with the creditors’ representative within two months of the publication of the court
order; this period is extended to four months for creditors domiciled outside France. Creditors who have not
submitted their claims during the relevant period are barred from receiving distributions made in accordance with
the proceedings. Employees are not subject to such limits and are preferential creditors under French law.
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Subject to limited exceptions, from the date of the court order commencing the proceedings, the company
is prohibited from paying debts outstanding prior to that date and its creditors may not pursue any legal action
against the company with respect to any claim arising prior to that date. Contractual provisions such as those
contained in the Indenture that would accelerate the payment of a company’s obligations upon the occurrence of
(i) the opening of judicial reorganization proceedings or (ii) a state of cessation des paiements are not
enforceable under French law. The opening of liquidation proceedings, however, automatically accelerates the
maturity of all of the company’s obligations.
The administrator may elect to terminate or continue executory contracts (contrats en cours). If the
administrator chooses to continue a contract, the company must fully perform its post-petition contractual
obligations.
If the court adopts a safeguard plan or a reorganization plan, claims of creditors who have accepted the
plan will be paid according to the plan. With respect to creditors that have not accepted the proposals made by
the administrator and the company, the court can decide to reschedule the payment of their claims over a
maximum period of 10 years. The court can also set a time period during which the assets that it deems necessary
to the continuation of the business of the debtor may not be sold without its consent.
If the court adopts a “plan of sale of the business” (plan de cession), the proceeds of the sale will be
allocated for the payment of creditors, according to their ranking.
If the court decides to order the judicial liquidation of the company, the court will appoint a liquidator
who shall sell the assets of the company and settle the relevant debts.
Poland
Our Guarantors are incorporated in Poland and, as such, will be subject to the Polish laws regarding
insolvency or threatened insolvency, including in particular the provisions of the Polish Civil Code regarding
fraudulent conveyance or transfer (as described above) as well as the provisions of Bankruptcy and
Reorganization Law of February 28, 2003 regarding the liquidation bankruptcy, composition bankruptcy and
reorganization proceedings.
Declaration of bankruptcy
A company (and certain other entities specified in the Bankruptcy and Reorganization Law) may be
declared bankrupt by the court if it is insolvent i.e. if it does not pay its mature and payable debts. A company is
also considered insolvent if its liabilities exceed its assets, even if such company timely pays its debts.
A motion for declaration of bankruptcy of a given debtor may be filed with the court by the debtor itself
or any of its creditors. If the assets of the debtor are not sufficient to cover the costs of the bankruptcy
proceedings, the motion will be rejected by the court.
Under Polish law, there are two basic types of bankruptcy which may be declared by the court:
liquidation bankruptcy (which is the proper bankruptcy, aiming at liquidation of the assets of the debtor and
maximum possible repayment of the creditors’ claims, it ends with the liquidation of the bankrupt company) and
composition bankruptcy (which in fact opens composition proceedings aiming at reaching an arrangement
between the debtor and its creditors). The Polish law seems to favour the composition bankruptcy which allows
the debtor to continue its business activity. In the course of the proceedings, the court may change the type of the
declared bankruptcy i.e. from liquidation bankruptcy to composition bankruptcy or the other way round.
According to Polish law, any contractual provisions providing for a change or termination of the legal
relationship in case of a declaration of bankruptcy are null and void and such change or termination may only
occur pursuant to the mandatory provisions of the Bankruptcy and Reorganization Law. After the declaration of
bankruptcy, it is not possible to create any pledge, registered pledge or fiscal pledge over the assets of the
bankrupt debtor or register any security interest in the relevant register, even if such security interest was created
prior to the declaration of bankruptcy (subject to limited exceptions, mostly in composition bankruptcy).
All creditors which intend to participate in the bankruptcy proceedings must file a submission of claim to
the relevant court within the deadline specified in the declaration of bankruptcy. A claim may be submitted also
at a later stage but subject to certain exceptions and ramifications.
Void and voidable transactions

Upon the declaration of bankruptcy (irrespective of its type), certain transactions effected by the bankrupt
debtor will or may be subject to review. Certain of such transactions are considered ineffective by virtue of law
and certain may be declared ineffective by the court or judge-commissioner. The provisions of the Bankruptcy
and Reorganization Law concerning void and voidable transactions may affect the process of enforcement of the
Guarantees or the security interest securing the Guarantees.
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The following transactions are considered ineffective as against the bankruptcy estate by virtue of law:
Š disposal of or creating an encumbrance over debtor’s assets within one year preceding the filing of the
bankruptcy motion, if effected free of charge or if the consideration (received by the debtor or third
party) is unreasonably lower than the value of the disposal or encumbrance,
Š securing or payment of a debt which is not yet due, if effected within two months preceding the filing
of the bankruptcy motion,
Š any transactions with the dominant company, if effected within six months preceding the filing of the
bankruptcy motion.
The judge-commissioner may also declare ineffective as against the bankruptcy estate the establishment
of certain security interest (mortgage, pledge, registered pledge, fiscal pledge or other security in rem) over the
bankrupt debtor’s assets if it secures a third party’s debt and was effected within one year preceding the filing of
the bankruptcy motion, provided that the debtor has received no consideration, unreasonably low consideration
or that the security interests secures a debt of a dominant company.
In addition, certain transactions may be declared ineffective by the court pursuant to the provisions of the
Polish Civil Code regarding the fraudulent conveyance or transfer (as described above). In such case, the relevant
lawsuit must be brought by the receiver, court supervisor or the court manager—individual creditors cannot
challenge the allegedly fraudulent conveyance or transfer during the bankruptcy proceedings.
Composition bankruptcy
Upon the declaration of composition bankruptcy, a court supervisor is appointed in order to supervise the
activity of the bankrupt debtor and to approve all transactions outside of the ordinary course of business. The
court may also deprive the debtor of the right to continue to manage its activities and appoint a court manager
which will manage and represent the bankruptcy estate.
Generally, the debts of the company which are subject to composition bankruptcy cannot be paid by the
debtor or by the court manager, subject to certain exceptions. A council of creditors is appointed which advises
the court manager or the court supervisor, supervises their activities and grants consents for certain actions
specified in the provisions of law.
The bankrupt company will be obliged to submit the arrangement proposals setting out the debt
restructuring which may also include liquidation of the debtor’s assets. In general, the arrangement must be
approved by the majority of all creditors in each class of creditors (having not less than 2/3 of the total amount of
the claims) and by the court. The approved arrangement is binding for all creditors whose claims are covered by
the arrangement pursuant to the mandatory provisions of the Bankruptcy and Reorganization Law even if they
have not submitted their claims.
The arrangement may be annulled by the court if it is not complied with by the debtor or it is obvious that
it will not be complied with. In such case, the liquidation bankruptcy is declared.
Liquidation bankruptcy
Upon the declaration of liquidation bankruptcy, the bankrupt company may no longer manage its
activities and its assets, with limited, specified exceptions, form a bankruptcy estate represented and managed by
the receiver, supervised by the judge-commissioner and, to a certain extent, by the council of creditors. In
general, upon the declaration of liquidation bankruptcy, all debts of the bankrupt debtor may be satisfied pursuant
to the mandatory provisions of the Bankruptcy and Reorganization Law following the disposal of the debtor’s
assets by the receiver, subject to limited exceptions. The declaration of liquidation bankruptcy accelerates all the
bankrupt company’s debts which become due and payable.
The receiver is obliged to liquidate the assets of the bankrupt debtor, in accordance with the provisions of
the Bankruptcy and Reorganization Law and then to distribute the funds among the creditors. The Polish law
provides for the following categories of claims, in the sequence reflecting the order of satisfying such claims:
Š costs of the bankruptcy proceedings, premiums for retirement pension and other social insurance,
claims arising from employment, farmers’ claims arising from agreements for supply of agricultural
products produced by them (for the last two years only), periodic payments due for causing an illness,
inability to work, invalidism, alimonies, claims arising from the receiver’s or court manager’s actions,
claims from reciprocal agreements the completion of which was demanded by the receiver or the court
manager, claims arising from unjust enrichment and claims from the transactions effected upon the
court supervisor’s consent ( category one claims),
33
Š taxes, other public tributes and social security premiums (if not included in category one) for the last
year preceding the declaration of bankruptcy, together with interest and enforcement costs (all those
claims form category two claims),
Š other claims (if not included in category four), including the interest for the last year preceding the
declaration of bankruptcy, contractual damages, costs of litigation and enforcement (category three
claims),
Š interest which does not belong to any of the other categories, in the sequence which reflects the
sequence of satisfaction of the principal amount, penalties and fines, donations and endowments
(category four claims).
Some of the claims listed above may rank higher than the claims under the Guarantees, which may
decrease the chances to recover the relevant claims in case of a bankruptcy of the Guarantor. In respect of the
creditors whose rights are secured with a mortgage, pledge, registered pledge, fiscal pledge or sea mortgage, their
claims are satisfied separately out of the proceeds generated by the sale of the collateral.
Reorganization proceedings
In case it is apparent that in the near future a company (or other entity or person carrying our business
activity) will become insolvent, such company may file with the relevant court a declaration on the opening of
reorganization proceedings which must include a reorganization plan. The court may prohibit such opening in
cases specified in the Bankruptcy and Reorganization Law. If the reorganization proceedings are validly opened:
Š a court supervisor is appointed which must grant a consent to all transactions outside of the ordinary
scope of business
Š the repayment of debts is suspended
Š the accrual of interest on the debtor’s debts is suspended
Š the possibilities of effecting a set-off by the creditors are limited (as in the case of bankruptcy)
Š no enforcement or injunction proceedings may be initiated against the debtor (and the pending ones
are suspended).
The reorganization plan should provide for a method of restructuring the debts of the reorganized
company. The debt restructuring scheme is subject to approval by the creditors and by the court and has similar
effects as the arrangement made pursuant to the composition bankruptcy for those creditors which have been
notified of the meeting of creditors which approved the debt restructuring.
Austria
voestalpine Stahlhandel GmbH and certain of its subsidiaries are organized under the laws of Austria. The
following is a general discussion of the insolvency proceedings under Austrian law. The Austrian Bankruptcy
Code (Konkursordnung) provides for two situations under which insolvency proceedings can be commenced;
upon the occurrence of illiquidity and upon the occurrence of overindebtedness. Illiquidity is defined as the
inability to pay its debts within a reasonable time of when they are due. Overindebtedness is not defined but
pursuant to legal practice it is assumed if the debtor’s accumulated losses exceed its nominal capital plus capital
reserves and liquidation values.
Judicial Proceedings
A debtor or a creditor of a company can initiate bankruptcy proceedings by filing an application for the
opening of a bankruptcy proceeding without undue delay. If the conditions for insolvency are met, the
application must be filed within 60 days of the debtor becoming aware of its insolvency. If the application is
unduly delayed the debtor is liable for damages incurred by its creditors and the legal representative of the debtor
is personally liable for damages incurred by the insolvent company.
Immediately upon the filing of an application, the court appoints a bankruptcy trustee and from this time
all the debtor’s legal acts are ineffective and payments to the debtor do not effect discharge of any debts and the
debtor’s assets form part of the bankruptcy estate over which the bankruptcy trustee exercise exclusive rights of
administration. Generally, legal acts set prior to the date of insolvency or opening of bankruptcy proceedings as
well as securities perfected prior to such time are not concerned by the opening of bankruptcy proceedings.
Within a period of 90 days from the opening of bankruptcy proceedings, the exercise of rights and
recovery of assets is inadmissible if this would endanger the continued operation of the debtor’s business.
34
Void and voidable transactions
A legal act that unduly favors a single creditor and that is performed within the period of 60 days prior to
the date of insolvency can be voided by the bankruptcy trustee, unless bankruptcy proceedings are opened later
than one year after such act has occurred. In addition, acts entered into with third parties after the company
becomes insolvent are voidable by the receiver provided that the third party knew or should have know that the
company was insolvent and provided further that these acts are detrimental to other creditors of the company,
unless bankruptcy proceedings are opened later than six months after such act has occurred.
Composition proceedings
Apart from the bankruptcy proceedings that aim for liquidation of the company, Austrian law provides
also for the opening of composition proceedings in accordance with the Austrian Composition Code
(Ausgleichsordnung), which aims for the continuation of the insolvent company. Composition proceedings do not
deprive the debtor of all rights to make any disposition with respect to the debtor’s property, and do not confer
the administration thereof to a receiver. The debtor is barred from performing certain legal acts or entering into
some kind of transactions (e. g. alienating real estate) and all the acts are supervised by a court-appointed
receiver. If a payment quota of at least 40% for all unsecured creditors can be reached, the remaining proportions
of the insolvent company’s debts are deemed to be finally settled.
Interest payments under the Intercompany Proceeds Notes may be subject to Polish withholding tax.
In general, interest payments on borrowed funds made by a Polish entity to a non-resident are subject to
Polish withholding tax rate of 20% unless the withholding tax is reduced or eliminated pursuant to the terms of
an applicable tax treaty. Based on professional advice we have received, we believe that interest payments made
by the Company under the Intercompany Proceeds Notes to the Issuer should not be subject to withholding tax
under the terms of the double taxation treaty between Poland and France. However, there can be no assurance
that such relief will be always available.
If the interest payments from the Company to the Issuer under the Intercompany Proceeds Notes are
subject to any withholding of Polish tax, the Company will be obliged under the Intercompany Proceeds Notes,
subject to certain conditions, to increase interest payments (i.e., to pay additional amounts) as may be necessary
so that the net payments received by the Issuer, and consequently, the holder of the Notes, will be no less than the
amounts they could have received in the absence of such withholding. It is currently unclear whether the
provision obliging the Company to increase interest payments would be permitted or whether interest payments
made by the Company under the Intercompany Proceeds Notes simply will be reduced by Polish withholding tax
at a rate of 20%, or such other rate as may be in force at the time of payment. In this case, the net amount of
payments made by the Company to the Issuer pursuant to the Intercompany Proceeds Notes may be insufficient
to the permit the Issuer to make payment in full under the Notes.
Payments under the Guarantees may be subject to Polish withholding tax.

In general, payments under a guarantee by a Polish entity to a non-resident entity shall be subject to
Polish withholding tax at a rate of 20% to the extent such payments represent Polish source income. It is possible
that the Polish tax authorities will seek to characterize payments made by the Polish guarantors as Polish source
income. In such cases, the holders of Notes may seek a reduction of withholding tax under any applicable double
taxation treaties between their countries of residence and Poland (one condition of relief under an applicable
treaty will be the provision of a certificate of tax residence by the recipient of payment). However, there can be
no assurance that such relief will be available.
Double taxation treaty relief may not be available if a Polish source payment is made to a person other
than the beneficial owner of the payment. As a result, payments under the Guarantees to the Trustee may be
subject to Polish withholding tax, and holders of the Notes may be unable to obtain a refund of the tax withheld.
If payments made by the Guarantors are subject to any withholding of Polish tax as a result of which the holders
of Notes may receive payments under the Notes that are reduced by the amount of such withholding, the
Guarantors are obliged, subject to certain conditions, to increase payments as may be necessary so that the net
payments received by the holders of the Notes will be equal to the amounts they would have received in the
absence of such withholding. It should be noted, however, that the tax gross-up provisions in the indenture may
not be enforceable under Polish law.
Tax might be withheld on dispositions of the Notes in Poland, reducing their value.
If a non-resident holder of Notes that is a legal entity or organization sells the Notes and receives
proceeds from a person who has the obligation to withhold Polish tax where such tax is due, there is a risk that
35
the part of the proceeds, if any, representing accrued interest may be subject to a 20% Polish withholding tax
subject to double taxation treaty relief. There is no assurance that advance double taxation treaty relief would be
granted to an individual, and obtaining a refund can involve considerable practical difficulties. The imposition or
possibility of imposition of this withholding tax could adversely affect the value of the Notes.
Our pro forma financial information and our adjusted pro forma financial information presented herein may
not be representative of our actual results, and our future financial condition, results of operations and cash
flows may differ materially from such information.
This Offering Memorandum contains unaudited pro forma consolidated results of our business reflecting the
Polish Acquisitions and assuming the Austrian Acquisition on a pro forma basis as of and for nine months ended
September 30, 2006, the year ended December 31, 2005 and the twelve months ended September 30, 2006. This
unaudited pro forma consolidated information does not necessarily reflect our consolidated financial position, results of
operations and cash flows as they would have been if transactions or events described therein actually occurred on the
dates specified above, nor are they indicative of our future consolidated financial condition, results of operations and
cash flows.
Due to limited information available it was impracticable to determine the fair values of the identifiable
assets (except for inventories), liabilities and contingent liabilities of voestalpine Stahlhandel GmbH for the
accounting of the anticipated business combination, which would be required under IFRS 3 Business
Combinations. Therefore, it was assumed that the carrying amounts of assets, other than inventories, and
liabilities presented in the balance sheet of voestalpine Stahlhandel GmbH represent their fair values.
Due to the limited information available it was impracticable to adjust the valuation of inventories held by
voestalpine Stahlhandel GmbH to the first in first out basis, which is a basis for inventory valuation applied by
the Company.
The historical consolidated financial statements of voestalpine Stahlhandel GmbH as at and for the year
ended 31 December 2005 and as at and for the nine month period ended 30 September 2006 that were used in the
compilation of the pro forma financial information did not include the financial statements of certain
subsidiaries. The sum of total assets of subsidiaries excluded from the historical consolidated financial
statements, before consolidation adjustments as at December 31, 2005 or March 31, 2006 (depending on their
financial year end) and September 30, 2006 amounted to approximately €24.2 million and €43.6 million,
respectively. Due to limited information available, it was impracticable to include the financial statements of
these subsidiaries in the pro forma financial information.
The unaudited pro forma results reflect the consummation of the Polish Acquisitions and the Austrian
Acquisition but do not reflect the consummation of the Offering (except to the extent the proceeds of the
Offering were assumed to be utilized to consummate the Austrian Acquisition) or the Refinancing. We have
included additional adjusted pro forma financial results and other information in this Offering Memorandum that
reflect the completion of the entire Offering and the Refinancing and which are based on additional assumptions
with respect to the results of these transactions that we believe to be reliable. To the extent these assumptions are
not accurate, our as adjusted pro forma financial results could differ materially from those we have reported.
The interests of our principal shareholder may conflict with your interests.
The interests of our principal shareholder, in certain circumstances, may conflict with your interests as
holders of the Notes. As of the date of this Offering Memorandum, Przemysław Sztuczkowski owns all of the
shares of the Company. As a result, he has and will continue to have, directly or indirectly, the power, among
other things, to affect our legal and capital structure and our day-to-day operations, as well as the ability to elect
and change our management and to approve any other changes to our operations. See “Related Party
Transactions.”
Transfer of the Notes will be subject to certain restrictions.

The Issuer has not agreed to register, and does not intend to register, the Notes under the US Securities
Act or any US state securities laws. You may not offer to sell the Notes, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state
securities law. The Issuer has not undertaken to register the Notes or to effect any exchange offer for the Notes in
the future. Furthermore, the Issuer has not registered the Notes under any other country’s securities laws. You
should read the discussion under the heading “Notice to Investors” for further information about these transfer
restrictions. It is your obligation to ensure that your offers and sales of Notes within the United States and other
counties comply with any applicable securities laws.
36
The Notes will initially be held in book-entry form and, therefore, you must rely on the procedures of the
relevant clearing system to exercise any rights or remedies.
Unless and until definitive Notes are issued in exchange for book-entry interests in the Notes, owners of
the book entry interests will not be considered holders of the Notes. Instead, the common depository, or its
nominee, will be deemed the sole holder of the Notes.
There may not be an active trading market for the Notes in which case your ability to sell the Notes may be
limited.
There is no existing market for the Notes. We have made an application to list the Notes on the Official
List of the Luxembourg Stock Exchange and to trade them on the Euro MTF Market in accordance with the rules
of that exchange but cannot guarantee the liquidity of any market that may develop for the Notes, your ability to
sell the Notes or the price at which you may be able to sell the Notes. Liquidity and future trading prices of the
Notes will depend on many factors, including, among other things, prevailing interest rates, results of operations
and the market for similar securities. The Initial Purchaser has informed us that it intends to make a market in the
Notes after completing this offering. It is not, however, obligated to do so. Any market-making that is
commenced may be halted at any time. In addition, changes in the overall market for high yield securities and
changes in our financial performance in the markets in which we operate may adversely affect the liquidity of
any trading market in the Notes that does develop and any market price quoted for the Notes. As a result, we
cannot ensure that an active trading market will actually develop for the Notes.
Historically, the markets for non-investment grade debt such as the Notes have been subject to disruptions
that have caused substantial volatility in their prices. Any market for the Notes may be subject to similar
disruptions. Any disruptions may affect any liquidity and trading of the Notes independently of our financial
performance and prospects and may have an adverse effect on the holders of the Notes.
Foreign judgments may not be enforceable against us.

Although the Indenture and certain other agreements in connection with the Offering will require the Issuer
and the Guarantors to submit to the jurisdiction of the courts of the State of New York for claims and causes of
action brought by any party thereto against us, our presence or the presence of the Guarantors outside the United
States may limit legal recourse against them. We are incorporated in France and our subsidiaries are incorporated
under a number of jurisdictions, including Poland, France, and Germany. All of the directors and executive officers
of the Issuer and the Guarantors named in this Offering Memorandum are residents outside of the United States. All
of our assets and the assets of the Guarantors and the assets of their respective officers and directors are currently
located outside the United States. As a result, holders of the Notes may not be able to effect service of process
within the United States on us or any Guarantor or any of our or their respective officers and directors. Similarly,
the holders of the Notes may not be able to obtain or enforce New York court judgments against us or the
Guarantors or any of our or their respective officers and directors.
37
THE TRANSACTIONS
This Offering, the Refinancing, the establishment of the Revolving Credit Facilities, the Austrian
Acquisition and the related transactions are referred to in this Offering Memorandum as the “Transactions”. See
“Use of Proceeds”, “Capitalization” and “Description of Other Indebtedness”.
The Refinancing
Upon consummation of this Offering and the application of the proceeds as described under “Use of
Proceeds”, the Company and its subsidiaries (not including voestalpine Stahlhandel GmbH and its subsidiaries)
will have no external indebtedness for borrowed money outstanding other than:
Š the Notes;
Š receivables facilities providing for the factoring/securitization of the Company’s and its
subsidiaries’ accounts receivable in amounts not to exceed PLN 55.5 million (€13.9 million) at any
one time outstanding, of which approximately PLN 40.1 million (€10.1 million) was outstanding
as of September 30, 2006;
Š under loan agreements with the National Fund in an amount not to exceed PLN 27.7 million (€7.0
million) at any one time outstanding (the amount outstanding as of September 30, 2006), (e) under
various leasing agreements in amounts not to exceed PLN 37.6 million (€9.5 million) (the amount
outstanding as of September 30, 2006);
Š indebtedness of the Centrolstal Group of PLN 26.4 million (€6.6 million) of which PLN 21.2
million (€5.3 million) was outstanding as of September 30, 2006; and
Š and indebtedness of Kapitał and the Company under discount promissory note agreements of PLN
17 million (€4.3 million) and PLN 10 million (€2.5 million), respectively, of which PLN 8.9
million (€2.2 million) was outstanding as of September 30, 2006.
(the indebtedness above other than the Notes being collectively referred to as the “Surviving Indebtedness”). See
“Description of Other Indebtedness” in this Offering Memorandum.
The aggregate existing indebtedness of the Group to be repaid in connection with the Refinancing
outstanding as of September 30, 2006 (a total of approximately €71.8 million) includes:
Š the repayment of existing bank debt of the Company in an aggregate amount of PLN 274.0 million
(€68.8 million);
Š the repayment of existing bank debt of Ferrostal Łabe˛dy in an aggregate amount of PLN
10.6 million (€2.7 million);
Š the repayment of existing bank debt of Szopienice in an aggregate amount of PLN 0.8 million
(€0.2 million);
Š the repayment of existing bank debt of HSW-HSJ in an aggregate amount of PLN 0.3 million
(€0.07 million); and
Š accrued interest.
Revolving Credit Facilities

We will enter into revolving credit facilities with certain Polish banks in an estimated aggregate amount
of up to €40.0 million. We have entered into an agreement with Fortis Bank Polska S.A. (the “Fortis
Agreement”) and have offers from BRE Bank S.A. (the “BRE Bank Offer”) and Bank BPH S.A. (the “Bank BPH
Offer”) providing binding commitments for an aggregate of amount of borrowings of approximately €60 million.
Under the Fortis Agreement, PLN 76.6 million (€19.2 million) will be made available under a credit
facility with an interest rate of 0.8% over WIBOR. The Fortis Agreement contains financial covenants including
a net debt to EBITDA ratio of no higher than 3.5 (with the first test of compliance on and for the period ended
September 30, 2007), EBITDA to interest ratio not less than 2 to 1 (or the level of such ratio in the Indenture
which is 2.25 to 1), a solvency ratio no lower than 20% in 2007 and 25% in 2008 and a security package
consisting of an assignment of receivables of the Company of PLN 30 million (€7.5 million) per month and a
pledge of inventories of the Company of PLN 50.0 million (€12.6 million).
Under the BRE Bank Offer, PLN 72.2 million (€18.1 million) would be made available under a credit
facility with an interest rate of 0.95% over WIBOR. The BRE Bank Offer contains financial covenants including
38
a current liquidity ratio of no lower than 1, a net profit margin of not lower than 2%, revenues of the Company
being no lower than PLN 100.0 million (€25.1 million) on a monthly basis and a security package consisting of
an assignment of receivables of the Company and HSW-HSJ of PLN 39.0 million (€9.8 million), a pledge of
inventories of the Company and HSW-HSJ of PLN 52 million (€13.1 million), and a secured cash deposit on
bills of exchange of PLN 6.3 million (€1.6 million).
Under the Bank BPH Offer, PLN 80.0 million (€20.1 million) would be made available under a credit
facility with an interest rate of 0.9% over WIBOR. The Bank BPH Offer has no financial covenants but contains
a security package consisting of an assignment of receivables of the Company of PLN 64.0 million (€16.1
million) and a pledge of inventories of the Company of PLN 64.0 million (€16.1 million). See “Description of
Other Indebtedness”.
Escrow of Proceeds
Pending closing of the Austrian Acquisition, a portion of the gross proceeds of this Offering sufficient to
redeem €60.0 million principal amount of the Notes will be placed in escrow pending consummation of the
Austrian Acquisition. In the event that the Austrian Acquisition is not completed on or prior to June 30, 2007 in
substantially the manner provided for in the Share Purchase Agreement, or the Share Purchase Agreement is
terminated at any time prior thereto, the Notes will be subject to a special mandatory redemption. See
“Description of the Notes — Escrow of Proceeds; Special Mandatory Redemption”. If the Austrian Acquisition
is completed on or before June 30, 2007 in substantially the manner provided for in the Share Purchase
Agreement, the escrowed funds will be released to us for application as described under “Description of Notes —
The Intercompany Proceeds Note” and “— The Acquisition On-Loan”.
The Austrian Acquisition

closing and the remaining 25.1% of which will be purchased at the time of the exercise of the put/call option, if
GmbH and to make an equity contribution to voestalpine Stahlhandel GmbH in the overall amount of
€23.2 million. This equity contribution will not impact the amount of our ownership interest. In addition, the
entire profit of voestalpine Stahlhandel GmbH (excluding non-recurring and non-operating items) for the period
from April 1, 2006 until December 31, 2006, plus certain dividends in the aggregate of approximately
€23.3 million relating to a reorganization and the realization of reserves and the release of retained profits
relating to two companies in voestalpine Stahlhandel GmbH, will be paid to voestalpine Stahl GmbH in the form
of a dividend (or advance thereof). This dividend will be netted from the enterprise value. In connection with the
Austrian Acquisition, we will repay all treasury obligations of voestalpine Stahlhandel GmbH through the
Acquisition On-Loan. These treasury obligation repayments will be netted from the enterprise value.
ambient Stalhandel s.r.l. (Romania). These subsidiaries were not historically consolidated in voestalpine AG’s
Forma Consolidated Information”. voestalpine Stahlhandel GmbH’s largest market is in Austria, which
39
voestalpine Stahlhandel GmbH estimates accounted for approximately 79.8% of its consolidated revenues in the
fiscal year ended March 31, 2006 (compared to 78.9% in the fiscal year ended March 31, 2005). voestalpine
Stahlhandel GmbH had on average 451 employees and an overall trade volume of approximately 455,000 tonnes
in 2005. See “Business — Finished Products — Distribution — voestalpine Stahlhandel GmbH” for a more
detailed discussion of voestalpine Stahlhandel GmbH’s business.
former Soviet Union will be enhanced because our increased economies of scales will enable us to
in Euro.
The Austrian Acquisition, which is expected to close in the first half of 2007, remains subject to merger
control approval in Austria and Bosnia-Herzegovina.
herein.
40
USE OF PROCEEDS
The gross proceeds from this Offering of the Notes will be €170.0 million. On the closing date, after the
payment of related fees and expenses, we will use a portion of the net proceeds from this Offering of the Notes to
complete the Refinancing. Upon consummation of the Austrian Acquisition, we will use the remaining portion of
the net proceeds from this Offering to finance the Austrian Acquisition and pay related fees and expenses and for
general corporate purposes.
Source and Uses of Funds

The following table illustrates the estimated sources and uses of funds from this Offering of the Notes, the
Refinancing, the establishment of the Revolving Credit Facilities and the consummation of the Austrian
Acquisition. Actual amounts will vary from estimated amounts depending on several factors, including purchase
price adjustments at closing and differences in our cash balances at the closing of the Austrian Acquisition.
Sources of Funds(1) Uses of Funds(1)

(€ millions) (€ millions)
The Notes offered hereby . . . . . . . . . . . . . . . 170.0 Cash(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
Revolving Credit Facilities(2)(3) . . . . . . . . . . . 0.0 Repayment of the existing facilities and
other indebtedness (other than
Surviving Indebtedness)(4) . . . . . . . . . . 70.8
Funding of the Austrian Acquisition
(including repayment of certain
indebtedness of the voestalpine
Stahlhandel GmbH) . . . . . . . . . . . . . . . 87.0
Payment of fees and expenses . . . . . . . . . 8.5
Total sources of funds . . . . . . . . . . . . . . . . . 170.0 Total uses of funds . . . . . . . . . . . . . . . . . 170.0
(1) The Austrian Acquisition closing is expected to occur in the first quarter of 2007. This table reflects
forward-looking estimates.
(2) Total availability under the Revolving Credit Facilities is expected to be €40.0 million, none of which is
expected to be drawn down upon consummation of the Austrian Acquisition. The Company has already
entered into the Fortis Agreement, one of these Revolving Credit Facilities. See “The Transactions—
Revolving Credit Facilities” and “Description of Other Indebtedness”.
(3) To the extent the repayment of the existing facilities or the funding of the Austrian Acquisition exceed the
estimated amounts, available cash (including other cash on hand) will be reduced by the corresponding
amount of the required additional payment or amounts will be drawn under the Revolving Credit
Facilities.
(4) Based on our outstanding indebtedness as of September 30, 2006. Excludes accrued and unpaid interest
through the repayment date.
Escrow of Proceeds
Pending closing of the Austrian Acquisition, a portion of the gross proceeds of this Offering sufficient to
redeem €60 million principal amount of the Notes will be placed in escrow pending consummation of the
Austrian Acquisition. In the event that the Austrian Acquisition is not completed on or prior to June 30, 2007 in
substantially the manner provided for in the Share Purchase Agreement, or the Share Purchase Agreement is
terminated at any time prior thereto, the Notes will be subject to a special mandatory redemption. See
“Description of the Notes — Escrow of Proceeds; Special Mandatory Redemption”. If the Austrian Acquisition
is completed on or before June 30, 2007 in substantially the manner provided for in the Share Purchase
Agreement, the escrowed funds will be released to us.
41
CAPITALIZATION
The following table sets forth on a consolidated basis under IFRS our capitalization as of
September 30, 2006 on an actual basis and as adjusted to reflect the Transactions as if those events had occurred
as of September 30, 2006.
You should read this table in conjunction with the information contained elsewhere in this Offering
Memorandum under the headings, “Use of Proceeds”, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, “Description of Other Indebtedness”, and “Description of the Notes” and
the “Unaudited Pro Forma Consolidated Financial Data” and “Consolidated Financial Statements” and
accompanying notes thereto included elsewhere in this Offering Memorandum.
As of September 30, 2006
Actual As Adjusted
(PLN (€ (PLN (€
millions) millions) millions) millions)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.6 6.9 53.3 13.4
Debt:
Notes offered hereby(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 676.6 170.0
Revolving Credit Facilities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.0 0.0
Interest-bearing loans and borrowings(1)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 380.0 95.5 178.4 44.8
Bank Overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.0 10.3 — —
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.1 0.2 0.1
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421.2 105.8 855.2 214.8
Total equity(4) ............................................... 389.3 97.8 389.3 97.8
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810.5 203.6 1244.5 312.7
(1) Prior to the consummation of the Austrian Acquisition, a portion of the proceeds necessary to redeem
€60.0 million principal amount of the Notes in the case of a special mandatory redemption will be placed
in escrow. Upon consummation of the Austrian Acquisition, these funds will be released from escrow and
a portion of these funds will be on-lent to voestalpine Stahlhandel GmbH to be used to refund certain
outstanding indebtedness of voestalpine Stahlhandel GmbH and its subsidiaries, which will become
subsidiaries of the Company upon consummation of the Austrian Acquisition.
(2) We will enter into Revolving Credit Facilities providing for up to €40 million of borrowings. We expect
that no amounts under the Revolving Credit Facilities will be outstanding upon consummation of the
Transactions. The Company has already entered into the Fortis Agreement, one of these Revolving Credit
Facilities. See “The Transactions — Revolving Credit Facilities” and “Description of Other
Indebtedness”.
(3) Includes an estimated €9.8 million additional indebtedness of voestalpine Stahlhandel GmbH and its
subsidiaries that will remain outstanding following the consummation of the Austrian Acquisition. Does
not reflect PLN 10 million (€2.5 million) of additional indebtedness available to Kapitał under discount
promissory note agreements, none of which was drawn down as of September 30, 2006.
(4) Includes a minority interest of PLN 35.0 million (€8.8 million).
Other than as disclosed herein, there has been no significant change in our capitalization since
September 30, 2006.
42
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated financial data of the Company presents pro forma
income statement data for the nine and twelve months ended September 30, 2006 and for the year ended
December 31, 2005 and pro forma balance sheet data as of the periods then ended which shows the estimated pro
forma impact on our Consolidated Financial Statements of the Polish Acquisitions and the Austrian Acquisition.
The adjustments made in order to present the unaudited pro forma consolidated interim financial data
have been made based on available information and assumptions that our management believes are reasonable.
The unaudited pro forma consolidated financial data are for informational purposes only and do not purport to
present what our results would actually have been had the Polish Acquisitions and the Austrian Acquisition
occurred on the dates presented, nor should they be used as the basis of projections of our results of operations or
financial position for any future period.
The unaudited pro forma consolidated financial data should be read in conjunction with the “Consolidated
Financial Statements”, the “Pro Forma Financial Information” and accompanying notes included elsewhere in
this Offering Memorandum and the information set forth in “The Transactions”, “Use of Proceeds”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Description of
Other Indebtedness” and “Description of the Notes”.
43
Unaudited Pro Forma Consolidated Interim Income Statement and Balance Sheet Data
as of and for the nine months ended September 30, 2006
1.01.2006- 1.01.2006-
1.01.2006- 1.01.2006- 30.09.2006 30.09.2006 1.01.2006-
30.9.2006 31.01.2006 Total historical voestalpine 30.09.2006
Złomrex Group HSW-HSJ without voestalpine Pro Forma Stahlhandel Pro Forma Pro Forma
Historical Historical(3) Stahlhandel(1) Adjustments(2) Historical Adjustments Total
Revenue . . . . . . . . . . . . . . 1,417.0 29.7 1,446.7 (7.5) 965.0 — 2,404.2
Cost of revenue . . . . . . . . (1,228.6) (25.2) (1,253.7) 13.0 (838.5) — (2,079.2)
Gross profit . . . . . . . . . . . 188.4 4.5 192.9 5.5 126.5 — 324.9
Other income . . . . . . . . . . 2.7 — 2.7 — 11.5 — 14.1
Distribution expenses . . . . (21.6) (.1) (21.7) — (71.5) — (93.2)
Administrative
expenses . . . . . . . . . . . . (52.8) (.7) (53.4) (.01) (19.3) — (72.7)
Other expenses . . . . . . . . . (7.0) (.3) (7.3) — (4.0) — (11.2)
Operating profit before

financing costs(4) . . . . . 109.7 3.5 113.2 5.5 43.2 — 161.9
Financial income . . . . . . . 5.3 .05 5.4 — 3.6 — 9.0

Financial expenses . . . . . . (25.2) (.05) (25.3) — (6.8) (34.4) (66.5)
Net financing costs . . . . . (19.9) ( — ) (19.9) — (3.1) (34.4) (57.5)
Share of profit of
associates . . . . . . . . . . . — — — — 2.2 — 2.3
Excess of the interest in
the net fair value of
identifiable assets,
liabilities and
contingent liabilities
acquired over cost . . . . 5.9 — 5.9 — — — 5.9
Profit before tax . . . . . . . 95.8 3.5 99.2 5.5 42.3 (34.4) 112.6
Income tax expense . . . . . (18.9) (1.1) (20.0) (.9) (11.0) 6.3 (25.6)
Profit for the period
attributable to: . . . . . . 76.9 2.4 79.2 4.6 31.3 (28.1) 87.0
Equity holders of the

parent . . . . . . . . . . . . . . 75.1 2.4 77.5 4.6 27.7 (28.1) 81.6
Minority interest . . . . . . . 1.7 — 1.7 — 3.6 — 5.4
44
30.09.2006
30.9.2006 30.09.2006 30.09.2006 voestalpine
Złomrex Group HSW-HSJ HSW-WB Pro Forma Stahlhandel Pro Forma Pro Forma
Historical Historical(3)(5) Historical(1)(5) Adjustments Historical Adjustments Total
Balance sheet data

Assets
Total non-current assets . . . . . . 514.1 — — (1.6) 171.4 69.3 753.2
Total current assets . . . . . . . . . . 624.1 — — 20.1 443.7 73.7 1,161.6
Total assets . . . . . . . . . . . . . . . . 1,138.2 — — 18.4 615.1 143.0 1,914.7
Equity
Total equity attributable to
equity holders of the
parent . . . . . . . . . . . . . . . . . . 354.3 — — 11.5 143.3 (159.3) 349.8
Minority interest . . . . . . . . . . . . 35 — — — 18.5 2.2 55.7
Total equity . . . . . . . . . . . . . . . 389.3 — — 11.5 161.9 (157.1) 405.5
Liabilities
Total non-current liabilities . . . 191.1 — — — 63.0 394.2 648.4
Total current liabilities . . . . . . . 557.8 — — 7.0 390.2 (94.1) 860.9
Total liabilities . . . . . . . . . . . . . 748.9 — — 7.0 453.2 300.1 1,509.2
Total equity and liabilities . . . 1,138.2 — — 18.4 615.1 143.0 1,914.7
(1) Effective November 2, 2006, HSW-WB and HSW-HSJ merged. For purposes of the presentation of the
unaudited pro forma consolidated financial data in this section, we refer to HSW-WB and HSW-HSJ
separately to take into account the pro forma effect as of January 1, 2005 of the Company’s acquisitions
of these companies on January 6, 2006 and January 27, 2006, respectively. Unless otherwise specifically
indicated, references in this Offering Memorandum to HSW-HSJ shall include HSW-WB.
(2) The acquisition of HSW-HSJ and HSW-WB occurred on January 27, 2006 and January 6, 2006,
respectively, and the historical financial data for those acquisitions only reflect results from HSW-HSJ
and HSW-WB from January 1, 2006 through the date of such acquisition.
(3) Adjusted to ensure presentation of financial information consistent with IFRS.
(4) Depreciation and amortization charges included in pro forma operating costs amounted to
PLN 35.4 million (€8.9 million).
(5) The acquisition of HSW-HSJ and HSW-WB occurred on January 27, 2006 and January 6, 2006,
respectively and therefore the balance sheet date for these two entities is reflected in the Złomrex Group
Historical as at September 30, 2006.
45
Unaudited Pro Forma Consolidated Income Statement Data
for the Twelve Months ended September 30, 2006
1.10.2005-
1.10.2005- 1.10.2005- 1.10.2005- 30.09.2006 1.10.2005-
30.09.2006 31.01.2006 31.12.2005 voestalpine 30.09.2006
Historical Historical(2) Historical(1)(2) Adjustments Historical Adjustments Total
Revenue . . . . . . . . . . . . . . . 1,655.5 113.0 23.4 (34.8) 1,244.7 — 3,001.9
Cost of revenue . . . . . . . . . (1,437.9) (95.8) (21.1) 34.9 (1,088.5) (4.2) (2,612.5)
Gross profit . . . . . . . . . . . . 217.6 17.2 2.3 .2 156.3 (4.2) 389.3
Other operating income . . . . 4.5 .9 .1 — 13.6 — 19.2
Distribution expenses . . . . . (26.5) (.6) (.1) — (94.8) — (122.0)
Administrative expenses . . . (63.7) (3.6) (.8) .1 (26.3) — (94.2)
Other expenses . . . . . . . . . . (9.0) (3.0) (.6) — (3.9) — (16.5)
financing costs . . . . . . . . 123.0 10.9 1.0 .3 44.9 (4.2) 175.9
Financial income . . . . . . . . . 6.6 .9 .1 — 5.3 — 12.9
Financial expenses . . . . . . . . (29.7) (.8) (.1) (3.6) (8.8) (34.7) (77.7)
Net financing costs . . . . . . . (23.1) .07 .04 (3.6) (3.5) (34.7) (64.8)
Share of profit of
associates . . . . . . . . . . . . . — — — — 1.9 — 1.9
Excess of the interest in the
net fair value of
identifiable assets,
liabilities and contingent
liabilities acquired over
cost . . . . . . . . . . . . . . . . . 5.9 — — — — — 5.9
Profit before tax . . . . . . . . . 105.8 10.9 1.0 (3.4) 43.2 (38.8) 118.8
Income tax expense . . . . . . . (20.9) (1.7) .1 .6 (11.2) 7.3 (25.5)

attributable to: . . . . . . . . 85.0 9.2 1.1 (2.7) 32.2 (31.5) 93.3
Equitable holders of the
parent . . . . . . . . . . . . . . . . 83.0 9.2 1.1 (2.7) 28.0 (31.5) 87.1
Minority interest . . . . . . . . . 2.0 — — — 4.2 — 6.2
46
Unaudited Pro Forma Consolidated Income Statement Data for the Year Ended December 31, 2005
2005
2005 2005 2005 voestalpine 2005
Historical Historical(2) Historical(1)(2) Adjustments Historical Adjustments Total
TotalIncome
statement data
Revenue . . . . . . . . 976.2 351.2 98.1 (80.1) 1,254.3 — 2,599.8
Cost of revenue . . (880.7) (298.4) (85.9) 81.0 (1,091.9) (17.5) (2,293.5)
Gross profit . . . . . 95.5 52.8 12.2 .9 162.4 (17.5) 306.3
Other income . . . . . 3.5 .9 .2 (.02) 11.8 — 16.3
Distribution
expenses . . . . . . (15.7) (2.3) (.3) — (102.2) — (120.5)
Administrative
expenses . . . . . . (40.6) (11.7) (2.5) 2.8 (30.4) — (82.5)
Other expenses . . . (4.7) (5.2) (.8) .02 (5.3) — (15.9)
Operating profit
before financing
costs(3) . . . . . . . . 38.0 34.5 8.7 3.7 36.2 (17.5) 103.6
Financial
income . . . . . . . . 3.8 2.5 .7 (.07) 6.8 23.1 36.7
Financial
expenses . . . . . . (20.9) (2.5) (.7) (10.9) (9.9) (28.4) (73.2)
Net financing
costs . . . . . . . . . . (17.0) — (.05) (10.9) (3.1) (5.4) (36.5)
Share of profit of
associates . . . . . . — — — — (.3) — (.3)
Profit before
tax . . . . . . . . . . . 21.0 34.5 8.7 (7.3) 32.8 (22.9) 66.8
Income tax
expense . . . . . . . (4.1) (6.8) (1.7) 1.4 (15.9) 5.1 (22.0)
Profit for the
period . . . . . . . . 16.9 27.7 7.0 (5.9) 16.9 (17.8) 44.9
Equity holders of
the parent . . . . . . 15.3 27.7 7.0 (5.9) 14.1 (17.8) 40.5
Minority interest . . 1.6 — — — 2.8 — 4.4
(3) Depreciation and amortization charges included in pro forma operating costs amounted to
PLN 43.7 million (€11.0 million).
47
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis is derived from and should be read in conjunction with the Audited
Consolidated Financial Statements and the notes thereto and the Unaudited Consolidated Financial Statements
appearing elsewhere in this Offering Memorandum. The Company’s Consolidated Financial Statements have
been prepared in accordance with IFRS.
Overview
We are the largest supplier of scrap metal, the second largest seller of semi-finished steel products and the
fifth largest seller of finished steel products in Poland based on volume. Our operations are fully integrated and
span the entire steel production process, including one of the largest retail distribution networks in Poland and,
upon the closing of our anticipated acquisition of voestalpine Stahlhandel GmbH, the leading warehousing and
steel distribution company in Austria with significant operations in Central and Eastern Europe. Our business is
divided into four segments, which include:
products to external customers in 2005 of which 138,000 tonnes were sold in the Polish market, and
external customers in 2005 substantially all of which were sold in the Polish market, and we had a
2005 and approximately 5% in 2006 as a result of recent acquisitions; and
Our strong position in our scrap metal and semi-finished products businesses enables us to reduce margin
Business Structure
Segments
Our business is divided into four main segments:
Š Scrap Metal — this segment includes the buying, processing, refining and selling of scrap metal to the
Group’s customers.
Š Semi-Finished Products — this segment includes the buying and processing of scrap metal into steel
billets and the sale of these steel billets to the Group’s customers.
Š Finished Products — this segment includes (i) the buying and processing of scrap metal into billets
which are in turn processed into finished products and sold to the Group’s customers, (ii) the buying
of steel billets from third parties and processing them into finished products and selling them to the
Group’s customers and (iii) the buying of finished products and the sale of those products to the
Group’s customers.
Š Other — this segment includes among others (i) the buying of non-ferrous scrap and selling it to the
Group’s customers, (ii) the processing of non-ferrous scrap into finished products and the sale of those
non-ferrous products to the Group’s customers, (iii) the buying and selling of non-ferrous products
and (iv) recycling materials, including plastic foils, paper and other products.
Intersegment Sales
We are a vertically-integrated steel company. We believe that the prices at which products are sold
between segments are generally based on those at which they could be sold to unrelated third parties. These
transactions are eliminated as intercompany transactions for purposes of our consolidated financial statements.
48
Recent Developments
closing and the remaining 25.1% of which will purchased for at the time of the exercise of the put/call option, if
GmbH and to make an equity contribution to voestalpine Stahlhandel GmbH in the overall amount of €23.2
million. This equity contribution will not impact the amount of our ownership interest. In addition, the entire
profit of voestalpine Stahlhandel GmbH (excluding non-recurring and non-operating items) for the period from
April 1, 2006 until December 31, 2006, plus certain dividends in the aggregate of approximately €23.3 million
relating to a reorganization and the realization of reserves and the release of retained profits relating to two
companies in voestalpine Stahlhandel GmbH, will be paid to voestalpine Stahl GmbH in the form of a dividend
(or advance thereof). This dividend will be netted from the enterprise value. In connection with the Austrian
Acquisition, we will repay all treasury obligations of voestalpine Stahlhandel GmbH through the Acquisition On-
Loan. These treasury obligation repayments will be netted from the enterprise value.
ambient Stahlhandel s.r.l. (Romania). These subsidiaries were not historically consolidated in voestalpine AG’s
Forma Consolidated Information”. voestalpine Stahlhandel GmbH’s largest market is in Austria, which
voestalpine Stahlhandel GmbH estimates accounted for approximately 79.8% of its consolidated revenues in the
fiscal year ended March 31, 2006 (compared to 78.9% in the fiscal year ended March 31, 2005). voestalpine
Stahlhandel GmbH had on average 451 employees and an overall trade volume of approximately 455,000 tonnes
in 2005. See “Business — Finished Products — Distribution — voestalpine Stahlhandel GmbH” for a more
detailed discussion of voestalpine Stahlhandel GmbH’s business.
former Soviet Union will be enhanced because our increased economies of scales will enable us to
in Euro.
49
The Austrian Acquisition, which is expected to close in the first quarter of 2007, remains subject to
merger control approval in Austria and Bosnia-Herzegovina.
herein.
voestalpine Stahlhandel GmbH and a number of its subsidiaries have changed their fiscal year from
March 31 to December 31. However, some of voestalpine Stahlhandel GmbH’s subsidiaries (i.e. Köllensperger
Stahlhandel GmbH, Vereinigte Biege-Gesellschaft m.b.H., ARGE Baustahl Eisen Blasy-Neptun GmbH and
BWS Bewehrungsstahl GmbH) still have their fiscal year ending on March 31. These different fiscal years may
create problems in the creation of our consolidated financial statements.
Planned Consolidation of Centrostal Operations

The Company plans to sell its interests in Centrostal Górnośla̧ski and Centrostal Opole to Centrostal (our
50.57%-owned steel distributions subsidiary) during the first quarter of 2007. Centrostal is currently conducting a
public equity offering in Poland, the proceeds of which (estimated at approximately PLN 100 million
(€25.1 million)) will be used partly to pay for the purchase of these two companies. The Company will use the
proceeds from the sale of these two companies to increase its ownership percentage in Centrostal. Following
consummation of the public equity offering, the Company expects to hold approximately 65% of the equity interest
in Centrostal. On December 29, 2006, the prospectus for Centrostal’s public equity offering was filed for approval
with the Polish Financial Supervisory Commission. Once approved by the Polish Financial Supervisory
Commission, Centrostal can commence its public equity offering.
History
We were formed as a sole proprietorship under the corporate name Przedsiȩbiorstwo Obrotu Surowcami
Wtornymi “Złomrex” by Przemysław Sztuczkowski in 1990, primarily as a company trading in non-ferrous scrap
metal. We began to trade steel scrap in 1994, steel products in 1996, and we began to process our own materials
in 1997. In 2001, we began producing steel products after purchasing the assets of ZW-WB’s rolling mill
operations in Zawiercie. ZW-WB continued to operate the rolling mill based on a cooperation agreement with us.
In 1998, Mr. Przemysław Sztuczkowski purchased all of the shares in Korba Sp. z o.o (“Korba”). In 2002, Korba
changed its corporate name to Złomrex Sp. z o.o. In 2003, Mr. Sztuczkowski made an in-kind contribution of the
Founding Company to Złomrex Sp. z o.o. In 2004, we purchased Ferrostal Łabe˛dy, which specializes in
producing semi-finished products in the form of steel billets and finished steel products and changed our
corporate form from a limited liability company to a joint stock company. In 2004, we acquired Szopienice to
launch the production of semi-finished products made from non-ferrous metals. In addition, the Company
established Nowa Jakość, which recycles waste materials. In 2006, we purchased HSW-HSJ, a leading Polish
producer of quality (high alloy) steel and long hot-rolled products (bars) made from carbon steel and high alloy
steel, together with HSW-WB, which specializes in producing hot-rolled sheets from carbon steel, high alloy
steel and special purpose steel. On November 2, 2006, HSW-WB and HSW-HSJ merged into one company,
HSW-HSJ. We recently purchased a steel product distribution network consisting of Centrostal Górnośla˛ski,
Centrostal and Centrostal Opole to expand the retail distribution of our finished products throughout Poland and
intend to acquire a 74.9% interest in voestalpine Stahlhandel GmbH, with an option to acquire a further 25.1%
interest, to have access to its retail distribution network in Austria and Central and Eastern Europe. See
“Summary — Recent Developments — voestalpine Stahlhandel GmbH ” and “The Transactions — The Austrian
Acquisition” and “Business — Finished Products — Distribution — voestalpine Stahlhandel GmbH” in this
Summary of Major Acquisitions

We have sought to develop a vertically integrated steel business through the purchase of undervalued
assets that we believe offer significant upside potential, particularly as we implement improvements in working
practices and operational methods.
The following is a summary of the terms of our major acquisitions over the last three years.
Major acquisitions since 2003

Š Ferrostal Łabe˛dy. On February 19, 2004, we purchased 82.6% of the shares of Ferrostal Łabe˛dy
from Stalexport S.A. for a purchase price of PLN 18.1 million (€4.5 million). On May 5, 2004, we
purchased an additional 8.84% shares of Ferrostal Łabe˛dy for an additional PLN 1.9 million
(€0.5 million). Ferrostal Łabe˛dy is a manufacturing plant located in Gliwice consisting of two
divisions: (i) steelworks with a current production capacity of 400,000 tonnes of steel per year and
(ii) a rolling mill with a capacity of approximately 100,000 tonnes of finished products per year.
50
Š Szopienice. On July 30, 2004, we purchased 100% of the share capital of Szopienice for a purchase
price of PLN 440,000 (€110,553). Szopienice is a foundry located in Katowice which manufactures
finished products and semi-finished products from non-ferrous scrap metal.
Š ZW-WB. On January 13, 2005, we purchased 100% of the share capital of ZW-WB for a purchase
price of PLN 5,000 (€1,256). ZW-WB is a manufacturing plant located in Zawiercie with a maximum
capacity of 180,000 tonnes of steel per year in the form of finished products. Before we acquired the
share capital of ZW-WB, ZW-WB was responsible for carrying out the production process at the
rolling mill facility in Zawiercie, which belonged at that time to the Company.
Š HSW-WB. On January 6, 2006, we purchased 100% of the share capital of HSW-WB for a purchase
price of PLN 33.0 million (€8.3 million). HSW-WB is located in Stalowa Wola and consists of one
rolling mill with a production capacity of approximately 100,000 tonnes of steel plates a year. In
November 2006, HSW-WB and HSW-HSJ merged.
Š HSW-HSJ. On January 27, 2006, we purchased 100% of the share capital of HSW-HSJ for
PLN 160.0 million (€40.2 million). HSW-HSJ is located in Stalowa Wola and consists of
(i) steelworks with a maximum production capacity of approximately 250,000 tonnes of steel per year
and (ii) a rolling mill with a production capacity of approximately 142,000 tonnes of steel rods and
bars per year.
Š Centrostal Górnośla̧ski. On February 21, 2006, we founded Centrostal Górnośla̧ski with a share
capital of PLN 50,000 (€12,563). On March 7, 2006, we purchased Centrostal Górnośla̧ski
Przedsiȩbiorstwo Panstwowe Obrotu Wyrobami Hutniczymi from the Polish state treasury for a
purchase price of PLN 56.0 million (€14.1 million) and made an in-kind contribution on that same day
of the purchased company. Centrostal Górnośla̧ski is a leader in retail sales of metallurgical products
in the Śla̧skie Voivodship.
Š Centrostal. Between March and September 2006, through various transactions, we purchased
50.57% of the shares of Centrostal S.A. (“Centrostal”) for a purchase price of PLN 11.6 million (€2.9
million). Centrostal is a leader in retail sales of metallurgical products in the Pomorskie Voivodship.
Its core business is the wholesale trade of metallurgical products, both Polish-made and imported, as
well as steel processing.
Š Centrostal Opole. On July 4, 2006, we purchased 81.68% of the share capital of Centrostal Opole
from Jerzy Rybczynski and Agencja Centrostal S.A. Following a series of transactions, we have
obtained control of Centrostal Opole with a shareholding of 99.6%. The total purchase price for the
series of transactions for a 99.6% shareholding was PLN 3.0 million (€0.8 million). Centrostal Opole
is a local retail seller of metallurgical products in Opole.
Factors Affecting Results of Operations
Our results of operations depend on the performance of end user industries, such as the construction,
machine, tube rolling, forging and ball bearing, shipping and defense industries. These sectors represent the main
industries which use our semi-finished steel products and finished steel products. Strong economic performance
in these industries translates into higher demand for steel products. As a result, the number of units produced by
these end-user industries served by us does have a significant impact on our business and results of operations.
Seasonality
Our sales, profits and net financial debt have fluctuated significantly from one quarter to the next,
depending on the number of working days and vacation periods. We therefore assume that quarterly results will
continue to fluctuate significantly. For example, our business volumes are generally lower in the winter months
of January and February than in the spring. We have also found that business slows in the summer due to
vacations, increases again in the fall, and then tends to drop off again towards the end of the year because our
customers tend to minimize their inventories, at least when prices are stable. These fluctuations have a direct
impact on our use of working capital and therefore also on net financial debt and our cash flow. Working capital
requirements are generally the highest in the second and third quarters of the year, which is reflected in net
financial debt. In the final quarter of the year, less working capital is required and net financial debt decreases
accordingly. These seasonal effects can cause differences in revenue and earnings among the various quarters of
any financial year, which means the individual quarters should not be directly compared with each other or be
multiplied to predict annual results.
Prices of raw materials and energy we use
Steel scrap is the primary material for the production of steel in our electrical arc furnaces and is a main
component in our semi-finished product business. Scrap prices decreased in 2005 after an increase in 2004.
51
Starting in the second half of 2005, scrap prices increased until the middle of 2006 and have since remained
relatively stable. Prices for alloys we use are also subject to strong fluctuations. To some extent, we are able to
pass the effect of such fluctuations in scrap prices and alloys on to customers in the form of higher prices. We
also consume substantial amounts of energy, primarily in the form of electricity, and to a lesser extent in the form
of natural gas.
Funds granted by the European Union

The use of funds granted by the European Union, a considerable part of which will be allocated to the
development of infrastructure, has triggered and will continue to trigger economic growth in the Polish steel
industry. The more EU funds are invested in Poland, the more construction will take place, thus increasing
demand for steel.
Continuous cost cutting

We develop and implement continuous initiatives to cut costs and increase productivity, both at the our
production facilities and our distribution companies. The effects of these initiatives are reviewed on a quarterly
basis.
Effect of currency fluctuations and long-term exchange rate trends

Long-term trends in exchange rates may have a material impact on our business. A strong Polish zloty
versus the Euro has an adverse impact on our competitive position in European markets because a substantial
portion of our costs are incurred in Polish zloty, in particular for energy and personnel costs, while mostly Polish
zloty sales result from product prices that are directly linked to Euro/US dollar commodity prices. A further
strengthening of the Polish zloty versus the Euro would likely exacerbate these effects and may thus have a
material adverse effect on our financial performance and result of operations.
Effect of capital expenditures and working capital commitments

Our business is heavily dependent on plant and machinery for the production and distribution of semi-
finished and finished steel products. Investment to maintain and expand production facilities is accordingly an
important priority and has a significant effect on our results of operations and financial condition. Our total
capital expenditures were approximately PLN 32.5 million (€8.2 million) in 2005, compared to PLN 28.3 million
(€7.1 million) in 2004. In 2004 investment expense exceeded depreciation, which amounted to PLN 18.6 million
(€4.7 million) in 2004, whereas in 2005 depreciation showed an increase to PLN 21.3 million (€5.4 million). For
a further discussion of past and planned investment projects, please see “— Liquidity and Capital Resources —
Net Cash from Investing Activities.”
Our business is also relatively capital-intensive and requires a significant commitment of working capital.
See “— Liquidity and Capital Resources.”
Inventory management
Inventory management is a key determinant of cash flow and profitability in the steel business. The
shorter the period between procurement and shipment, the less capital is tied up in inventory and the faster profits
can be generated. We maintain our inventories in a network of distribution centers that are operated as warehouse
facilities and at production facilities. The structural configuration of these storage locations is driven by local
demand. Inventories at all locations are monitored on a daily basis both to optimize inventory flow and to
identify slow moving products. We believe that our longstanding relationship with suppliers and customers and
the acquisition of retail distribution companies provide a sound basis for reliably predicting future requirements.
This makes it possible to achieve rapid inventory turnover of products carried, which in turn results in cost-
efficient warehousing logistics and reduced inventory risks. The payment cycle (the number of days that
merchandise is warehoused plus the number of days until payment is received from the customer, minus the
number of days between delivery by and payment to the producer) currently amounts to approximately 59 days
based on September 30, 2006 figures, and we strive to reduce it further without causing any negative impact on
sales.
52
Result of Operations
2004 2005 2005 2005 2006 2006
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,194.9 976.2 245.3 737.7 1,417.0 356.0
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . 353.4 188.0 47.3 136.9 168.5 42.3
Semi-finished products . . . . . . . . . . . . . . . . . 225.7 237.2 59.6 180.2 220.7 55.5
Finished products . . . . . . . . . . . . . . . . . . . . . 471.2 368.6 92.6 292.4 765.2 192.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144.6 182.4 45.8 128.2 262.7 66.0
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,019.5) (880.7) (221.3) (671.5) (1,228.6) (308.7)
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . (325.0) (177.2) (44.5)
Semi-finished products . . . . . . . . . . . . . . . . . (209.6) (214.1) (53.8)
Finished products . . . . . . . . . . . . . . . . . . . . . (436.7) (358.5) (90.1)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (129.7) (160.1) (40.2)
Intersegment(1) . . . . . . . . . . . . . . . . . . . . . . . . 81.5 29.2 7.3
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.4 95.5 24.0 66.2 188.4 47.3
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . 28.4 10.7 2.7
Semi-finished products . . . . . . . . . . . . . . . . . 16.1 23.2 5.8
Finished products . . . . . . . . . . . . . . . . . . . . . 34.5 10.1 2.5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 22.3 5.6
Intersegment(1) . . . . . . . . . . . . . . . . . . . . . . . . 81.5 29.2 7.3
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 3.5 0.9 1.6 2.7 0.7
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . (22.1) (15.7) (3.9) (10.7) (21.5) (5.4)
Administrative expenses . . . . . . . . . . . . . . . . . . . . (36.9) (40.6) (10.2) (29.7) (52.8) (13.3)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.9) (4.7) (1.2) (2.7) (7.0) (1.7)
Operating profit before financing costs . . . . . . 116.4 38.0 9.5 24.7 109.7 27.6
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . (8.9) (17.0) (4.3) (13.8) (19.9) (5.0)

liabilities acquired over cost . . . . . . . . . . . . . . . 101.0 — — 5.9 1.5
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . 208.5 21.0 5.3 10.9 95.8 24.1
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . (3.7) (4.1) (1.0) (2.1) (18.9) (4.7)
Profit for the period . . . . . . . . . . . . . . . . . . . . . . 204.9 16.9 4.2 8.8 76.9 19.3
(1) Represents margin on intersegment sales.

Key income statement items
Revenue
Revenue consists of sales of products, merchandise and services to third party customers.
Cost of Sales
Cost of revenue consists of direct expenses related to the products, merchandise and services sold.
Gross Profit
For the purposes of the following discussion, gross profit consists of the difference between external
revenue and external cost of sales.
Other income
Other operating income consists of the release of unused provisions, compensation and fines received,
discovered inventory surpluses, indemnities, prescribed payables, returned court fees and net gain on the disposal
of property, plant and equipment.
Distribution expenses
Distribution expenses consist primarily of sales-related transport costs and salaries of sales people.
Administrative expenses
Administrative expenses consist primarily of management salaries (excluding sales persons), depreciation
of non-production buildings and equipment, security and insurance services.
53
Operating profit before financing costs
Operating profit before financing costs consists of gross profit after other operating items, distribution
expenses and administrative expenses.
Net financing costs

Net financing costs consist of interest payable on borrowings calculated using the effective interest rate
method, interest receivable on funds invested, foreign exchange gains and losses and gains and losses on hedging
instruments that are recognized in the income statement.
Income tax expenses

Income tax expenses consist of current year and deferred tax expenses.
Nine Months Ended September 30, 2006 Compared with Nine Months Ended September 30, 2005
Revenue
Group. Consolidated revenue for our Group for the nine months ended September 30, 2006 amounted to
PLN 1,417.0 million (€356.0 million), a 92.1% increase from PLN 737.7 million (€185.4 million) for the nine
months ended September 30, 2005. This increase was primarily due to an increase in the sales volumes in our
finished products segment, as well as to a lesser extent an increase in sales volumes in our scrap metal, semi-
finished products and other segments. In addition, this increase was partly due to an increase in unit prices for
products in all of our segments.
Scrap metal. Revenue in our scrap metal segment for the nine months ended September 30, 2006
amounted to PLN 168.5 million (€42.3 million), a 23.1% increase from PLN 136.9 million (€34.4 million) for the
nine months ended September 30, 2005. This increase was primarily due to an increase in the sales volumes in
our scrap metal segment, as well as to a lesser extent an increase in unit prices of our scrap metal.
Semi-finished products. Revenue in our semi-finished products segment for the nine months ended
September 30, 2006 amounted to PLN 220.7 million (€55.5 million), a 22.5% increase from PLN 180.2 million
(€45.3 million) for the nine months ended September 30, 2005. This increase was primarily due to an increase in
the sales volumes in our semi-finished products segment, as well as to a lesser extent an increase in unit prices of
our semi-finished products.
Finished products. Revenue in our finished products segment for the nine months ended September 30,
2006 amounted to PLN 765.2 million (€192.3 million), a 161.7% increase from PLN 292.4 million
(€73.5 million) for the nine months ended September 30, 2005. This increase was primarily due to an increase in
the sales volumes in our finished products segment, as well as to a lesser extent an increase in unit prices of our
finished products.
Other. Revenue in our other segment for the nine months ended September 30, 2006 amounted to
PLN 262.7 million (€66.0 million), a 104.8% increase from PLN 128.2 million (€32.2 million) for the nine
months ended September 30, 2005. This increase was primarily due to an increase in the sales volumes in our
other segment, as well as to a lesser extent an increase in unit prices of products in our other segment.
Cost of Sales
Group. Consolidated cost of sales for our Group for the nine months ended September 30, 2006
amounted to PLN 1,228.6 million (€308.7 million), a 83.0% increase from PLN 671.5 million (€168.7 million)
for the nine months ended September 30, 2005. This increase was primarily due to an increase in sales volumes
and unit prices of products in all of our segments.
Gross Profit
Group. Consolidated gross profit for our Group for the nine months ended September 30, 2006
amounted to PLN 188.4 million (€47.3 million), a 184.6% increase from PLN 66.2 million (€16.6 million) for the
nine months ended September 30, 2005. Our gross profit margin increased to 13.3% for the nine months ended
September 30, 2006 from 9.0% for the nine months ended September 30, 2005. The primary reason for the
increase was an increase in the sales volumes in our finished products segment, as well as to a lesser extent an
increase in sales volumes in our scrap metal, semi-finished products and other segments. In addition, this
increase was partly due to an increase in unit prices for products in all of our segments.
54
Other income
Other income for the nine months ended September 30, 2006 amounted to PLN 2.7 million (€0.7 million),
a 68.8% increase from PLN 1.6 million (€0.4 million) for the nine months ended September 30, 2005. This
increase was primarily due to the acquisition of HSW-HSJ and the consolidation of the newly acquired
companies in 2006 into the Group.
Distribution expenses for the nine months ended September 30, 2006 amounted to PLN 21.5 million
(€5.4 million), a 100.9% increase from PLN 10.7 million (€2.7 million) for the nine months ended September 30,
2005. This increase was primarily due to the consolidation of the newly acquired companies in 2006 into the
Group.
Administrative expenses for the nine months ended September 30, 2006 amounted to PLN 52.8 million
2005. This increase was primarily due to the consolidation of the newly acquired companies in 2006 into the
Group, especially HSW-HSJ.

Operating profit before financing costs for the nine months ended September 30, 2006 amounted to
PLN 109.7 million (€27.6 million), a 344.1% increase from PLN 24.7 million (€6.2 million) for the nine months
ended September 30, 2005. This increase was primarily due to the consolidation of the newly acquired
companies in 2006 into the Group, especially HSW-HSJ.
Net financing costs

Net financing costs for the nine months ended September 30, 2006 amounted to PLN 19.9 million
2005. This increase was primarily due to an increase in the total net indebtedness of the Group.
Excess of the interest in the net fair value of identifiable assets, liabilities and contingent liabilities acquired
over cost
Excess of the interest in the net fair value of identifiable assets, liabilities and contingent liabilities
acquired over cost for the nine months ended September 30, 2006 amounted to PLN 5.9 million (€1.5 million).
There was no excess of the interest in the net fair value of identifiable assets, liabilities and contingent liabilities
acquired over cost for the nine months ended September 30, 2005. The amount for the nine months ended
September 30, 2006 was primarily due to the acquisition of Centrostal.
Income tax expense

Income tax expense for the nine months ended September 30, 2006 amounted to PLN 18.9 million
(€4.7 million), a 800% increase from PLN 2.1 million (€0.5 million) for the nine months ended September 30,
2005. This increase was primarily due to increased profits in all of our segments.

Profit for the period for the nine months ended September 30, 2006 amounted to PLN 76.9 million
2005. This increase was primarily due to increased profits in all of our segments.
Year Ended December 31, 2005 Compared with Year Ended December 31, 2004
Revenue
Group. Consolidated revenue for our Group for the year ended December 31, 2005 amounted to
PLN 976.2 million (€245.3 million), a 18.3% decrease from PLN 1.2 billion (€301.5 million) for the year ended
December 31, 2004. This decrease was primarily due to a decrease in steel prices, which lead to a decrease in
scrap metal prices, semi-finished product and finished product prices, an economic downturn in the Polish steel
industry, and the consolidation of Ferrostal Łabe˛dy into the Group in 2005 for a full year as compared to 2004
where the first two months of sales to Ferrostal Łabe˛dy were regarded as sales to external customers.
55
Scrap metal. Revenue in our scrap metal segment for the year ended December 31, 2005 amounted to
PLN 188.0 million (€47.3 million), a 46.8% decrease from PLN 353.4 million (€88.8 million) for the year ended
December 31, 2004. This decrease was primarily due to a decrease in scrap metal prices and a 4.8% decrease in
volumes of scrap metal purchased. In addition, because the Company used approximately 123,000 tonnes more
of scrap metal to produce semi-finished products in 2005 than in 2004, this led to a decrease in sales of scrap
metal to external customers by 47% from 2004 to 2005.
Semi-finished products. Revenue in our semi-finished products segment for the year ended
December 31, 2005 amounted to PLN 237.2 million (€59.6 million), a 5.1% increase from PLN 225.7 million
(€56.7 million) for the year ended December 31, 2004. This increase was entirely due to an increase in prices for
semi-finished products.
Finished products. Revenue in our finished products segment for the year ended December 31, 2005
amounted to PLN 368.6 million (€92.6 million), a 21.8% decrease from PLN 471.2 million (€118.4 million) for
the year ended December 31, 2004. This decrease was primarily due to a decrease in prices for finished products
and partly due to an economic downturn in the Polish steel industry, which reduced demand for finished
products.
Other. Revenue in our other segment for the year ended December 31, 2005 amounted to PLN
182.4 million (€45.8 million), a 26.1% increase from PLN 144.6 million (€36.3 million) for the year ended
December 31, 2004. This increase was primarily due to an increase in the sales volumes of other products and
partly due to an increase in the prices of other products.
Cost of sales
Group. Consolidated cost of sales for our Group for the year ended December 31, 2005 amounted to
PLN 880.7 million (€221.3 million), a 11.9% decrease from PLN 1.0 billion (€251.3 million) for the year ended
December 31, 2004. This decrease was primarily due to a decrease in sales volumes and a decrease in steel
prices.
Scrap metal. Cost of sales in our scrap metal segment for the year ended December 31, 2005 amounted
to PLN 177.2 million (€44.5 million), a 45.5% decrease from PLN 325.0 million (€81.7 million) for the year
ended December 31, 2004. This decrease was primarily due to a decrease in sales volumes of scrap metal and a
decrease in scrap metal prices.
Semi-finished products. Cost of sales in our semi-finished products segment for the year ended
(€52.7 million) for the year ended December 31, 2004. This increase was primarily due to an increase in the sales
volumes of semi-finished products.
Finished products. Cost of sales in our finished products segment for the year ended December 31,
2005 amounted to PLN 358.5 million (€90.1 million), a 17.9% decrease from PLN 436.7 million (€109.7
million) for the year ended December 31, 2004. This decrease was primarily due to a decrease in prices of new
materials necessary to produce finished products such as scrap metal, ferro alloys and refractory materials and a
6.6% decrease in sales volumes of finished products.
Other. Cost of sales for our other business for the year ended December 31, 2005 amounted to PLN
December 31, 2004. This increase was primarily due to an increase in the sales volumes of other products.
Gross Profit
Group. Consolidated gross profit for our Group for the year ended December 31, 2005 amounted to
PLN 95.5 million (€24.0 million), a 45.6% decrease from PLN 175.4 million (€44.1 million) for the year ended
December 31, 2004. Our gross profit margin decreased to 9.8% for the year ended December 31, 2005 from
14.7% for the year ended December 31, 2004. The primary reason for the decrease in the gross profit margin was
a decrease in steel prices and the economic downturn in the Polish steel industry.
Scrap metal. Gross profit in our scrap metal segment for the year ended December 31, 2005 amounted
to PLN 10.7 million (€2.7 million), a 62.3% decrease from PLN 28.4 million (€7.1 million) for the year ended
December 31, 2004. Our gross profit margin decreased to 5.7% for the year ended December 31, 2005 from 8.0%
for the year ended December 31, 2004. The primary reason for the decrease in the gross profit margin was the
decrease in the sales volumes of scrap metal and the decrease of scrap metal prices.
56
Semi-finished products. Gross profit in our semi-finished products segment for the year ended
(€4.0 million) for the year ended December 31, 2004. Our gross profit margin increased to 9.8% for the year
ended December 31, 2005 from 7.1% for the year ended December 31, 2004. The primary reason for the increase
in the gross profit margin was the shift towards producing higher grade steel products.
Finished products. Gross profit in our finished products segment for the year ended December 31, 2005
amounted to PLN 10.1 million (€2.5 million), a 70.7% decrease from PLN 34.5 million (€8.7 million) for the
year ended December 31, 2004. Our gross profit margin decreased to 2.7% for the year ended December 31,
2005 from 7.3% for the year ended December 31, 2004. The primary reason for the decrease in the gross profit
margin was the decrease in the price of finished products as a result of excess product inventories in the market
during 2005.
Other. Gross profit in our other segment for the year ended December 31, 2005 amounted to PLN
December 31, 2004. Our gross profit margin increased to 12.2% for the year ended December 31, 2005 from
10.3% for the year ended December 31, 2004. The primary reason for the increase in the gross profit margin was
the increase in sales volumes and an increase in the price of other products.
Other income
Other income for the year ended December 31, 2005 amounted to PLN 3.5 million (€0.9 million), a
25.0% increase from PLN 2.8 million (€0.7 million) for the year ended December 31, 2004.
Distribution expenses for the year ended December 31, 2005 amounted to PLN 15.7 million
(€3.9 million), a 29.0% decrease from PLN 22.1 million (€5.6 million) for the year ended December 31, 2004.
This decrease was primarily due to a decrease in sales volumes of scrap metal and finished products.
Administrative expenses for the year ended December 31, 2005 amounted to PLN 40.6 million
(€10.2 million), a 10.0% increase from PLN 36.9 million (€9.3 million) for the year ended December 31, 2004.
This increase was primarily due to the full consolidation of Ferrostal Łabe˛dy and Szopienice in 2005 as
compared to their partial consolidation in 2004 and increased costs for employee salaries and other related costs.

Operating profit before financing costs for the year ended December 31, 2005 amounted to PLN
38.0 million (€9.5 million), a 67.4% decrease from PLN 116.4 million (€29.2 million) for the year ended
December 31, 2004. This decrease was primarily due to a general decrease in profits in all of our segments,
which was partially offset by increases in profits in the semi-finished product and other segments.
Net financing costs

Net financing costs for the year ended December 31, 2005 amounted to PLN 17.0 million (€4.3 million),
a 91.0% increase from PLN 8.9 million (€2.2 million) for the year ended December 31, 2004. This increase was
primarily due to increased indebtedness of the Company.
over cost
There was no excess of the interest in the net fair value of identifiable assets, liabilities and contingent
liabilities acquired over cost for the year ended December 31, 2005 compared to PLN 101.0 million (€25.4
million) for the year ended December 31, 2004.
Income tax expense

Income tax expense for the year ended December 31, 2005 amounted to PLN 4.1 million (€1.1 million), a
10.8% increase from PLN 3.7 million (€0.9 million) for the year ended December 31, 2004.

Profit for the year ended December 31, 2005 amounted to PLN 16.9 million (€4.2 million), a 91.8%
decrease from PLN 204.9 million (€51.5 million) for the year ended December 31, 2004. This decrease was
primarily due to the fact of the excess of the net fair value of the acquirer’s identifiable assets, liabilities and
contingent liabilities over the cost recognition of PLN 101 million (€25.4 million) in the 2004 audited
consolidated financial statements and the general decrease in gross profits as discussed above.
57
Liquidity and Capital Resources
Historically, our capital requirements have been funded primarily through a combination of cash
generated from operations and borrowings under credit facilities made available by third parties.
Statement of Cash Flows

The following table sets out the principal components of our cash flows for the years ended December 31,
2004 and 2005 for the nine month periods ended September 30, 2005 and 2006.
Nine months ended
Year ended December 31, September 30,
2004 2005 2005 2005 2006 2006
(€ (€
(PLN millions) millions) (PLN millions) millions)
(audited) (unaudited)
Net cash from/(used in) operating activities . . . . . . . . . . . . . . (12.4) 54.6 13.7 30.7 75.9 19.1
Net cash from/(used in) investing activities . . . . . . . . . . . . . . . 6.0 (36.7) (9.2) (28.1) (216.4) (54.4)
Net cash from/(used in) financing activities . . . . . . . . . . . . . . (15.7) (1.3) (0.3) 30.7 141.6 35.6
Net cash from operating activities

Nine months ended September 30, 2006
Net cash from operating activities amounted to PLN 75.9 million (€19.1 million) for the nine months
ended September 30, 2006, a 147.2% increase from PLN 30.7 million (€7.7 million) for the nine months ended
September 30, 2005. Increased profits in all of our segments attributed to this increase in net cash from operating
activities. This was partly offset by higher working capital requirements in 2006 as a result of our new
acquisitions and better market conditions.
Year ended December 31, 2005

Net cash from operating activities amounted to PLN 54.6 million (€13.7 million) for the year ended
December 31, 2005, a PLN 67.0 million (€16.8 million) increase from net cash used in operating activities of
PLN 12.4 million (€3.1 million) for the year ended December 31, 2004. This increase was primarily caused by
lower sales which was reflected in lower working capital requirements in 2005 caused by a general economic
downturn in the Polish steel industry.
Net cash used in investing activities

Net cash used in investing activities amounted to PLN 216.4 million (€54.4 million) for the nine months
ended September 30, 2006, a PLN 188.3 million (€47.3 million) increase from net cash used in investing
activities of PLN 28.1 million (€7.1 million) for the nine months ended September 30, 2005. This increase was
primarily caused by acquisitions of new companies in 2006.

Net cash used in investing activities amounted to PLN 36.7 million (€9.2 million) for the year ended
December 31, 2005, a PLN 42.7 million (€10.7 million) increase from net cash from investing activities of
PLN 6.0 million (€1.5 million) for the year ended December 31, 2004. This increase was primarily caused by the
payment of the purchase price for Ferrostal Łabe˛dy in 2005 and other investments in fixed assets.
Net cash from financing activities

Net cash from financing activities amounted to PLN 141.6 million (€35.6 million) for the nine months
ended September 30, 2006, a 361.2% increase from PLN 30.7 million (€7.7 million) for the nine months ended
September 30, 2005. This increase was primarily due to new loans and increased borrowings in 2006 to finance
acquisitions of new companies, especially HSW-HSJ.

Net cash used in financing activities amounted to PLN 1.3 million (€0.3 million) for the year ended
December 31, 2005, a PLN 14.4 million (€3.6 million) decrease from net cash used in financing activities of PLN
15.7 million (€3.9 million) for the year ended December 31, 2004. This decrease was primarily due to increased
borrowings in 2005.
58
Capital Expenditure
Our business is capital intensive and requires significant capital expenditures, primarily with respect to
property, plant and equipment. The amounts presented below related to additions in property, plant and
equipment other than through business combinations.
In 2004, our total capital expenditure was PLN 28.3 million (€7.1 million). This included PLN 3.9 million
(€1.0 million) for property, PLN 14.3 million (€3.6 million) for equipment and machinery, PLN 8.7 million
(€2.2 million) for vehicles, and PLN 1.4 million (€0.4 million) for other (including assets under construction).
In 2005, our total capital expenditure was PLN 32.5 million (€8.2 million). This included PLN 1.6 million
(€0.4 million) for property, PLN 14.3 million (€3.6 million) for equipment and machinery, PLN 7.7 million
(€1.9 million) for vehicles, and PLN 8.9 million (€2.2 million) for other (including assets under construction).
For the first nine months ended September 30, 2006, our total capital expenditure was PLN 31.9 (€8.0
million). This included PLN 3.9 million (€1.0 million) for property, PLN 24.4 million (€6.1 million) for
equipment and machinery, PLN 2.8 million (€0.7 million) for vehicles, and PLN 3.5 million (€0.9 million) for
other.
Off-balance sheet arrangements

We have not removed any obligations from our balance sheet or created off-balance sheet obligations in
off-balance sheet transactions. There are no other obligations and risks which were not reflected in the
consolidated financial statements or listed in the notes to the consolidated financial statements.
There are no material contingent liabilities.
Future Liquidity, Commitments and Financing Arrangements

Upon consummation of the Offering and the application of the proceeds as described under “Use of
Proceeds”, all of the existing external indebtedness of the Company and its subsidiaries will be repaid (the
“Refinancing”), other than:
Š the Notes;
Š receivables facilities providing for the factoring/securitization of the Company’s and its subsidiaries’
accounts receivable in amounts not to exceed PLN 55.5 million (€13.9 million) at any one time
outstanding, of which approximately PLN 40.1 million (€10.1 million) is outstanding as of
September 30, 2006;
Š under loan agreements with the National Fund in an amount not to exceed PLN 27.7 million
(€7.0 million) at any one time outstanding (amount outstanding as of September 30, 2006);
Š under various leasing agreements in amounts not to exceed PLN 37.6 million (€9.5 million) (the
amount outstanding as of September 30, 2006);
Š indebtedness of the Centrolstal Group of PLN 26.4 million (€6.6 million), of which PLN 21.2 million
(€5.3 million) was outstanding as of September 30, 2006); and
Š indebtedness of Kapitał and the Company under discount promissory note agreements of
PLN 17 million (€4.3 million) and PLN 10 million (€2.5 million), respectively, of which
PLN 8.9 million (€2.2 million) was outstanding as of September 30, 2006.
In addition, upon consummation of the Austrian Acquisition, we expect further external indebtedness of
voestalpine Stahlhandel GmbH in an amount of approximately €10 million.
For a more detailed description of this indebtedness, see “Description of Other Indebtedness” in this
We believe that cash generated from operations, together with proceeds from this Offering, current or
future credit facilities and other financing arrangements, including equity offerings, will be sufficient to meet our
liquidity needs for the foreseeable future. However, our ability to pay interest on the Notes and to satisfy our
other debt obligations depends in part upon our future financial and operating performance and upon our ability
to renew or refinance borrowings or to raise additional equity capital. Prevailing economic conditions and
financial, business and other factors, many of which are beyond our control, will affect our ability to make these
payments. While we believe that cash flow from operations will provide an adequate source of long-term
liquidity, a significant drop in operating cash flow resulting from adverse economic conditions, competition or
59
other uncertainties beyond our control would increase the need for alternative sources of liquidity. If we are
unable to generate sufficient cash flow to meet our debt service obligations, we will have to pursue one or more
alternatives, such as:
Š reducing or delaying capital expenditures;
Š refinancing debt;
Š selling assets; or
Š raising equity capital
We cannot assure you that any of these alternatives could be accomplished on satisfactory terms, if at all,
or that such alternatives would yield sufficient funds for us to meet our obligations under the Notes or our other
senior obligations. We have breached certain financials covenants under certain of our indebtedness in the past,
including, absent a waiver, for the year ended December 31, 2006. We received waivers from lenders relating to
that indebtedness and these lenders, although they had the right to do so, did not accelerate the maturity of this
indebtedness. Any additional breaches of financial covenants in the future under our indebtedness could
materially affect our results of operations and financial condition.
We also consider from time to time raising funds through the issuance, by the Company or one of its
subsidiaries, of equity securities. For example, the Company currently plans to sell its interests in Centrostal
Górnoslaśki and Centrostal Opole to Centrostal (currently and, upon consummation of the sale, a direct
subsidiary of the Company) during the first quarter of 2007. Centrostal is currently conducting a public equity
offering in Poland, the proceeds of which (estimated at approximately PLN 100 million (€25.1 million) will be
used to pay for the purchase of these two companies. The Company will use the proceeds from the sale of these
two companies to increase its ownership in Centrostal. Following the consummation of the public equity
offering, the Company expects to hold approximately 65% of the equity interests in Centrostal. On December 29,
2006, the prospectus for Centrostal’s public equity offering was filed for approval with the Polish Financial
Supervisory Commission. Once approved by the Polish Financial Supervisory Commission, Centrostal can
commence its public equity offering.
In addition, our strategy for growth contemplates that a significant portion of our future growth will be
achieved through acquisitions of related and complementary businesses. We intend to fund acquisitions through a
variety of sources, including by raising additional debt (including additional Notes) or using cash generated
through our operations or through the issuance of equity securities, including a potential initial public offering of
ordinary shares of the Company. The covenants contained in our Revolving Credit Facilities and the Indenture
governing the Notes contain a number of restrictions on our ability to incur additional debt, which could limit our
ability to realize our strategy.
Further, our Share Purchase Agreement and related arrangements in connection with our agreement to
acquire a 74.9% interest in voestalpine Stahlhandel GmbH includes a put/call option with respect to the
remaining 25.1% interest to be exercised not earlier than two years after the closing of the Austrian Acquisition
and not later than December 31, 2010. We anticipate funding the remaining acquisition price through one or
more of the financing alternatives described above.
Quantitative and Qualitative Disclosures about Market Risk

The nature of our business exposes our operations, financial results and cash flow to a number of risks,
including those discussed below. Any of these risks could harm our assets, financial condition and earnings.
Credit risk
Our exposure to credit risks relates primarily to our holdings of cash and cash equivalents and
receivables. We have minimum credit risk with regard to our cash and cash equivalents because we place them in
financial institutions with high credit ratings. Our credit risk related to receivables is also limited because our
customer base is wide and thus the concentration of credit risk is insignificant. In addition, our receivables are
insured by the Austrian insurance company, COFACE, and the German insurance company, Euler Hermes. We
currently do not believe that we have any significant concentration of credit risk exposure.
Foreign currency exchange risk

Our presentation currency is the Polish zloty. Because we generally have a significant amount of revenues
in Euro, fluctuations in the exchange rate between the Polish zloty and the Euro (including the recent
appreciation of the Polish zloty against the Euro) may have a growing impact on our gross profits. We attempt to
manage our exposure to these foreign currency fluctuations through the use of forward exchange contracts.
60
Continuing volatility in the exchange rate between the Polish zloty and the Euro could adversely affect our
Interest rate risk

Currently, we are exposed to market risks for changes in interest rates through a portion of our debt
instruments. Our loans under some of our outstanding credit facilities bear interest at variable rates and changes
in interest rates affect the interest payments on such loans. To hedge against interest rate risks on our bank loans,
we have entered into derivative financial instruments such as interest swap transactions which expire between
2008 and 2010.
Following the Offering and the application of the proceeds as described herein, our interest rate risk will
decline as we will have less exposure to floating rate interest debt.
Critical accounting policies

The presentation and analysis of the results of operations, financial position and net assets of the
Company are based on the consolidated financial statements of the Company for the years ended December 31,
2004 and 2005 and the interim condensed consolidated financial statements of the Company for the nine-month
period ended September 30, 2006. The underlying financial statements were prepared in accordance with IFRS.
The preparation of financial statements in conformity with IFRS requires that the Management Board of
the Company makes judgments, estimates and assumptions that affect the application of policies and reported
amounts of assets, equity and liabilities, income and expenses with respect to the Group. The estimates and
associated assumptions are based on historical experience and other factors that are believed to be reasonable
under the circumstances and the results of which form a basis for professional judgment on carrying values of
assets and liabilities that are not readily apparent from other sources. The actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision affects both current and future periods.
The accounting methods and policies presented below required estimates and assumptions by the
management due to the inherently uncertain nature of the facts involved and for which changes in the underlying
facts may significantly affect the results shown in the consolidated financial statements.
Further information is provided in the notes to the consolidated financial statements appearing in the
Financial Section of this Offering Memorandum.
Property, plant and equipment

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation
and impairment losses. The cost includes the purchase price of the assets (i.e. the amount due to a seller less
deductible VAT and excise tax), taxes and charges (in case of import) and costs directly related to the purchase
and completion of the asset, so that it can be available for use, including the transport, loading, unloading and
storing costs. Rebates, discounts and other similar reductions decrease the cost. The construction cost of
property, plant and equipment or assets under construction includes total cost incurred by the entity in the period
of their construction, assembly, adjustment and modernization till the date of their transfer to use (or up to the
balance sheet date, if the asset was not transferred to use before this date), including non-deductible VAT and
excise tax. The construction cost also includes preliminary estimates of the cost of dismantling and removing the
components of tangible fixed assets and the restoration cost.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
The Group recognizes in the carrying amount of an item of property, plant and equipment, the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic benefits
embodied with the item will flow to the Group and the cost can be measured reliably. All other expenditures are
recognized in the income statement as an expense as incurred.
61
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of
each component of property, plant and equipment, considering residual values. The useful life of an asset
depends on various factors, including legal, regulatory, structural, economic and other considerations. The effect
of these factors on the useful life of an asset is uncertain and requires management to estimate the period over
which an asset is to be depreciated. Land is not depreciated.
Property, plant and equipment that meet the criteria of finance leases are capitalized in the financial
statements of the lessee at the lower of fair value or the minimum lease payments. The corresponding payment
obligations in connection with future lease payments are carried as liabilities.
Goodwill
All business combinations, excluding the businesses which are under common control, are accounted for
by applying the purchase method. In respect of business acquisitions that have occurred after 1 January 2004,
goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable
assets acquired.
In respect of acquisitions prior to this date, goodwill represents the amount recorded under previous
GAAP. The classification and accounting treatment of business combinations that occurred prior to 1 January
2004 has not been reconsidered in preparing the Group’s opening IFRS balance sheet at 1 January 2004.
Subsequent to initial recognition, goodwill is stated at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units and is not amortized but is tested annually for impairment. In
respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the
associate.
The excess of the interest in the net fair value of identifiable assets, liabilities and contingent liabilities
over cost arising on an acquisition is recognized directly in the income statement.
Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs of completion and selling expenses.
The cost of inventories is determined based on the first in, first out principle. The costs include
expenditure incurred in acquiring the inventories. In the case of finished goods and work in progress, costs
include an appropriate share of overheads based on normal operating capacity.
Trade and other receivables

Trade and other receivables are non-derivative financial assets and financial assets not quoted in an active
market with fixed or determinable payments. They are initially recognized at fair value and are subsequently
measured at amortized cost less impairment losses.
Impairment
The carrying amount of the Group’s assets, other than inventories and deferred tax assets is reviewed at
each balance sheet date to determine whether there is any indication of impairment. If any such indication exists,
the assets recoverable amount is estimated.
For goodwill and intangible assets that have an indefinite useful life and intangible assets that are not yet
available for use, the recoverable amount is estimated at each balance sheet date.
An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount.
Impairment losses recognized in respect of a cash-generating unit (or a group of units) are allocated first
to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or a group of units) and
then, to reduce the carrying amount of the other assets in the unit (or a group of units) on a pro rata basis.
Impairment losses are recognized in the income statement.
62
When a decline in the fair value of an available-for-sale financial asset has been recognized directly in
equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized
directly in equity is recognized in the income statement even though the financial asset has not been
derecognized. The amount of the cumulative loss that is recognized in the income statement is the difference
between the acquisition cost and current fair value, less any impairment loss on that financial asset previously
recognized in the income statement.
Calculation of recoverable amount

The recoverable amount of the Group’s investments in held to maturity securities and receivables carried
at amortized cost is calculated as the present value of estimated future cash flows, discounted at the original
effective interest rate. Short-term receivables are not discounted.
The recoverable amount of other assets is the greater of their net selling price and value in use. In
assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For an asset which does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
Reversal of impairment
An impairment loss in respect of a held-to-maturity security or receivable carried at amortized cost is
reversed through the income statement if the subsequent increase in recoverable amount can be related
objectively to an event occurring after the impairment loss was recognized.
An impairment loss in respect of an investment in an equity instrument classified as available for sale is
not reversed. If the fair value of a debt instrument classified as available-for-sale increases and the increase can
be objectively related to an event occurring after the impairment loss was recognized in the income statement, the
impairment loss shall be reversed, with the amount of the reversal recognized in the income statement.
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had
been recognized.
Employee benefits
Defined benefits plan — retirement awards
The Group recognises provisions for retirement and pension benefits (employee benefits) based on the
actuarial valuation as at the balance sheet date prepared by an independent actuary. The basis for the calculation
of the provisions for the employee benefits is set by the Group’s internal regulations, the Collective Labour
Agreement for the Group’s employees and the legal regulations in force.
Provisions for employee benefits are determined with the use of actuary techniques and assumptions in
conformity with the requirements of IFRS and in particular IAS 19 ‘Employee Benefits’. Provisions are
measured on the basis of the present value of the Group’s future obligations with regard to employee benefits.
Provisions are calculated using an individual method, separately for each employee. The basis for the calculation
of the provision for an employee is the projected amount of the benefit that the Group commits to pay pursuant to
the regulations described above. The projected amount of the benefit is calculated till it is vested with an
employee, considering the projected amount of the basis of the benefit, projected increase in the benefit and the
length of service of a given employee. The calculated amount is discounted actuarially to the balance sheet date.
Trade and other payables

Trade and other payables are stated at cost. Current liabilities are not discounted.
63
Revenue
Goods sold and services rendered
Revenue from the sale of goods is recognized in the income statement when the significant risks and
rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognized in the
income statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage
of completion is assessed by reference to surveys of work performed. No revenue is recognized if there are
significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of
goods, or continuing management involvement with the goods.
Rental income
Rental income from investment property is recognised in the income statement on a straight-line basis
over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income.
Costs
Research and development costs
Research and development costs are recognized in the income statement as incurred. Development costs
are recognized as intangible assets when the criteria set out in IAS 38 “Intangible assets” are met and when it is
probable that the future economic benefits will flow to the Group.
Operating lease payments

Payments made under operating leases are recognized in the income statement on a straight-line basis
over the term of the lease. Lease incentives received are recognized in the income statement as an integral part of
the total lease expense.
Finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
Net financing costs and revenues

Net financing costs comprise interest payable on borrowings calculated using the effective interest rate
method, interest receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and
losses on hedging instruments that are recognized in the income statement.
Interest income is recognized in the income statement as it accrues, using the effective interest method.
Dividend income is recognized in the income statement on the date the entity’s right to receive payments is
established. The interest expense component of finance lease payments is recognized in the income statement
using the effective interest rate method.
Financial instruments
Financial instruments are classified in the following categories: held-to-maturity financial assets,
financial assets measured at fair value through the income statement, available-for-sale financial assets, loans and
receivables. Management determines the classification of its investments at initial recognition and re-evaluates
this classification at each reporting date. Acquisition and sale of financial assets is recognized at the transaction
date. Financial assets are recognized initially at fair value, including transaction costs.
Held-to-maturity financial assets

Held-to-maturity financial assets include assets with fixed or determinable payments and fixed maturities
that the Group has the positive intention and ability to hold to maturity. These are valued at amortized cost
calculated using the effective interest rate method.
Assets in this category are recognized as non-current assets, if the realization date exceeds 12 months
from the balance sheet date.
64
Financial assets measured at fair value through income statement
Financial assets acquired for the purpose of generating a profit from short-term price fluctuations are
classified as financial assets measured at fair value through income statement.
They are valued at fair value, without transaction costs, and considering the market value as at balance
sheets date.
Changes in fair value are recognized in the income statement.
Assets in this category are classified as current assets, if the management of the Group has the positive
intention to realize them within 12 months of the balance sheet date.
Available-for-sale financial assets

All other financial assets that are not loans or receivables are classified as available-for-sale financial
assets.
Available-for-sale financial assets are valued at fair value without transaction costs, considering the
market value as at balance sheet date. If the financial assets are not listed on a stock exchange and if there are no
alternative ways to verify their fair value, available-for-sale financial assets are valued at costs less any
impairment loss.
Gains or losses, except for impairment losses, calculated as the difference between the fair value and the
cost, net of deferred tax, if there is a market price established by the regulated market or for which the fair value
may be established in a reliable way, are recognized directly in equity. A decline in the value of the available-for-
sale financial assets resulting from impairment loss is recognized in the income statement account as a financial
cost.
Loans and receivables

Loans and receivables are valued amortized cost.
Summary of Significant Differences between IFRS and US GAAP

There are significant differences between IFRS and US GAAP. The consolidated financial statements
contained herein differ from those that would be prepared had any of the consolidated financial statements
presented in this Offering Memorandum been prepared based upon US GAAP. There can be no assurance that a
presentation of financial statements under US GAAP or a reconciliation to US GAAP would not identify material
quantitative differences as well as disclosures and presentation differences between our consolidated financial
statements as prepared in accordance with IFRS and such financial statements as prepared on the basis of US
GAAP. Potential investors should consult their own professional advisors for an understanding of the differences
between US GAAP and IFRS, and how those differences might affect the available financial information.
Business Combinations
over cost
Under US GAAP, any excess of the interest in the net fair value of identifiable assets, liabilities and
contingent liabilities acquired over cost has to be allocated on a pro-rata basis to all acquired assets other than all
current assets, all financial assets (other than equity investments), assets to be disposed of by sale, prepaid assets
relating to pensions, and deferred taxes. Any remaining excess of the interest in the net fair of identifiable assets,
liabilities and contingent liabilities acquired over cost is recognized as an extraordinary gain in the income
statement.
Under IFRS, when the purchase price allocation results in excess of the interest in the net fair value of
identifiable assets, liabilities and contingent liabilities acquired over cost, the acquirer must reassess the
identification and measurement of the acquired assets, liabilities and contingent liabilities. Any excess that
remains is recognized immediately in the income statement.
Contingent Liabilities
Both under US GAAP and IFRS contingent liabilities are included in the allocation of the purchase price,
however in US GAAP they should be probable and measurable, while IFRS only has the measurable criteria.
65
Minority Interest
Under US GAAP, minority interest is generally measured as the minority’s proportion of the pre-
acquisition historical book value of the identifiable net assets acquired. Under IFRS, minority interest is
measured as the minority’s proportion of the net fair value of the identifiable net assets acquired.
Under US GAAP, minority interest is presented separately in the financial statements. Under IFRS,
minority interest is presented as a component of equity.
Step Acquisitions
Under US GAAP, revaluation of previous interests in the acquirer’s net assets in step acquisitions is not
allowed.
Under IFRS, the revaluation of previous interests at fair value at each acquisition date is required.
Impairment Test
Both under US GAAP and IFRS, goodwill is reviewed for impairment, at least annually or whenever
events or changes in circumstances indicate that the recoverability of the carrying amount must be assessed.
Under US GAAP, an impairment test is two-tier. And an impairment test using discounted cash flows is
performed, only if the asset fails a recoverability test performed on the basis of undiscounted cash flows. An
impairment loss is calculated by comparing the asset’s carrying amount to its fair value.
Under IFRS, if an indicator for impairment is identified, an impairment test is performed using
discounted cash flows. Therefore, an impairment loss could be recognized earlier under IFRS.
Under US GAAP, reversal of impairment is not allowed.
Under IFRS, impairment losses may reverse, due to changed circumstances, except for an impairment
loss for goodwill.
Consolidation
Subsidiaries
Under US GAAP, the usual condition for consolidating a financial interest is ownership of a majority
voting interest and as a general rule, ownership, either directly or indirectly, of over 50% of the outstanding
voting shares constitutes control.
Under IFRS, consolidation of subsidiaries is required over which a parent company exercises control.
Control is considered as being exercised in cases where a parent is in a position to manage the subsidiary’s
financial and operating policies with a view to benefiting from its business.
Special Purpose Entities

Under US GAAP, certain variable interest entities are to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do
not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial
support from other parties.
Under IFRS, consolidation of special purpose entities (SPEs) is required where the substance of the
relationship indicates that an entity controls the SPE.
Income Taxes
Although the general approach under US GAAP and IFRS is similar, there are a number of differences.
Differences amongst others relate to deferred tax on goodwill, deferred tax on investments in subsidiaries, post
acquisition recognition of acquiree’s tax losses and recognition of previously unrecognized tax losses.
Under US GAAP, the use of substantively enacted tax rates is prohibited.
Under IFRS, deferred tax is calculated using the tax rates and tax laws that have been enacted or
substantively enacted.
66
Inventories
Under US GAAP, when the cost of inventories is no longer recoverable, inventories are to be written
down to their current replacement cost, which should not exceed their net realizable value.
Under IFRS, inventories should be written down to their net realizable value, which is the estimated
selling price in the ordinary course of business less the costs of completion and sales costs.
Under US GAAP, an impairment loss may not be reversed once it has been recognized.
Under IFRS, the reversal of a previous impairment of inventory if it is no longer appropriate is required.
Under US GAAP, the LIFO (last in-first out) method is permitted, whereas under IFRS it is prohibited.
Financial Instruments
Classification and Measurement
Under US GAAP and IFRS, provisions on classification and measurement of financial instruments are
similar, except that under US GAAP there is no option to designate any financial asset on initial recognition as at
fair value through the income statement: only items that qualify as trading would be classified as at fair value
through the income statement. Under US GAAP, debt securities must be classified according to management’s
intent to hold the security in one of the following categories: trading, held-to-maturity, or available-for-sale.
Equity securities are classified as either trading or available for sale.
Under IFRS, measurement of financial assets depends on their classification in one of the following
categories: held-to-maturity investments; loans and receivables; financial assets at fair value through the income
statement and available-for-sale financial assets.
Hybrid Financing
Under US GAAP, an issuer is required to classify a financial instrument that is within its scope as a
liability (or asset in some circumstances) when the financial instrument embodies an obligation of the issuer.
Under IFRS, an instrument is classified as equity when it does not contain an obligation to transfer
economic resources. An entity recognizes separately the components of a financial instrument that (a) creates a
financial liability of the entity and (b) grants an option to the holder of the instrument to convert it into an equity
instrument of the entity.
Derivatives and Hedging
US GAAP and IFRS guidelines for hedging activities are generally similar. Both require that derivatives
be initially recorded at fair value on the balance sheet as either financial assets or liabilities. Both also require
that derivatives be subsequently measured at fair value regardless of any hedging relationship that might exist.
US GAAP and IFRS permit special accounting treatment for financial and derivative instruments that are
designated as hedged items or as hedging instruments if certain criteria are met (hedge accounting). However,
there are differences between the standards as to which transactions will qualify for hedge accounting and as to
how some of the hedge accounting provisions are applied.
US GAAP allows, assuming stringent conditions are met, a short-cut method that assumes perfect
effectiveness for certain hedging relationships involving interest rate swaps. This exemption from performing
quantitative retrospective effectiveness tests is not allowed under IFRS.
Intangible Assets
Under US GAAP, general research and development costs that are not covered by separate standards are
expensed as they are incurred.
Under IFRS, the costs of research must be expensed as they are incurred. When the technical and
economic feasibility of a project can be demonstrated, and further prescribed conditions are satisfied, the costs of
the development of the project must be capitalized.
Provisions
Asset Retirement Obligations
Under US GAAP, the provision is built up in cash flow layers with each layer discounted using the
discount rate at the date that the layer was created. Re-measurement of the entire obligation using current
discount rates is not permitted.
Under IFRS, if there is a change in the discount rate the entire provision must be recalculated using the
current discount rate.
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INDUSTRY OVERVIEW
The following information includes extracts from publicly available information, data and statistics and
has been extracted from official sources and other sources the Company and the Guarantors believe to be
reliable. Each of the Issuer and the Guarantors accepts responsibility for accurately reproducing such
information, data and statistics and as far as each of the Issuer and the Guarantor is aware no facts have been
omitted which would render such information misleading, but each of the Issuer and the Guarantors accepts no
further responsibility in respect of such information, data and statistics. Such information, data and statistics
may be approximations or use rounded numbers.
Steel Industry
Global Overview
Steel is one of the most important, multi-functional and adaptable materials in use today, and is generally
considered to be a backbone of industrial development. Steel is highly versatile, as it is hot and cold formable,
weldable, hard and recyclable. The industries in which steel is used include construction, transportation
(including railways) and engineering. Steel is also used in the production of power lines, pipelines, white goods
and containers.
The steel industry is affected by a combination of factors, including periods of economic growth or
recession, worldwide production capacity and the existence of, and fluctuations in, steel imports and protective
trade measures. Steel prices respond to supply and demand and fluctuate in response to general and industry-
specific economic conditions. Globally, steel prices have increased significantly since the end of 2003 despite
short-term fluctuations in Europe, including Poland, reflecting strong demand, particularly in China.
The steel industry operates predominantly on a regional basis as a result of the high cost of transporting
steel. For example, the top five producers in each of the EU and Asia control more than 65% of their respective
regional markets. However, despite the limitations associated with transportation costs, as well as the restrictive
effects of protective tariffs, duties and quotas, global imports and exports have generally increased in the last
decade as production has shifted towards low-cost production regions such as China, Brazil and Southeast Asia.
For the first six months of 2006, China was the largest single producer of steel in the world, producing
approximately 198.8 million tonnes of crude steel, or 33.5% of world steel production, as well as the largest
consumer of steel, consuming 176.5 million tonnes of finished steel. World steel production in 2005 increased by
6.6% from 2004, to 1,139 million tonnes and reached 593.8 million tonnes in the first half of 2006, an 8.2%
increase compared to the same period in 2005, according to the International Iron and Steel Institute (the “IISI”).
The following graph sets forth crude steel production data for 1999 through 2005:
World crude steel production
1999 2000 2001 2002 2003 2004 2005
(million metric tonnes of crude steel)
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 210 205 208 214 226 220

CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 98 100 101 106 113 113
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 102 90 92 94 100 95
North America (excluding US) . . . . . . . . . . . . . . . . . . . . 33 34 30 31 32 34 33
Central and South America . . . . . . . . . . . . . . . . . . . . . . . 35 39 37 41 43 46 45
Middle East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . 23 25 27 28 30 31 33
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 127 151 182 222 280 356
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 106 103 108 111 113 112
Asia and Oceania (excluding China and Japan) . . . . . . . . 100 106 108 113 118 125 131
World total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789 848 850 904 970 1,069 1,139
Annual change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5% 7.4% 0.3% 6.3% 7.3% 10.2% 6.6%
Source: IISI
While production in Europe, Japan and the United States remains significant, steel producers in those
regions have increasingly focused on rolling of semi-finished products as developed markets are currently seeing
a shift in demand from “commodity steel” to “high value added steel”. The term “commodity steel” refers to low
grade steel used primarily for construction. The largest commodity steel producers have emerged in Asia as the
majority of the consumption of commodity steel is in this region as well as in other emerging markets. The term
“high value-added steel” refers to high-grade steel with improved strength and durability and used primarily by
the automotive, aerospace and railway industries. Prices and margins tend to be higher for high value-added steel
than for commodity steel.
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Steel consumption has historically been focused in the EU, Japan and the United States. However, in
recent years, steel consumption in emerging markets, and in particular China, has increased significantly due to
the economic modernization processes which are taking place in these regions. Major drivers are large
infrastructure projects, the auto industry, investments and shipbuilding.
The following table sets forth estimated crude steel consumption data for 1999 through 2005.
World crude steel consumption
1999 2000 2001 2002 2003 2004 2005
(million metric tonnes of crude steel)
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 203 199 196 203 216 210

CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 39 42 39 47 50 51
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 133 114 118 106 124 113
North America (excluding US) . . . . . . . . . . . . . . . . . . . . 39 43 39 40 40 44 43
Central and South America . . . . . . . . . . . . . . . . . . . . . . . 26 30 31 29 29 34 34
Middle East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . 34 38 44 49 54 57 63
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 138 171 206 259 297 350
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 80 75 74 76 81 83
Asia and Oceania (excluding China and Japan) . . . . . . . . 131 140 140 154 158 171 177
World total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785 845 855 905 972 1,073 1,126
Annual change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 7.6% 1.2% 5.8% 7.4% 10.4% 4.9%
Source: IISI
Despite producing significant quantities of steel, the United States is a net importer of steel, while Japan,
Russia and currently China are net exporters of steel. The major traded steel products worldwide include semi-
finished products, hot and cold-rolled sheets and coils, steel tubes and fittings, galvanized sheet, wire rod and
angles and sections.
The strategy and product mix of steel producers generally varies between producers in industrial countries
and producers in emerging markets. Historically, commodity steel producers in industrialized countries had
limited export markets due to the high cost of transporting steel relative to the low value of commodity steel
grades. In the second half of the twentieth century, producers in emerging markets began to compete with steel
producers in industrialized countries as they took advantage of the lower manufacturing costs in their countries to
offset high transportation costs. In response, producers in Western Europe and Japan invested heavily in new
technology and capacity to produce high value-added steel grades in order to differentiate their product portfolio
and protect their margins by reducing their exposure to commodity steel prices. However, these similar and
simultaneous investments resulted in production overcapacity and put pricing pressures on value-added
segments. At the same time, the growth and consolidation of both steel consumers and raw material suppliers has
weakened the bargaining power of steel producers and put further pressure on margins. Steel producers have
responded with a phase of industry consolidation. In 2002, Usinor, Arbed and Aceralia in Europe merged to form
Arcelor, and Kawasaki Steel and NKK in Japan merged to form JFE. In 2002, Nucor acquired the assets of
Birmingham Steel. International Steel Group (“ISG”) also acquired the assets of Acme, LTV and Bethlehem
Steel in the United States. In late 2004, Ispat International N.V. and LNM Holdings N.V., which comprised the
LNM Group, merged to form Mittal Steel and in early 2005 Mittal Steel merged with ISG, forming the world’s
largest steel company.
In November 2005 Arcelor made a bid for Dofasco, which was challenged by ThyssenKrupp. Arcelor
emerged as the winner of the auction and acquired Dofasco in early 2006. During the same period, Mittal Steel
extended an offer for Arcelor, which was rejected by the Board of Arcelor several times before both companies
agreed on the terms of a merger that took place in mid-2006. This move created Arcelor Mittal, the world’s
largest steel player and the first steel producer with production capacity exceeding 100 million tonnes per year
(approximately 10% of current global steel production). In a continuing wave of consolidation in October 2006,
Tata Steel and Corus announced a recommended acquisition of Corus. Tata Steel increased its offer by
approximately 10% in early December facing a potential competing bid from the Brazilian CSN. Its offer was
challenged shortly thereafter by a higher bid from CSN. The takeover battle is expected to be resolved in the first
quarter of 2007.
Consolidation has enabled steel companies to lower their production costs and allowed for more stringent
supply-side discipline, including through selective capacity closures. In 1999, the top five steel producers
accounted for 14.9% of world steel production. Their share has increased to 19.9% in 2005. However, despite the
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recent consolidation, the global steel market remains highly fragmented. In 2005, the 20 largest steel producers
accounted for approximately 39.4% of total global steel production, which is a relatively low percentage as
compared to other industries such as iron ore and automobile manufacturing where the top five producers hold
88.3% and 63.4%, respectively.
Overview of the Production Process

There are two primary production methods used in the steel industry: Mini mills (electric arc furnace) and
integrated (oxygen blast furnace). The following is a brief summary of these processes.
Oxygen & Electric Arc Furnace Steel-Making
Source: UK Steel Association

At an integrated facility, crude steel produced is roughly 20% scrap and 80% pig iron. A tonne of pig iron
is manufactured from approximately 1.5 tonnes of iron ore, which is a mix of fine, lump and pellets and 0.8
tonnes of metallurgical or coking coal. These are processed through stages that may include a coke battery, a
blast furnace (output is pig iron) and an oxygen blast furnace (output is liquid steel) – making for a capital-
intensive operation. These materials represent the largest percentage of total costs at 45%, followed by labor at
nearly 30%. An integrated facility can self-generate a meaningful amount of its energy requirement, therefore
reducing some of its exposure to higher energy costs.
The alternative model is mini-mills, which use an electric arc furnace and instead use scrap as their
primary raw material. Electric arc furnaces produce steel by applying heat generated by electricity arcing
between graphite electrodes and a metal bath to melt primarily scrap steel. The technology has also been around
for decades, but its percentage of overall steel production has increased during recent decades. Its growth has
been fueled by lower upfront capital/fixed costs and lower raw material costs. These operations tend to be much
smaller with production of a few hundred thousand tonnes per year, and are heavy users of externally supplied
energy. Historically, these producers have mainly competed within the long products market.
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Finished products generally fit in one of two categories, flat or long products, with flats accounting for
slightly more than 50% of the global industry.
Š Flat products include: (1) plates which can range in thickness from 0.5-8 inches and are used in
various applications such as construction and shipbuilding; and (2) flat rolled products which are
thinner than 0.5 inches are used in consumer goods such as appliances, external automotive panels and
food containers/cans.
Intermediate Product Casting Flat products from Slab
Source: American Iron and Steel Institute Source: American Iron and Steel Institute
Š Long products include wire rod, reinforced bar (rebar), merchant bar and structural/beam products
with end-markets including transportation (rails) and construction (framing support and roadways).
Long products from Billets Long products from Blooms
Source: American Iron and Steel Institute Source: American Iron and Steel Institute
The Polish Steel Industry
Poland is the largest steel producer among the EU 2004 accession countries with crude steel production of
8.4 million tonnes in 2005. Following the strong production cycle in 2004 in which crude steel production
increased by 16.5% over 2003, the Polish steel industry experienced a substantial decline in production of crude
steel in 2005 driven by an overall economic downturn and high imports, largely as a result of a strong zloty and
major maintenance work in Mittal Steel Poland (now Arcelor Mittal). Poland produced 6.2 million tonnes of
rolled products in 2005, operating at approximately 85% of installed capacity. In 2005, 37% of all rolled products
were flat products and 63% were long products.
The business and financial performance of the steel sector in 2005 was good, yet after a record-breaking
2004, the returns reported in 2005 were low in comparison. After-tax profits were more than 5 times lower than
those reported in 2004. This was to some extent mitigated by lower operating costs and margins remained
positive.
Overall, Poland is a net importer of steel products, mainly exporting low grade semi-finished products
and importing high grade finished products such as coils, sheets and tubes. In 2005, steel exports from Poland
were 3.9 million tonnes and steel imports were 4.8 million tonnes. Poland is generally considered to be among
the lowest-cost steel-producing regions, largely due to relatively low labor and energy costs. Polish steel
producers tend to focus on vertical integration, which ensures that they have access to a stable supply of certain
raw materials, particularly coking coal, iron ore and scrap. The share of open-hearth furnaces in total steel
production in Poland decreased from 2.0% in 2001 to 0% in 2005, and the share of electric arc furnaces increased
from 31.9% to 40.9% during the same period.
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Steel Producers
In Poland, there is a high concentration of the steel industry with the top four companies accounting for
almost 90% of total steel production of which less than 5% is sold as semi-finished products. The following table
provides information on the domestic sales of semi-finished products to third parties in Poland by producer in
2005 and each producer’s main product type:
Semi-
Finished
Products
sold to third Market Main product
Parties share type
(thousand
tonnes) (%)
Mittal Steel Poland (now Arcelor Mittal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 62 semi-finished
Złomrex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 28 semi-finished
CMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5 semi-finished
Celsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5 semi-finished
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 100
Source: Company estimates
The following is an overview of our principal Polish competitors.

Mittal Steel Poland (now Arcelor Mittal). Mittal Steel Poland (now Arcelor Mittal) is the largest
integrated steelmaker in Poland with an annual crude steel production capacity of 6.5 million tonnes and an
approximately 65% market share in the Polish steel market. Headquartered in Katowice, Mittal Steel Poland
(now Arcelor Mittal) consists of four plants located in Da̧browa, Kraków, Sosnowiec and Swiȩtochłowice. The
company manufactures both flat and long products for industries such as construction, automotive, household
appliances, transportation, mining and steel constructions. There is a wide range of products, including railway
and tram rails, sections, rolled products, construction mats, various types of wire, strip, hot rolled and cold rolled
sheets, mining sections and sheet piles. In 2005, Mittal Steel Poland (now Arcelor Mittal) was a primary exporter
of steel to markets in Europe, Latin America, and the Middle East and the Americas.
Celsa. Celsa produces primarily rebars, plain bars, flat bars, hexagonals, angles and forged products for
ship building and machine industries. They use electronic arc furnace technology, producing about one million
tonnes of steel per year. Celsa’s primary steel production plant is located in Ostrowiec Swiȩtokrzyski. Celsa
obtains significant quantities of its raw materials from affiliated entities. The majority of Celsa’s products are
sold in Poland.
CMC. CMC produces primarily billets wire rods and different types of bars, including rebars. CMC’s
production facilities are located in Zawiercie. They use electronic arc furnace technology, producing about one
million tonnes of steel per year. In 2005, CMC exported primarily to Germany and the United States.
Huta Czȩstochowa. Huta Czȩstochowa produces flat products only. It has a production capacity of
approximately 700,000 tonnes of steel per year.
Huta Warszawa. Huta Warszawa produces primary quality long products. It has a production capacity
of approximately 500,000 tonnes of steel per year, primarily for the forging, automotive and machine industries.
Polish market
Import market
Polish steel production decreased from 2004 to 2005 as a result a major renovation of one of Mittal
Steel’s Polish production facilities of the general economic decline during this period and the consequent reduced
demand from the primary steel product consumers, the construction, machine and tube rolling industries as well
as the appreciation of the zloty. Consumption of rolled steel products in Poland has increased since 2001 to 8.1
million tonnes in 2005. The key reasons behind the growth in consumption are the general economic growth, EU
accession and the increased demand from the construction and machine building industries.
Imported steel comprised only 52.2% of total steel consumed in 2005, the highest figure ever registered
according to the Polish Steel Association. Poland is a net importer of steel products, with imports consisting
primarily of high value-added steel products such as coils, sheets and tubes.
Export market
Europe, Latin America and the Middle East are the primary export destinations for Poland steel
producers. Germany is the largest steel importer of Polish steel products. In 2005, Polish producers exported
3.9 million tonnes of rolled products, of which semi-finished products accounted for 32.4%, long products for
49.4% and flat products for 13.4%. Accession of Poland in 2004 to the EU has also improved export market
opportunities.
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BUSINESS
Overview
We are the largest supplier of scrap metal, the second largest seller of semi-finished steel products, and
the fifth largest seller of finished steel products in Poland based on volume. Our operations are fully integrated
and span the entire steel production process, including one of the largest retail distribution networks in Poland
and, upon the closing of our anticipated acquisition of voestalpine Stahlhandel GmbH, the leading warehousing
and steel distribution company in Austria with significant operations in Central and Eastern Europe. Our business
is divided into four segments, which include:
products to external customers in 2005, of which 138,000 tonnes were sold in the Polish market, and
external customers in 2005, substantially all of which were sold in the Polish market, and we had a
2005, and approximately 5% in 2006 as a result of recent acquisitions; and
Our strong position in the scrap metal and semi-finished products segments enables us to reduce margin
Founded in 1990, we have rapidly transformed ourselves from a scrap metal trading company into a fully
integrated steel producer through internal growth and acquisitions. Through a number of acquisitions over the
past few years, we have increased our production capacity and increased the range of production of our semi-
finished and finished products. We believe that our increased production of high grade semi-finished and finished
steel products, coupled with our ability to produce small batches of both of these products tailor made to our
customers’ needs, have given us a competitive advantage over larger steel producers in Poland such as Mittal
Steel Poland (now Arcelor Mittal) whose production facilities produce large quantities of lower grade steel. We
have complemented our production capabilities with a retail distribution network in Poland for our finished
products through separate acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole in 2006,
becoming one of the largest retail distribution networks in Poland. On December 20, 2006, we entered into a
share purchase agreement to acquire a 74.9% interest voestalpine Stahlhandel GmbH, the leading warehousing
and steel distribution company in Austria in terms of revenue and volume with significant operations in Central
and Eastern Europe with an option to acquire a further 25.1% interest (the “Share Purchase Agreement”) (the
“Austrian Acquisition”). We believe that the Austrian Acquisition will enable us to secure demand from end
customers for our finished products, achieve economies of scale in our finished products’ segment by enabling us
to reach our end customers and build an international retail distribution network to expand our geographic reach.
We also believe that through the Austrian Acquisition our retail distribution network business will become one of
the most important factors driving growth in our overall business in the future.
Despite an unexpected sharp decrease in steel prices and a general market downturn in the Polish steel
industry in 2005 which caused our revenues to decline, we have generally increased our revenues over the last
three years. Our total consolidated revenues for the year ended December 31, 2005 amounted to approximately
PLN 976.2 million (€245.3 million), compared to approximately PLN 1,194.9 million (€300.2 million) for the
year ended December 31, 2004. Our total consolidated revenues for the nine months ended September 30, 2006
amounted to PLN 1,417.0 million (€356.0 million), compared to PLN 737.7 million (€185.4 million) for the nine
months ended September 30, 2005. On a pro forma basis giving effect to the Transactions, we had total
consolidated revenues of PLN 2,404.2 million (€604.1 million) for the nine months ended September 30, 2006.
and PLN 2,599.8 million (€653.2 million) for the year ended December 31, 2005.
History
We were formed as a sole proprietorship under the corporate name Przedsiȩbiorstwo Obrotu Surowcami
Wtornymi “Złomrex” by Przemysław Sztuczkowski in 1990, primarily as a company trading in non-ferrous scrap
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metal. We began to trade steel scrap in 1994, steel products in 1996, and we began to process our own materials
in 1997. In 2001 we began producing steel products after purchasing the assets of ZW-WB’s rolling mill
operations in Zawiercie. ZW-WB continued to operate the rolling mill based on a cooperation agreement with us.
In 1998, Mr. Przemyslaw Sztuczkowski purchased all of the shares in Korba Sp. z o.o (“Korba”). In 2002, Korba
changed its corporate name to Złomrex Sp. z o.o. In 2003, Mr. Sztuczkowski made an in-kind contribution of his
sole proprietorship to Złomrex Sp. z o.o. In 2004, we purchased Ferrostal Łabȩdy, which specializes in producing
semi-finished products in the form of steel billets and finished steel products and changed our corporate form
from a limited liability company to a joint stock company. In 2004, we acquired Szopienice to launch the
production of semi-finished products made from non-ferrous metals. In addition, the Company established Nowa
Jakość, which recycles waste materials. In 2006, we purchased HSW-HSJ, a leading Polish producer of quality
(high alloy) steel and long hot-rolled products (bars) made from carbon steel and high alloy steel, together with
HSW-WB, which specializes in producing hot-rolled sheets from carbon steel, high alloy steel and special
purpose steel. On November 2, 2006, HSW-WB and HSW-HSJ merged into one company, HSW-HSJ. We
recently purchased a steel product distribution network consisting of Centrostal Górnoślaşki, Centrostal and
Centrostal Opole to expand the distribution of our finished products throughout Poland and intend to acquire a
74.9% interest in voestalpine Stahlhandel GmbH, with a further option to acquire a 25.1% interest, to have access
to its retail distribution network in Austria and Central and Eastern Europe. See “The Transactions — The
Austrian Acquisition” and “Business — Finished Products — Distribution — voestalpine Stahlhandel GmbH” in
this Offering Memorandum.

We organize our business into four business segments: scrap metal, semi-finished products, finished
products, and other.
Scrap Metal
We are the largest supplier of scrap metal in Poland with a market share of approximately 12.5% of the
scrap metal purchased in Poland in 2005. Our scrap metal segment consists of buying, processing, and selling
scrap metal to our customers and for our own internal use. Our scrap metal collection network consists of 14
scrap metal yards situated close to our customers primarily in regions in southern Poland which have the best
sources of scrap metal due to the concentration of heavy industry. We are currently building another scrap metal
yard in northeastern Poland. We also purchase scrap metal from a large number of scrap metal traders (including
collection branches and industrial producers) which are serviced by our container fleet. In 2005, we obtained
approximately 42% of our entire scrap metal supply from our own scrap metal collection network, with the
remaining approximately 58% being purchased from scrap metal traders. This enables us to use our own sources
of scrap metal supply to produce semi-finished and finished steel products in times of major shortages of scrap
metal in the scrap metal market. We have a broad and stable customer base for scrap metal, including CMC
Zawiercie, Celsa Huta Ostrowiec, Moravia Steel and Mittal Steel Poland (now Arcelor Mittal) and also leverage
our extensive scrap metal collection network to provide competitive pricing to our customers. We intend to
establish each year two additional scrap metal yards in our scrap metal collection network, at a cost of
approximately PLN 4.0 million (€1.0 million) per yard, to gain more access to sources of scrap metal supplies
until we have the geographic reach to cover all potential primary scrap suppliers in Poland. Our scrap metal
segment is our third largest segment in terms of revenues, accounting for approximately 19.3% and 10.9%,
respectively, of our consolidated revenues and gross profit for the year ended December 31, 2005 and 11.9% and
6.6%, respectively, of our consolidated revenues and gross profit for the nine months ended September 30, 2006.
Semi-Finished Products
We are the second largest seller of semi-finished steel products in Poland based on volume with a market
share of approximately 28% of sales to external customers in 2005 and the fifth largest producer of semi-finished
steel products based on volume with a market share of approximately 4% in 2005. Our semi-finished products
segment consists of buying and processing scrap metal into steel billets and selling some of those steel billets to our
customers with the remainder for our own internal use. Approximately 54% of the semi-finished products produced
at our steel mills and purchased by us on the market from third parties were used by our finished products business
in 2005, with the remaining approximately 46% sold to customers such as Huta Łabe˛dy, Man Ferrostal, Huta Pokój
S.A. and Stalexport. We offer a broad range of semi-finished products, concentrating primarily on steel square and
round billets and to a much lesser extent on blooms and sheet slabs. Unlike many of our competitors, we can
produce small batches of high grade, higher margin steel billets for special applications, and we have access to scrap
metal, our primary raw material in the production of semi-finished products, through our scrap metal collection
network. Our semi-finished products segment is our second largest segment in terms of revenues, accounting for
24.3% and 52.8%, respectively, of our consolidated revenues and gross profit for the year ended December 31, 2005
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and 15.6% and 21.0%, respectively, of our consolidated revenues and gross profit for the nine months ended
September 30, 2006. We expect growth in this segment as growth in the automotive and tube rolling industries in
Poland and Europe continues.
Finished Products
We are also the fifth largest producer of finished steel products in Poland with a market share of
approximately 5% in 2005. In addition to selling products that we produce, we also buy finished products on the
market and resell them to our customers. We are the fifth largest seller of finished steel products in Poland based
on volume with a market share of approximately 3% of sales to external customers in 2005 and approximately
5% in 2006 as a result of recent acquisitions. We buy steel billets from our semi-finished products segment and
other companies, process them into finished products and sell them to our customers. We have an extensive
range of customers inside Poland, principally in the construction, machine, forging, shipbuilding, defense and
mining industries, including ThyssenKrupp, Baustal, Bodeko and Stalexport. We have a highly diversified
product offering which includes long products such as flat, plain and reinforced steel bars and flat products (also
known as steel sheets and strips). We have recently started offering higher margin products such as special
application products for the mining industry and steel sheet products with military applications (armor jackets
and steel plating for tanks). We benefit from our ability to produce a full range of products in small batches
unlike our major competitors, our access to our extensive scrap metal collection network, our concentration on
high grade finished steel products with high margins and our stable customer base.
Our recent acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole have provided us with
a retail distribution network through which to sell our finished products directly to end customers throughout
Poland. Our finished products segment is our largest segment in terms of revenues, accounting for 37.8% and
9.8%, respectively, of our consolidated revenues and gross profit for the year ended December 31, 2005 and
54.0% and 57.2%, respectively, of our consolidated revenues and gross profit for the nine months ended
September 30, 2006. We expect substantial growth in this segment as growth in the construction and machine
industries in Poland and Europe continues. In addition, the Austrian Acquisition will also provide us with a retail
distribution network in Austria and Central and Eastern Europe through which to sell our finished products to
voestalpine Stahlhandel GmbH’s customers. We believe that through the Austrian Acquisition our retail
distribution networks will become one of the most important factors driving growth in our overall business in the
future as well as helping to reduce volatility in end product sales by selling directly to end customers. voestalpine
Stahlhandel GmbH’s revenues for the fiscal year ended March 31, 2006 were €303.8 million and for the six
months ended September 30, 2006 were €172.0 million.
Other
We buy, sell and process non-ferrous scrap into finished products, buy and sell non-ferrous products and
recycle materials such as plastic foil, aluminum, paper and other products. Our products in our other business
include non-ferrous rods, strips, and ingots. Our other segment further diversifies our exposure to certain
commodities. Since this segment is exposed to the commodity prices of non-ferrous products, it is not exposed to
steel price volatility. In 2005, the other segment was the most profitable one, as non-ferrous metals did not decline
in price as steel did. We rely on a stable customer base which primarily includes KGHM Metraco, the Hutmen
group and Alumetal Kety. Our other segment is our fourth largest segment both in terms of revenues and gross
profit, accounting for 18.7% and 26.5% of consolidated revenues and gross profit for the year ended December 31,
2005 and 18.5% and 15.1% of our consolidated revenues and gross profit for the nine months ended September 30,
2006.
Competitive Strengths
Strong retail distribution network. Our strong retail distribution network enables us to reach and
respond to a growing number of customers. With the recent acquisitions of Centrostal Górnośla˛ski, Centrostal
and Centrostal Opole and the anticipated acquisition of voestalpine Stahlhandel GmbH headquartered in Austria,
we will have created a retail distribution network for our finished products which is the largest in Austria one of
the largest in Poland and in Central and Eastern Europe. See “Business — Finished Products — Distribution —
Centrostal Companies — and — voestalpine Stahlhandel GmbH” in this Offering Memorandum. Our
acquisition of voestalpine Stahlhandel GmbH, the leading warehousing and steel distribution company in Austria
in terms of revenue and volume with significant operations in Central and Eastern Europe will not only will
increase distribution capabilities for our finished products in Austria and Central and Eastern Europe and enable
us to market additional products to our growing end customer base, but we believe it will trigger growth by
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allowing us to interact with end customers directly and thus enabling us to more quickly adjust to changes in
demand and to ultimately procure more business from our customers. We believe that through the Austrian
Acquisition our retail distribution business will become one of the most important factors driving growth in our
overall business in the future.
Vertically-integrated business. As a vertically-integrated steel producer, our exposure to external
margin volatility is limited because our overall margin is comprised of three independent components (steel
scrap, retail distribution and production), two of which (steel scrap and retail distribution) are relatively stable
throughout the steel cycle. Unlike our competitors, we can also increase the supply of scrap metal on short notice
to meet increasing demand from our semi-finished and finished products’ segments because we have access
through our own scrap metal collection network and purchases from scrap metal traders to almost twice the
amount of scrap metal necessary for our steel mills to produce our semi-finished and finished products.
Largest scrap metal supplier in Poland. We are the largest scrap metal supplier in Poland based on
volume, having purchased approximately 692,000 tonnes of scrap metal in 2005, of which approximately 57%
was used by our semi-finished and finished products segment and approximately 43% was sold to external
customers in Poland. We currently have the largest scrap metal collection network in Poland with 14 existing
scrap metal yards and an additional scrap metal yard in northeastern Poland is under construction. We had a
market share of 12.5% of the scrap metal purchased in Poland in 2005. Our scrap metal yards are strategically
located in key regions primarily in southern Poland which are in close proximity to scrap sources due to the
concentration of heavy industry in that region. Our scrap metal yards are also specially equipped with modern
equipment to handle large volumes of scrap metal and are close to major transportation centers to facilitate the
distribution and trade of scrap metal. Due to scrap metal being a primary material for the production of our semi-
finished and finished steel products, our position as the largest scrap metal supplier in Poland also enables us to
ensure that we can meet our own production requirements for these products, even in times of major shortages of
scrap metal in the market. In addition, we believe that being the largest scrap metal supplier in Poland we have an
advantage over our competitors because we have the most modern facilities to process scrap metal, as well as
fleets of specialized vehicles and containers to facilitate collecting scrap and modern machinery such as shear
machines to press and cut scrap, and we have a long established brand name and long-term relationship with our
customers.
Flexible cost structure. Our cost structure is more flexible than that of most of our competitors because
we use electric arc furnace technology where scrap metal is the primary raw material accounting for approximately
90% of raw materials used as compared to blast furnaces which rely predominantly on iron ore as a raw material.
Historically, scrap prices have had a close correlation to steel prices which has the effect of allowing us to pass on
feedstock price increases to our customers and of reducing margin volatility. In addition, we have the ability to
source scrap metal from our scrap metal segment, and in times of changing market conditions, we can adjust
quickly to changes in the market since scrap purchase prices and our steel product sales are typically set monthly.
By comparison, companies using blast furnaces cannot easily negotiate lower prices of iron ore because of the
concentration of iron ore producers and because contracts with iron ore producers are usually set on a yearly basis
with fixed prices. In addition, electric arc furnaces require less machinery, fixed assets and employees to operate
relative to blast furnaces and can be switched off immediately, without paying any additional costs. We also do not
lose expensive refractory materials which are crucial to steel production in blast furnaces and are lost when blast
furnaces are shut down. Variable costs accounted for 86.5% of our total costs in 2005. We believe our cost structure
will become even more flexible after the Austrian Acquisition because voestalpine Stahlhandel GmbH’s retail
distribution business is characterized by an even higher level of variable costs.
Our modern production facilities produce higher quality niche products. We have the most modern
production facilities in Poland which enable us to produce high grade semi-finished and finished products tailor
made in small batches for our customers. Our modern steelworks at Ferrostal Łabe˛dy and HSW-HSJ, for
example, can produce a full range of steel billets (classes I through VI at Ferrostal Łabȩdy and classes I through
VIII at HSW-HSJ). We are shifting our focus to concentrate even more on high grade steel (classes IV to VIII).
Our rolling mills also specialize in the production of high quality niche products such as a full range of flat bars,
including special application bars at ZW-WB, small diameter reinforcement bars at Ferrostal Łabe˛dy and high
grade thick steel sheets at HSW-HSJ. In addition, there are a limited number of competitors in the Polish market
concentrating on the production of these tailor-made products. As a result, we can earn higher margins because
we can offer small batches of tailor-made products to the forging, automotive and machine industries and
because we have a growing number of specialty customers as a result of our expansion in the retail distribution
business.
Strong demand for steel. Growth in steel production is driven by increased demand for steel products
by domestic and international customers. In Poland, demand for steel production has increased because of
increased investments in infrastructure projects related to Poland’s accession to the European Union, general
economic growth and increased demand from construction and machine building industries. The favorable
76
outlook for our products in the region is also supported by an improvement in the manufacturing industry in
Germany and Eastern Europe. Additionally, based on strong economic growth and accelerating industry
consolidation, the global steel market has generally performed strongly over the past three years as has the Polish
market. Global and Polish demand has also been increasing despite swings in prices. Global crude steel
production increased by 6.6% in 2005 to approximately 1,139 million tonnes and is expected to reach
approximately 1,200 million tonnes in 2006.
Dynamic and experienced management team. Our management team has a proven track record in
managing operations under its control and turning around newly acquired underperforming assets. For example,
we acquired Ferrostal Łabe˛dy in 2004 and improved efficiencies in that business to such an extent that
production increased from 280,000 tonnes in 2003 to 336,000 tonnes in 2005, the utilization rate increased from
83% to 96% over that same period and sufficient cash flows were generated to repay the purchase price and
outstanding debt of that business within 18 months from the date of purchase. In addition, our president and vice
president have been with the Company since 1990 and amassed significant experience in the changing dynamics
of the Polish steel market during that time. Our senior management team combines extensive industry and
marketing expertise with financial and management expertise.
Strategy
Further Develop Retail Distribution Network. We intend to develop our retail distribution network further
to grow our business. Our recent acquisitions of Centrostal Górnośla˛ski, Centrostal and Centrostal Opole form the
basis of our retail distribution network in Poland. See “Business — Finished Products — Distribution — Centrostal
Companies” in this Offering Memorandum. On December 20, 2006, we entered into a share purchase agreement to
acquire a 74.9% interest in voestalpine Stahlhandel GmbH, the leading warehousing and steel distribution company in
Austria with significant operations in Central and Eastern Europe, with an option to acquire a further 25.1% interest, in
part benefit from and grow its retail distribution network. See “Summary — Recent Developments — voestalpine
Stahlhandel GmbH” and “The Transactions — The Austrian Acquisition” and “Business — Finished Products —
Distribution — voestalpine Stahlhandel GmbH” in this Offering Memorandum. We believe that with an expanded
retail distribution network, we will achieve economies of scale resulting in better margins in our finished products
business and build an international retail distribution network to reach and offer a wider range of finished products
directly to more end customers. In addition, the retail distribution network will allow us to carry products of other steel
producers which are complementary to our product portfolio. This will enable us to strengthen our relationships with a
broader customer base by offering them a wider range of products. We believe that through the Austrian Acquisition
our retail distribution business will become one of the most important factors driving growth in our overall business in
the future.
Expand Product Range to Higher Margin Niche Products. We intend to expand the range of our high
grade semi-finished and finished steel products, focusing on higher margin niche products in both segments.
Specifically, we intend to increase our production of square and round billets in our semi-finished products
segment which are used mainly in the forging and tube rolling industries and long products such as flat, plain and
reinforcement steel bars and flat products (steel sheets and strips) in our finished products segment, which are
mainly used in the automotive, machine, forging, and shipping industries, all of which offer higher margins than
lower grade steel products produced by our major competitors in Poland. We will also focus on producing
finished products with special applications for the mining and defense industries. We believe that by expanding
our product range to higher margin niche products we will not only increase our business with our current
customers, but also develop new relationships with new customers.
Strengthen our scrap metal business. We intend to strengthen our market share in scrap metal segment
by expanding our scrap metal collection network through the establishment of two new scrap yards per year until
we have the geographic reach to cover all potential primary scrap suppliers in Poland and expanding our facilities
to include more specialized vehicles, containers and machinery to more quickly process scrap. This scrap metal
collection network will continue to ensure a full supply of scrap metal for the production of our semi-finished
and finished steel products, as well as sales of scrap metal to external customers. We believe that by
strengthening our already market leading position in our scrap metal business, we will also be able to improve
our access to scrap metal supplies, widen our customer base and increase synergies with our other businesses. We
intend to install two scrap shredding facilities which we will use to increase the quality of our scrap metal and
which will in turn materially improve our scrap margins.
Expand Capabilities of Existing Assets. We intend to expand the current capabilities of our existing
assets to grow our business, in particular at Ferrostal Łabe˛dy and HSW-HSJ. At Ferrostal Łabe˛dy, we are
increasing our market share in higher margin specialized products such as mining by investing in additional
oxygen burners for our electric arc furnaces. At HSW-HSJ, we have added a fourth work shift and made some
complementary investments to increase production capacity.
77
Grow Through Selective Acquisitions. We intend to further expand our business through selective
acquisitions. As we have in the past, we will continue to review opportunities to acquire steel scrap producing
and retail distribution companies which will enhance and complement our business. For example, we are
currently bidding for the steel trade operations of a publicly listed Polish steel company and are exploring
possibly purchasing an interest in a Polish shipyard. We are also currently exploring a number of financing
options for potential selective acquisitions, including a potential initial public offering of ordinary shares of the
Company.
We organize our business into four segments. Scrap metal, semi-finished products, finished products and
other. Our finished products segment accounted for 38% of our consolidated revenues for the year ended
December 31, 2005, with our semi-finished products business accounting for 24%, our scrap metal business for
19% and our other business segment for 19%. A description of our products and services, suppliers, customers
and markets, distribution facilities, primary materials, competitors, and strategy of each of our business segments
is set forth below.
Overview of Segments
Finished Product
Scrap processing Semi-Finished Product production and trading
and trading production and trading &
Retail distribution
Scrap Metal Segment

General
With PLN 168.5 million (€42.3 million) in revenue from external customers for the first nine months
ended September 30, 2006, our scrap metal segment is our third largest segment, contributing 11.9% of our total
consolidated revenues. We are the largest supplier of scrap metal in Poland with a market share of 12.5%, with
steel scrap accounting for 90% of our scrap metal production. Steel scrap is also an integral raw material in our
steel production process. For the first nine months ended September 30, 2006, we sold 236,607 tonnes of scrap
metal.
Revenue from external customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168.5 42.3
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 2.8
Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 3.1
Products and Services
In general, our scrap metal business operates by collecting scrap metal and selling it back to the market or
using it in the production of our semi-finished products. Compared to our other segments, our scrap metal
business is a lower margin segment, but it is strategically important because it serves as the main supplier of
primary material to our semi-finished and finished products business.
We purchase, process, refine, sell and trade scrap metal. We purchase primarily two types of scrap metal,
feedstock scrap and non-feedstock scrap. Feedstock scrap has the appropriate qualities in terms of size, mass and
the degree of impurity to be directly fed into the furnace to produce semi-finished steel products. Because
non-feedstock scrap does not meet at least one of these parameters, we process non-feedstock scrap into
feedstock scrap through the use of specialized machinery, including so-called punch shears.
We place containers close to sources of scrap metal and transport the containers to our scrap metal yards
with our own trucking fleet. We store scrap metal which we purchase from third party suppliers and which we
process in our own scrap yards in our scrap metal warehouses until we sell it to our customers or use it in our
own production facilities to produce semi-finished and finished steel products. Approximately 50% of the scrap
metal is feedstock scrap and is transported directly by our third party suppliers to our customers or our
production facilities. Because we collect and trade nearly twice the capacity of our own production facilities, we
are also able to offer competitive pricing to our customers by leveraging our scrap metal collection network.
Our scrap metal suppliers also include primary sources of this raw material which are comprised of
industrial plants and scrap collection points which serve as collection points to which industrial scrap collectors
can bring their scrap metal.
78
Suppliers
We do not generally enter into contracts with our scrap metal suppliers. We normally submit a purchase
order to a scrap supplier with the order amount specified in the purchase order and receive a confirmation from
the scrap metal supplier confirming the details of the purchase order. However, we enter into contracts with
forging plants to purchase industrial scrap from forging plants and anticipate growing this business in the future
because of the high quality of industrial scrap from forging plants. We also participate in tenders for outdated
production plants which are dismantled and sold as scrap metal.
We have a diversified supplier base, with the top supplier accounting for only 4%, and the top five
suppliers accounting for a combined 13% of total scrap metal supply.
The table below shows a breakdown of our leading sources in our scrap metal segment in 2005 based on
volume.
Leading Suppliers in Scrap Metal Segment

Volume
Suppliers (in thousands of tonnes) Percentage total
Huta Łabe˛dy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.5 4.4%
PPH Noan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 2.6%
KEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.6 2.1%
Olmet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 2.0%
Sigra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 1.9%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602.0 87.1%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691.6 100%
Customers and Markets

The most important external customers in our scrap metal segment are steel plants, which account for
most of our total revenues.
We have a diversified external customer base, with our top two customers accounting for 15.2% each, and
the top five customer accounting for 55.6% of total customer sales.
The table below shows a breakdown of our leading external customers in our scrap metal segment in 2005
based on volume.
Leading External Customers in Scrap Metal Segment

Volume
Customers (in thousands of tonnes) Percentage total
CMC Zawiercie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.8 15.4%
Celsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 14.8%
Moravia Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.2 11.1%
Mittal Steel Poland (now Arcelor Mittal) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.9 8.0%
Riva Stahl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 7.2%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129.3 43.4%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297.9 100%
The principal geographical markets for customers in our scrap metal segment are in southern Poland,
Germany and Czech Republic.
The following table shows the geographic distribution of total revenue to our customers in our scrap
metal segment in 2005.
Geographic Distribution of Total Revenue

Revenue for the year ended
December 31, 2005
PLN Percentage
Market millions € millions of total
Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.3 29.0 61.3%
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.4 10.2 21.5%
Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2 8.1 17.1%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.0 0.1%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188.0 47.8 100%
79
We also channel approximately half of the scrap metal we purchase as a raw material to our semi-finished
products segment, which is not included in scrap metal revenues.
Distribution Facilities
We are the largest provider of scrap metal with the most extensive scrap metal collection network in
Poland consisting of 14 existing scrap metal yards in Poland. Our scrap metal yards are located primarily near
major sources of scrap metal and major transportation sites and are equipped with specialized equipment to
efficiently process scrap. We are currently building another scrap metal yard in Olsztyn in northeastern Poland.
Z omrex Scrap Collection Network in Poland
Z omrex S.A. head office

Scrap Metal Branches
Additional scrap metal yard
under construction
Source: Company
Our scrap metal branches are located in Wrocław, Świdnica, Opole, Sosnowiec, Rybnik, Warsaw, Łódź,
Lublin, Szczecin, Kielce, Kraków, Świdwin, Gorzów, Wielkopolski and Poznań and our new branch under
construction in Olsztyn. We intend to expand the number of our scrap metal yards by establishing two additional
scrap metal yards each year, initially concentrating on western Poland (with eastern German steelworks as our
main customers) and northern Poland until we have the geographic reach to cover all potential primary scrap
suppliers in Poland.
The scrap yard in Warsaw is the largest, accounting for a substantial part of our scrap metal business
volume in tonnes. The remaining scrap yards are similar in size and operate in industrial parts of Poland.
Total capital expenditures of our scrap metal business amounted to PLN 7.6 million (€1.9 million) in
2005, which represented 35.5% of our Group’s total capital expenditures in 2005, compared to PLN 20.8 million
(€5.2 million) in 2004. Significant capital expenditures over the last two years included the purchase of four
metal shears at a total expenditure of PLN 13.0 million (€3.3 million), industrial loaders and special purpose
vehicles at a total expenditure of PLN 13.3 million (€3.3 million), and containers, electronic scales and property
at a total expenditure of PLN 7.6 million (€1.9 million). The largest ongoing investment in our scrap metal
business is the expansion of our scrap metal yard network.
We intend to install two scrap shredding facilities which we will use to increase the quality of our scrap
metal and which will in turn materially improve our scrap margins.
Competition
We are the leading supplier of scrap metal in Poland based on volume. The market for our scrap metal
business is centered primarily in southern Poland and is characterized by a significant number of scrap metal
suppliers. Our principal competitors are Centrozłom Wrocław, BSK Return, Kem, Stena Poland, Scholz and
Tom. We believe that there are significant barriers to enter this market because competitors need to establish an
extensive network of scrap metal branches before making a significant impact on the market.
80
Semi-Finished Products Segment
General
With PLN 220.7 million (€55.5 million) in revenue from external customers for the first nine months
ended September 30, 2006, our semi-finished products segment is our second largest segment, contributing
15.6% of our total consolidated revenues. We are the second largest seller of semi-finished steel products in
Poland with a market share of approximately 28% of semi-finished steel products sold to external customers in
Poland and the fifth largest producer of semi-finished products with a market share of approximately 4% in 2005.
For the first nine months ended September 30, 2006, we sold 150,800 tonnes of semi-finished products.
Nine months ended
September 30, 2006
Revenue from external customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220.7 55.5
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 3.1
Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9 4.2

We produce a full range of semi-finished products, concentrating primarily on square and round billets
and to a much lesser extent on blooms and slabs. We focus in particular on producing small batches of higher
grades of square and round billets tailor-made for our customers, which sets us apart from our competitors. These
products are less seasonal than basic grade steel and enjoy more stable demand from the forging and tube rolling
industries.
There are a total of 8 different grades of billets according to Polish classification standards. Low grade
billets, such as grades I and II, are used for basic applications in the construction industry. Higher grade billets
are used for special use and special products such as extruded and rolled profiles for the automotive industry.
Złomrex has a strong position in this niche area of high grade billets. This protects the business from larger
producers such as Mittal Steel Poland (now Arcelor Mittal) who focus on large scale production of lower grade
billets.
We produce the following semi-finished products at our production facilities in Ferrostal Łabe˛dy and
HSW-HSJ:
Ferrostal Łabe˛dy
Round/Square Billets
We focus primarily on the production of round and square steel billets with steel grades between classes I
through VI. We produce square billets with diameters of 100, 120, 140, 160 and 165x140 millimeters and round
billets with diameters of 170 millimeters at our steelworks in Ferrostal Łabe˛dy. Square and round billets are
produced on continuous casting machines and further processed by forging, rolling or extrusion. Products made
from these billets are principally used by the automotive tube rolling, forging and machine industries and as a
primary raw material to produce finished products for our finished products business.
HSW-HSJ
We produce primarily blooms (270 x 320 mm) and slabs (130-180 x 800 mm) in steel grades between
classes I through VIII. Blooms are semi-finished products used for further rolling into billets or directly into
finished round products. Slabs are semi-finished products used to produce sheets which are used primarily in the
construction, machine and defence industries.
Our blooms and slabs are produced mainly in higher steel grades between classes IV and VIII. These
products are the most profitable of the Company with the highest margins and lowest volatility.
Suppliers
We use scrap metal purchased through our scrap metal collection network as the principal raw material to
produce our semi-finished products. We source scrap from third parties by submitting purchase orders for scrap
metal and receive confirmation from the scrap metal traders regarding the details of our purchase order. We then
place collection containers close to their locations and transport the containers with our own trucking fleet to one
of our scrap yards in our extensive scrap metal collection network. This scrap is then transported to our
steelworks at either Ferrostal Łabe˛dy or HSW-HSJ for processing into semi-finished products in electric arc
furnaces and then are used in continuous casting machines which cast liquid steel into billets, slabs and blooms.
Approximately 57% of the scrap metal we purchased and distributed in 2005 was used by our semi-
finished products segment and approximately 43% was sold to external customers in Poland.
81
Two suppliers collectively account for approximately 48% of our external supply of raw materials for our
semi-finished products business. However, this does not have a substantial effect on our business because we rely
on external sourcing for only a small portion of our supplies. Our top five suppliers account for 84% of the
external supply of raw materials for our billets.
The table below shows a breakdown of our leading suppliers in our semi-finished products segment in
2005 based on volume.
Leading Suppliers in Semi-Finished Products Segment

Volume
Suppliers (in thousands of tonnes) Percentage total
Alta, a.s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8 27.4%
Belkap Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 20.6%
Celsa Huta Ostrowiec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 14.4%
Man Ferrostal AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 13.1%
Promet Slovakia, s.r.o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 9.5%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9 15.0%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.4 100%

The most important external customers in our semi-finished products segment are in the mining, forging,
and tube rolling industries, which account for almost all of our total revenues in this segment.
The table below shows a breakdown of our leading external customers in our semi-finished products
segment in 2005 based on volume.
Leading External Customers in Semi-Finished Products Segment

Volume
Customers (in thousands of tonnes) Percentage total
Huta “Łabe˛dy” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.8 43.5%
Man Ferrostaal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.5 18.9%
Huta Pokój S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.7 12.7%
Stalexport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7 7.4%
Mittal Steel Poland (now Arcelor Mittal) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 3.0%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.0 14.5%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171.8 100%
Although our customer base is not highly diversified with one customer accounting for 44% of total
revenues in this segment, we believe that this concentration in one customer is mitigated by the fact that this
customer is a small rolling mill whose plant lies close to Ferrostal Łabe˛dy and is highly dependent on our
products.
The principal geographical markets for our semi-finished products are Poland and Germany.
The following table shows the geographic distribution of total revenue in our semi-finished products
segment in 2005.

Revenue for year ended
December 31, 2005
Percentage
Market PLN millions € millions of total
Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189.9 48.7 80.0%
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.0 9.3 19.8%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4 2.6 0.2%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237.3 59.6 100%
In Poland and Western Europe, we sell products in our semi-finished segment directly to customers who
come to our production facilities to pick up their orders. Customers in Germany are shipped their products by
rail. For certain customers, we have implemented business on-line order processing in our semi-finished products
segment, which also provides up-to-date information on inventory and delivery periods.
We also supply steel billets as primary material to our own finished products business.
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Production Facilities and Process
Our semi-finished products division has two manufacturing facilities, one at Ferrostal Łabe˛dy and the
other at HSW-HSJ.
Our steelworks at Ferrostal Łabe˛dy are among the most modern steelworks in Poland, having been
completed in 1997. Ferrostal Łabe˛dy has a production capacity which was recently increased to 400,000 tonnes
per year and produce a wide range of billets (classes I to VI). The majority of steel billets produced at Ferrostal
Łabȩdy are high grade billets. Our other steelworks at HSW-HSJ, which were modernized in 1995, produce small
batches of higher grade billets tailor made for certain customers. For the first nine months ended September 30,
2006, approximately 70% of our semi-finished products were produced at Ferrostal Łabe˛dy with the remaining
30% produced at HSW-HSJ. The facilities at Ferrostal Łabe˛dy and HSW-HSJ use electric arc furnaces. The
advantage of electric arc furnaces is that because scrap metal accounts for approximately 90% of the raw
materials used in electric arc furnaces compared to 25% in blast furnaces, we are able to maintain a flexible cost
base and ensure availability of feedstock through our significant supplies of scrap metal. Electric arc furnaces
also require less machinery, fixed assets and employees to operate and can be switched off immediately during
an economic downturn.
Total capital expenditures of our semi-finished products business amounted to PLN 10.3 million
(€2.6 million) in 2005 and PLN 1.7 million (€0.4 million) in 2004. Significant investments over the last two
years were the modernization of the electric arc furnaces at a total expenditure of PLN 7.5 million ( €1.9 million),
modernization of ceiling hoists at a total expenditure of PLN 4.2 million (€1.1 million) and PLN 1.4 million
(€0.4 million) for research and development. We also continue to invest in the modernization of our facilities in
an effort to increase efficiency.
Overall, we believe that our recent investments in this business will further allow us to produce small
batches of high quality semi-finished products to meet the growing demand for these products in the automotive
and tube rolling industries.
Primary Materials
Scrap metal is the primary raw material used to produce steel billets. In addition, ferro-alloys are required
in the production process. We purchase the scrap metal primarily from our scrap metal business and ferro alloys
and refractory materials from a number of suppliers on the market.
Competition
The market for semi-finished products is global in nature and is dominated by a small number of
significant producers. Our principal competitors in the Polish market include Polish subsidiaries of global steel
companies such as Mittal Steel Poland (now Arcelor Mittal), CMC and Celsa, with Mittal Steel Poland (now
Arcelor Mittal) accounting for approximately 65% of the entire semi-finished product market. We are currently
the fifth largest producer of semi-finished products in Poland with a market share of 4%.
We believe that our strong market position is derived from our ability to produce a wide range of steel
billets for special applications, including higher grades in small batches which have higher margins than the
lower grade steel produced mainly by our principal competitors. We distinguish ourselves from our main
competitor Mittal Steel Poland (now Arcelor Mittal) because it produces large quantities of low grade steel billets
and may not be able to cost efficiently change its production structure to compete with us in the market.
Finished Products
General
With PLN 765.2 million (€192.3 million) in revenue from external customers for the nine months ended
September 30, 2006, our finished products segment is our largest segment, contributing 54.0% of our total
consolidated revenues. We are the fifth largest producer of finished steel products in Poland and the fourth
largest producer of long steel products in Poland. For the nine months ended September 30, 2006, we sold
361,915 tonnes of finished products.
Revenue from external customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 765.2 192.3
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.8 23.7
Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 0.5
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Our four rolling mills produce long and flat steel products. Long products are produced at our rolling
mills at ZW-WB and Ferrostal Łabe˛dy while long products and flat products are produced at HSW-HSJ.
Long steel products

Long steel products is the term used for steel products that are formed from billets, blooms or ingots.
They are produced in diverse grades, dimensions and are used in a multitude of areas. Long steel products are
primarily used by the construction, machine, shipbuilding, forging, pipe, ball bearing, defense and mining
industries. We produce the following long steel products at the following plants:
ZW-WB
Š flat bars (full range) round and square bars with a capacity of 180,000 ton per year. These are general
application products used primarily by the shipbuilding, mining and automotive industries.
Ferrostal Łabe˛dy
Š hot rolled products such as reinforced and plain bars (focus on small diameters) with a capacity of
96,000 tonnes per year. These are primarily used by the construction industry.
HSW-HSJ
Š rolled billets (80/100/120 sq.), which are primarily used by forging and automotive industries; and
Š round bars, (55 to 120 mm in diameter), including peeled bars up to 115 mm in diameter with a
capacity of 142,000 tonnes per year. These are primarily used by the forging and machine industries.
Flat steel products

Flat steel products is the term used for steel products that are produced from slabs and formed into a strips
or sheet by means of various rolling procedures while hot or cold. A flat product that has a width of over 600
millimeters is usually classified as a sheet. Flat steel products are primarily used by automotive and consumer
goods industries and to a lesser extent by the construction, shipbuilding, machine and defense industries (such as
armor sheets and armor plating for tanks). We produce thick sheets with a capacity of 100,000 ton per year in
sizes 10-30 x 2000 x 6000 mm at our HSW-HSJ plant.
In addition, we purchase 20,000 tonnes of mainly thick sheets per year for trading to provide our
customers with a broader range of products. We have begun importing cold, hot and galvanized sheets from
China.
Suppliers
We use steel billets produced by our semi-finished products business as the primary source of raw
materials to produce our finished products. We also purchase steel billets from third party suppliers to produce
our finished products. Steel billets purchased from third party suppliers are shipped to ZW-WB. We enter into
short-term contracts with our steel billet suppliers as we receive most of our external steel billet supplies
principally from the Ukraine and Belarus. These contracts include standard provisions such as price, time of
delivery, quantity and other standard terms.
Our finished products are mainly categorized in four different groups: reinforced bars; round bars; flat
bars; and sheets. Typically, higher grade products benefit from higher margin and lower price volatility than
lower grade products. Reinforced bars have the highest margin volatility, whereas sheets have the highest margin
and lowest price volatility. Through our acquisitions, we have been shifting more towards the higher margin,
lower price volatility products.
We also purchase finished products from a number of suppliers which we then resell to our customers.
We enter into short-term contracts with these suppliers under which we purchase these finished steel products.
We typically buy and sell in short-term bulk contracts and on-sell their products to large end-customers primarily
in Poland.
We have a diversified supplier base, with the leading supplier accounting for 29% and the top five
suppliers accounting for 66% of our supplies.
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The table below shows a breakdown of our leading suppliers for our finished products segment in 2005
based on volume.
Leading Suppliers in Finished Products Segment

Volume
(in
thousands Percentage
Suppliers of tonnes) total
Huta Pokój S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 29.0%
Huta Stali Cze˛stochowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 12.6%
Stalexport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 10.5%
Alta, a.s. Eur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 7.2%
Huta Łabe˛dy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 6.6%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 34.1%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.6 100%

The most important customers in our finished products segment are in the construction, industrial, mining
and shipbuilding industries.
Our finished products business is highly diversified, and no individual customer accounts for more than
6.4% of total sales. The table below shows a breakdown of our leading external customers in 2005 based on volume.
Leading External Customers in Finished Products Segment

Volume
(in thousands Percentage
Customers of tonnes) total
Baustal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1 6.4%
Stalexport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 5.0%
Serwis Polska Stal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 4.7%
Thyssenkrupp Energostal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 4.2%
Bodeko . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 4.2%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.2 75.5%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220.2 100%
The principal market for our finished products segment is Poland.

The following table shows the geographic distribution in our finished products segment’s total revenue in
2005.

Revenue for year ended December
31, 2005
PLN Percentage
Market millions € millions of total
Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354.5 89.1 96.2%
Slovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 0.8 0.9%
Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 0.8 0.8%
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 0.6 0.8%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 1.3 1.4%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368.6 92.6 100.0%

Our finished products segment has six rolling lines located in Poland: three in ZW-WB, one in Ferrostal
Łabe˛dy and two in HSW-HSJ.
The facilities in ZW-WB are the largest, accounting for a substantial part of our finished products
business production volume in tonnes, followed by HSW-HSJ, which also makes a major contribution to total
volumes and then by Ferrostal Łabe˛dy. All of these facilities rely on electric arc furnaces. The advantage of
85
electric arc furnaces is that because scrap metal accounts for approximately 90% of the raw materials used in
electric arc furnaces compared to 25% in basic oxygen furnaces, we are able to maintain a flexible cost base and
ensure availability of feedstock through our significant supplies of scrap metal. Electric arc furnaces also require
less machinery, fixed assets and employees to operate and can be switched off immediately during an economic
downturn.
Total capital expenditures of our finished products business amounted to PLN 1.5 million (€0.4 million) in
2005 and PLN 1.1 million (€0.3 million) in 2004. Significant investments over the last two years were
modernization of the furnaces used in the rolling mills for finishing the semi-finished products. We also continue to
invest in the modernization of rolling equipment in an effort to increase quality and efficiency of production.
Distribution — Centrostal Companies

We purchased the Centrostal Companies in 2006 to start our retail distribution network for finished
products in Poland and have become one of the largest retail distributers of finished products as a result of these
acquisitions. We distribute all of our finished products through the retail distribution network of the Centrostal
Companies to our end customers, and we also distribute a wide range of products for a number of other Polish
steel producers through this retail distribution network. The primary end-user customers of the Centrostal
Companies are the automotive, tube rolling, forging, ball bearing and defense industries. The Centrostal
Companies are active primarily in southern Poland and do not conduct business outside of Poland. Their main
competitors are the three other Centrostal companies that were previously owned by the Polish government and
were recently sold to our competitors in Poland.
Distribution — voestalpine Stahlhandel GmbH

General
On December 20, 2006, we entered into a share purchase agreement to acquire a 74.9% interest in
voestalpine Stahlhandel GmbH, a leading warehousing and steel distribution company in Austria with significant
retail distribution facilities in Central and Eastern Europe, with an option to acquire a further 25.1% interest,
including the Czech Republic, Croatia, Poland and Romania and trade offices in Hungary, Slovakia, Slovenia and
Bosnia–Herzegovina. voestalpine Stahlhandel GmbH had consolidated revenues of €303.8 million in the fiscal
year ended March 31, 2006 (compared to €332.6 million in the fiscal year ended March 31, 2005) and EBITDA
of €10.2 million in the fiscal year ended March 31, 2006 (compared to €26.5 million in the fiscal year ended
March 31, 2005). The consolidated financial results of voestalpine Stahlhandel GmbH and its subsidiaries for the
periods presented do not reflect the results of certain non-consolidated subsidiaries, including voestalpine
Stahlhandel Polska Sp. z o.o. (Poland), voestalpine Stahlhandel Slowakei s.r.o. (Slovakia), voestalpine
Stahlhandel Budapest Kft. (Hungary), voestalpine Stahlhandel d.o.o. (Slovenia) and voestalpine ambient
Stahlhandel s.r.l. (Romania). These subsidiaries were not historically consolidated in voestalpine AG’s financial
statements because they were not considered material to voestalpine AG. The combined EBITDA of these
subsidiaries is approximately €2 million. See “Summary Financial Information — Summary Unaudited Pro
Forma Financial Information”. voestalpine Stahlhandel GmbH’s largest market is in Austria, which voestalpine
Stahlhandel GmbH estimates accounted for approximately 79.8% of its consolidated revenues in the fiscal year
ended March 31, 2006 (compared to 78.9% in the fiscal year ended March 31, 2005). In 2005, voestalpine
Stahlhandel GmbH had on average 451 employees and an overall trade volume of approximately 455,000 tonnes.
voestalpine Stahlhandel GmbH’s primary end-user markets are the civil and mechanical engineering and
construction and automotive industries. The main business of voestalpine Stahlhandel GmbH is comprised of the
sale and distribution of heavy plates, sections and thin sheets through its subsidiaries in Austria, the Czech
Republic, Croatia, Poland and Romania and its four trade offices in Hungary, Slovakia, Slovenia and
Bosnia–Herzegovina.
voestalpine Stahlhandel GmbH is active throughout Austria, the Czech Republic and Croatia. In Poland,
its business activities are concentrated in the southern part of the country and in Romania in the western part. At
present, Slovenia, Hungary and Bosnia-Herzegovina are served by sales offices and products are delivered from
the closest warehouses.
86
Austria Czech Republic
(1) (1)
– Linz – Pardubice
(1) (1)
– Graz – Vyskov
Poland – Vienna
(1)
Poland
(1)
– Klagenfurt – Gliwice
– Salzburg Slovakia
(1)
– Innsbruck – Nitra
Hungary Bosnia – Herzegovina

Czech Republic
– Budapest – Sarajevo
Slovakia Slovenia Romania
(1)
– Maribor – Sibiu
Austria Hungary Croatia

(1)
– Varazdin
– Osijek
Slovenia
Romania – Zagreb
Croatia (1) Warehouse
Bosnia –
Herzegovina
Z omrex SA head office Voestalpine retail network Centrostal retail network
The revenues of voestalpine Stahlhandel GmbH for the fiscal year ended March 31, 2006 can be broken
down into product groups as follows:
Product (€ millions) (1,000 tonnes)
Rod and section steel bars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.3 88.0
Reinforced steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.0 114.9
Circular steel tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 9.6
Light-weight section steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0 38.4
Flat products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159.8 228.7
Stainless steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.8 7.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342.0 487.16
Approximately 50% of the finished products are purchased from companies belonging to the group of
voestalpine AG. The second largest supplier is Arcelor Mittal.
voestalpine Stahlhandel GmbH offers a full range of services to its customers, including material testing
of the steel products, pre-processing of flat and long steel products, on-site technical consulting, quality
assurance and documentation. voestalpine Stahlhandel GmbH has a regional distribution network centred around
warehouses to meet the needs of its customers in those regions, a sales team for each region consisting of
specialists in the particular products for that particular region or industry, specific employees dedicated to service
particular clients and specific individuals responsible for national products and product deployment.
voestalpine Stahlhandel GmbH’s primary warehousing facilities are located in Linz and Graz in Austria
(total storage space 31,440 square meters). Its Austrian subsidiaries have 4 warehouse locations with a total
storage space of 50,260 square meters and its subsidiaries in Romania, Poland, Croatia, and the Czech Republic
operate 5 warehouses with a total storage capacity of 41,025 square meters. voestalpine Stahlhandel GmbH’s ten
largest customers contributed approximately 21.9% to voestalpine Stahlhandel GmbH’s revenues in 2005.
We believe the Austrian Acquisition will enable us to supply a full range of finished steels products in our
finished products business directly to end customers through voestalpine Stahlhandel GmbH’s retail distribution
network. Our intention is to leverage voestalpine Stahlhandel GmbH’s retail distribution network to distribute
both the Company’s and voestalpine Stahlhandel GmbH’s finished products directly to end customers and to
enter markets in which the Company has not been active in the past.
Primary Materials
Steel scrap is the main raw material (about 90%) used in production of steel billets, blooms and slabs.
Other additives are iron concentrates in different forms, different ferro-alloys and other metals depending on the
steel grade actually produced. We use our own semi-finished products as well as semi-finished products from
other suppliers, mainly from Belarus, Russia or Ukraine to produce finished products.
87
Competition
The market for finished products is global in nature and is dominated by a small amount of significant
producers. Our principal competitors include Mittal Steel Poland (now Arcelor Mittal), CMC Zawiercie, CELSA
Huta Ostrowiec, Arcelor Huta Warszawa and others, with Mittal Steel Poland (now Arcelor Mittal) accounting
for approximately 65% of the entire market. We are currently the fifth largest producer of semi-finished products
in Poland with a market share of 4%.
We believe that our strong market position is derived from our ability to produce high grade finished
products for special applications in small batches which have higher margins than lower grade steel produced by
our principal competitors. We distinguish ourselves in this regard from Mittal Steel Poland (now Arcelor Mittal)
because it produces large quantities of low grade steel billets and cannot cost efficiently change its production
structure to compete with us in the market for high grade finished steel products.
Other
General
With PLN 262.6 million (€66.0 million) of revenue for the first nine months ended September 30, 2006,
our other segment is our smallest segment, contributing 18.5% of our total consolidated revenues. For the first
nine months ended September 30, 2006, we sold approximately 8,400 tonnes of non-ferrous products.
Other Products
Our other business consists of four principal sub divisions: (i) the buying and selling of non-ferrous scrap
to our customers, (ii) the processing of non-ferrous scrap into finished products and selling those products to our
customers, (iii) the buying and selling of non-ferrous products and (iv) recycling materials, including plastic
foils, paper and other products.
Our non-ferrous foundry Szopienice is based in the Katowice area and manufactures finished products
and semi-finished products composed of non-ferrous metal alloys. Its product range includes solid rods, hollow
rods and steel sections of bronze and brass, rolled Zinc anodes, cast Zinc alloys, Zinc and aluminum primary
alloys.
Non-ferrous products are primarily traded through the Company’s trade office in Wrocław. Its main
trading partners are KGHM Metraco, the Hutmen group, Alumetal Kety, Nicromet, Orzeł Biały, Huta Cynku and
Miasteczko Śla̧skie. The buyers for non-ferrous metal products are cable and steel industries, packaging
manufacturers, plumbing fitting makers, foundries and construction industry plants.
Nowa Jakość is a recycling company focusing on recycling paper (80% of business), plastics (15% of
business) and other waste materials such as glass (5% of business). EU regulations require companies which
produce certain types of recyclable waste to pay a product fee based on the treatment and recycling of that waste.
Nowa Jakość enters into arrangements with those companies to collect and treat such recyclable waste on their
behalf. Nowa Jakość is currently expanding its warehouse facilities based on the Company’s network of scrap
yard branches and has its own vehicle fleet, reloading facilities and machinery.

We buy non-ferrous scrap through the same scrap metal collection network through which we buy scrap
metal. This enables us to capitalize on our existing scrap metal collection network. We use non-ferrous scrap and
process it into non-ferrous products at the same production facilities as we use for steel processing. We also buy
our non-ferrous products from our suppliers. We recycle materials such as paper, plastic and other waste
materials.
Intellectual Property Rights

We currently do not hold any patents and do not use any licenses other than for office software, including
accounting and bookkeeping applications. We hold rights to one trademark registered with the Polish patent
office. The registered trademark is the Company’s logo. The “Złomrex” trademark was registered on July 3, 1995
and its registration has since been extended until April 6, 2013.
Employees/Industrial Relations
As of September 30, 2006, we had approximately 2,500 employees. We have not experienced any work
stoppages or strikes.
88
Regulatory Environment
EC regulatory regime
The EU steel industry is regulated by the rules of the European Community as set out in the Treaty
Establishing the European Community (“EC”), as amended (the “Treaty of Rome”), and by the European
Economic Area Agreement (“EEA Agreement”). The Treaty of Rome now also incorporates the rules for the
majority of steel products that have previously been covered by the Treaty of Paris, establishing the European
Coal and Steel Community (“ECSC”), which ceased to have effect on July 23, 2002. The European Commission
is responsible for implementing the objectives of the Treaty of Rome while the European Free Trade Association
(“EFTA”) Surveillance Authority is responsible for monitoring, together with the European Commission, the
fulfillment of obligations under the EEA Agreement.
State aid
Both the Treaty of Rome and the EEA Agreement in general prohibit state aid that distorts or threatens to
distort competition in the EU and the EEA respectively. Following the expiration of the Treaty of Paris, the
generally rigorous EC/EEA rules on state aid also apply to the steel sector.
Anti-dumping and countervailing measures that were adopted under the old ECSC rules that were still in
force on July 23, 2002 remain in force.
The European Commission has stated its position that rescue aid and restructuring aid for firms in
difficulty in the steel sector are not compatible with the Common Market, whereas, aid to cover payments
payable by steel firms to workers made redundant or accepting early retirement as well as aid to steel firms
which permanently cease production of steel products may under certain circumstances be approved. Also state
aid for research and development and state aid for environmental protection may under certain circumstances be
held compatible with the Common Market. The European Commission has stated that in the future regional aid
for the steel industry will be held incompatible with the Common Market.
Antitrust
The Treaty of Rome and the EEA Agreement contain provisions prohibiting anti-competitive practices
and agreements which relate, inter alia, to the fixing or determination of prices, the restriction or control of
production or the sharing of markets subject, in certain cases, to block exemptions. In addition, both instruments
contain provisions prohibiting the abuse of a dominant market position.
In addition to the competition rules of the Treaty of Rome and the EEA Agreement, the Company’s
operations are subject to Polish competition laws. The Polish Antitrust Law prohibits anticompetitive practices
and agreements and abuse of a dominant market position.
The laws of other jurisdictions in which the Group operates also contain restrictions on anti-competitive
practices and agreements and abuse of a dominant market position.
Trade associations and other voluntary arrangements

For historic reasons related to the need to restructure the European steel industry, there has been close
co-operation among steel companies, the European Commission and national governments within the European
steel industry. European steel producers individually and through trade associations have played an important
part in conjunction with both the European Commission and governments in the process of attempting to resolve
problems of excess capacity, its causes and its consequences.
The Company is also member of trade associations, including the Scrap Metal Chamber of Commerce,
the Steel Chamber of Commerce and the Chamber of Steel Traders in Poland, and industry groups with respect to
the sale, promotion and marketing, and technical development of steel products.
Facilities and Properties

The majority of real property used for production purposes is owned or held in perpetual usufruct. A
perpetual usufruct right is established on the land owned by the State Treasury or a community for a period of 99
years (with some exceptions) and in practice is similar to the ownership. A perpetual usufructor of land is the
owner of building located on such land.
A few of the premises are used or leased under lease agreements.
89
The table below includes information about real property which is important for the operations of the
companies from Złomrex group.
Location Principal use Legal title Size (m²)
Złomrex
Poraj (ul. Zielona 26) . . . . . . . . . . . . . . . . . . . . . warehouses, offices ownership 18,283
Katowice Szopienice (ul. Ks. Majora Karola
Woźniaka 24) . . . . . . . . . . . . . . . . . . . . . . . . . production sites, perpetual usufruct 14,092
offices ownership
Kraków (ul. Mierzeja Wiślana 10) . . . . . . . . . . . warehouses, offices perpetual usufruct 19,778
Lublin (ul. Mełgiewska 7-9) . . . . . . . . . . . . . . . . warehouses perpetual usufruct 19,975
Łódź (ul. Rymanowska 4) . . . . . . . . . . . . . . . . . warehouses, offices perpetual usufruct 7,561
Opole (ul. Magazynowa 2) . . . . . . . . . . . . . . . . . warehouses, ownership 1,541
offices perpetual usufruct 6,734
Poznań (ul. Dziadoszańska 10) . . . . . . . . . . . . . warehouses, ownership 429
offices perpetual usufruct 20,980
Pruszków (ul. Błońska 8) . . . . . . . . . . . . . . . . . . warehouses, offices perpetual usufruct 42,901
Sosnowiec (ul. Piotrkowska 23) . . . . . . . . . . . . . warehouses, storage yard perpetual usufruct 26,995
Szczecin (ul. Andrzeja Struga 73) . . . . . . . . . . . warehouses, offices perpetual usufruct 19,506
Świdwin (ul. Batalionów Chłopskich) . . . . . . . . warehouses, perpetual usufruct, 8,880
offices ownership 270
Zdzieszowice (ul. Filarskiego 37) . . . . . . . . . . . warehouses, offices ownership 2,146
Olsztyn, Lubelska 23 . . . . . . . . . . . . . . . . . . . . . storage yard perpetual usufruct 6,733
offices ownership
Ferrostal Łabe˛dy
Gliwice-Łabe˛dy (ul. Zawadzkiego 45) . . . . . . . . main production site perpetual usufruct 117,735
Gliwice-Łabe˛dy (ul. Zawadzkiego 26) . . . . . . . . office building ownership 1,361
Pyskowice-Dzierżno . . . . . . . . . . . . . . . . . . . . . . production site perpetual usufruct 31,057
Leszno . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . storage yard perpetual usufruct 8,547
warehouses, offices ownership
HSW-HSJ
Stalowa Wola (ul. Kwiatkowskiego 1) . . . . . . . production site, ware- perpetual usufruct 159,710
houses, storage yard
Stalowa Wola (ul. Kwiatkowskiego 1) . . . . . . . production site perpetual usufruct 26,114
Centrostal
Gdańsk-Kokoszki (ul. Budowlanych 42) . . . . . . warehouses, perpetual usufruct, 66,011
offices ownership 24,300
Branch in Słupsk (ul. Poznańska 1a) . . . . . . . . . warehouses, offices perpetual usufruct 11,245
Branch in Elbla˛g (ul. De˛bowa 1c) . . . . . . . . . . . warehouses, offices perpetual usufruct 20,102
Branch in Olsztyn (ul. Lubelska 32c) . . . . . . . . . warehouses, offices perpetual usufruct 14,835
Branch in Kwidzyń (ul. Żwirowa 4) . . . . . . . . . warehouses, offices perpetual usufruct 4,331
Centrostal Opole
Opole (ul. Wspólna 7) . . . . . . . . . . . . . . . . . . . . warehouses, perpetual usufruct, 27,153
offices ownership
Centrostal Górnośla˛ski
Katowice (ul. Stalowa 2) . . . . . . . . . . . . . . . . . . warehouses, storage yard, perpetual usufruct 122,678
offices
Branch in Brzeg (ul. Cegielniana 9) . . . . . . . . . . warehouses lease 2,260
offices 464
Branch in Strzelce Opolskie (ul.
Gogolińska 2) . . . . . . . . . . . . . . . . . . . . . . . . . warehouses lease 1,468
offices 122.80
Branch in Warka (ul. Puławskiego 39) . . . . . . . warehouses lease 4,320
offices 22
Branch in Żychlin (ul. Narutowicza 72) . . . . . . . warehouses lease 2,418
ZW-WB
Zawiercie (ul. Okólna 10) . . . . . . . . . . . . . . . . . production site perpetual usufruct 62,556
90
Insurance
We have one global insurance policy composed of numerous global coverage and individual asset
coverage policies all held with Hestia S.A. which provides insurance for all of our industrial assets. We maintain
obligatory group insurance policies required by Polish law.
Legal Proceedings
We have been and continue to be the subject of legal and arbitration proceedings and adjudications from
time to time. Neither we nor any of our subsidiaries are the subject of any governmental, legal or arbitration
proceedings (including any proceedings which are pending or threatened of which we are aware), during the
previous 12 months which may have or have had in the recent past, significant effects on our financial position or
Environmental Matters
Our operations are subject to numerous environmental laws and regulations with respect to the protection
of the environment in the countries in which we have production facilities or properties. Examples include laws
and regulations regarding air emissions, discharges to land and water and the handling, transportation and storage
of waste and other hazardous materials. The number of these laws and regulations have increased in recent years,
because of the introduction of the Environmental Protection Law of April 27, 2001 and the Act on Waste
Disposal of April 27, 2001 in Poland and the introduction of similar laws in countries in which we conduct
business. These laws have also become more stringent in the past years and have been more strictly interpreted
by authorities. We anticipate that this trend will continue in the future.
In Poland we are generally required to obtain and have obtained permits and licenses for industrial
operations which cause emissions, discharges or waste. Such permits and licenses generally establish limitations
and standards on the operations that we have to comply with. In addition, we are required to periodically renew
permits and licenses issued for a limited period. Upon renewal, the permits and licenses often contain more
stringent limitations and standards, which can require significant capital expenditure prior to their expiration.
We monitor compliance with applicable environmental laws and regulations and the requirements of our
permits and licenses at each of our businesses through representatives responsible for environmental protection
and waste disposal. These representations are in frequent contact with the relevant authorities and cooperate with
such authorities in monitoring the compliance with environmental laws, regulations, licenses and permits as well
as in the development of new standards or limitations.
To the best of our knowledge, all of our companies are in compliance with current material environmental
laws and regulations. In certain cases where it has been determined that we have exceeded or not complied with
the limitations and standards or more stringent limitations have been issued, we implement measures requested
by regulatory authorities and make investments to achieve compliance.
We make ongoing investments, if necessary, to improve our environmental standards. Our policy is to
comply with applicable laws and to proactively use superior environmental technology. This applies both to new
plants as well as to the adaptation of current plants and includes, for example, the installation of new filters, the
construction of installations for neutralizing contaminated materials and the installation of independent water
circles. Improvements are implemented in coordination with the responsible authorities.
91
MANAGEMENT
The following tables set forth the name, age and position of the members of the executive board (Zarza˛d),
the supervisory board (Rada Nadzorcza) and of the senior management of the Group. The business address of our
members of the executive and supervisory boards and senior management is ul. Zielona 26, 42-360 Poraj. Our
website is www.zlomrex.pl and the information on our website is not part of this Offering Memorandum.
Executive Board
Current members of our executive board are:
Initial
appointment to End of 1
Name Age executive board current term Position
Przemysław Sztuczkowski . . . . . . . . . . . . . . . . . . 40 June 14, 2004 June 30, 2007 President of the Board
Przemysław Andrzej Grzesiak . . . . . . . . . . . . . . . 41 June 14, 2004 June 30, 2007 Vice president
Krzysztof Walarowski . . . . . . . . . . . . . . . . . . . . . . 50 June 14, 2004 June 30, 2007 Member of the Board
Przemysław Sztuczkowski is president of our executive board. He established Przedsie˛biorstwo “Wiedza i
Praca” (formerly Przedsie˛biorstwo Obrotu Surowcami Wtórnymi “Złomrex”), the predecessor of the Company
which specialized in scrap metal trading, in 1990. Mr. Sztuczkowski has also been the vice president of the
executive board of Złomrex-Finans since 2003. Mr. Sztuczkowski is also a supervisory board member of
Ferrostal Łabedy, Centrostal Górnośla˛ski, Nowa Jakość and Złomrex Pruszków. He is also a member of the
executive board of “Armaton” Sp. z o.o. and a member of the board of the “Zda˛żyć na czas” foundation.
Mr. Sztuczkowski is a graduate of a post-secondary school in tourism services (Pomaturalne Studium Obsługi
Ruchu Turystycznego).
Przemysław Andrzej Grzesiak is vice president of our executive board. He has worked at Złomrex since
1990. He is a member of the executive boards of Złomrex-Finans and Ferrostal Łabȩdy. He is also a supervisory
board member of Centrostal Górnośla˛ski, Szopienice, Nowa Jakość and Złomrex Pruszków. Mr. Grzesiak is also
a member of the board of the “Zda˛żyć na czas” foundation. He is a graduate of the Cze˛stochowa Technical
University, the Faculty of Metallurgy, where he majored in thermal power engineering and industrial furnace
construction.
Krzysztof Walarowski is a member of our executive board. Prior to joining the Company in 2004,
Mr. Walarowski was president of the executive board and chief executive officer of Nordkalk Sp z o.o. where he
was responsible for the company’s restructuring and sales. During this time he was also president of the
executive board of Nordkalk Miedzianka S.A. From 1999 to 2000, he was an executive board member and sales
director at Huta Ostrowiec S.A. in Ostrowiec Świe˛tokrzyski where he was co-responsible for the company’s
restructuring program and sales. Previously, he was a member of the executive board and sales director at
Impexmetal S.A., where he was responsible for coordinating and supervising the group’s trading operations,
establishing and supervising of the restructuring program, as well as sales. Mr. Walarowski is also chairman of
the supervisory boards of HSW-HSJ, Centrostal, Centrostal Opole and Centrostal Górnośla˛ski, Ferrostal Łabȩdy
and also of Zbrojarnia. He is a graduate of the Warsaw School of Economics, International Trade Faculty.
Senior Management
Current members of our senior management are:
Date of Term of
Name Age employment employment Position
Krzysztof Zoła . . . . . . . . . . . . . . . . . . . . . . . 34 2002 no fixed term Chief Financial Officer
Waldemar Marek . . . . . . . . . . . . . . . . . . . . . 45 1999 no fixed term Director, Trade Office in
Wrocław
Zenon Tomalak . . . . . . . . . . . . . . . . . . . . . . 51 1999 no fixed term Director, Trade Office in
Wrocław
Dominik Barszcz . . . . . . . . . . . . . . . . . . . . . 30 2000 no fixed term Chief Accountant
Andrzej Sankowski . . . . . . . . . . . . . . . . . . . 67 2004 no fixed term Marketing Director
Marek Lewandowski . . . . . . . . . . . . . . . . . . 58 2006 no fixed term Chief Security Officer
Krzysztof Zoła is our chief financial officer. In 2002, he joined Złomrex as a member of the executive
board responsible for finance and became our chief financial officer. From 1996 to 2002, he was a credit analyst
1 The annual shareholders’ meeting of the Company must take place no later than June 30, 2007 at which
time it will be decided whether to extend the employment terms of the individual members of the
executive board. The Company expects that all terms of employment of the executive board members will
be extended.
92
and member of the credit committee at Kredyt Bank, S.A., Cze˛stochowa branch. He also founded Kapitał, which
is a subsidiary of the Group. Mr. Zoła is the president of the executive boards of Kapitał and Złomrex Pruszkow.
He is also a member of the supervisory board of HSW-HSJ. In addition, Mr. Zoła is a supervisory board member
of Centrostal Górnośla˛ski, Zbrojarnia, Centrostal Opole and AB Stahl. He is a graduate of the Faculty of
Management and Marketing of the Cze˛stochowa Technical University.
Waldemar Marek is a director of our trade office in Wrocław. Mr. Marek is in charge of coordination of
procurement and sales of non-ferrous scrap raw materials and vice chairman of the supervisory board of
Szopienice. He worked previously at Hutmen S.A. in Wrocław where he was head engineer responsible for raw
materials. Mr. Marek holds a Master of Science in Engineering degree from the Higher School of Engineering in
Zielona Góra, with postgraduate studies at the Wrocław School of Economics.
Zenon Tomalak is a director of our trade office in Wrocław. Mr. Tomalak coordinates the procurement of
scrap and non-ferrous metals and is member of the supervisory board of Szopienice. He was previously with
Hutmen S.A. Wrocław as chief trade and marketing specialist. Mr. Tomalak holds a Master of Science and
Engineering degree from Kraków’s Mining and Metallurgy Academy.
Dominik Barszcz is our chief accountant, a position he has held since 2006. Mr. Barszcz joined Złomrex
in 2000, first as an accounting specialist from 2000 to 2002, and he then served as deputy head accountant from
2002 to 2006. He graduated from the School of Economics in 2000 in Katowice.
Andrzej Sankowski is our marketing director. From 1996 to 1997, he worked as a specialist for
Impexmetal S.A. From 1997 to 2001, he headed the New Launches and Profile Bars Sales Bureau at Huta
Zawiercie S.A. In 2002 he worked as an expert adviser in Stalexport S.A. and from 2002 to 2004 he served as
Head of Bars Sales Bureau at CMC Zawiercie S.A. Mr. Sankowski graduated from the Technical University in
Cze˛stochowa in 1961, with the degree of Master of Science in Engineering. He also completed postgraduate
studies in the field of chipless forming at the Metallurgical Department of Cze˛stochowa Technical University.
Marek Lewandowski is our chief security officer. From 1993 to 2001, he was deputy to the Parliament of
the Republic of Poland (Sejm) and a member of its Justice Committee and Administration and Internal Affairs
Committee. From 2001 to 2005, he was department director at the Ministry of Internal Affairs and
Administration. Mr. Lewandowski completed university-level education at the Internal Affairs Academy in
Warsaw at the law and administration faculty and post-graduate studies in philosophy.
Supervisory Board
The current members of the supervisory board are:

Initial
appointment to End of
Name Age supervisory board current term Position
Hubert Andrzej Janiszewski . . . . . . . . . . . 62 June 14, 2004 December 31, 2007 Chairman of the
supervisory board
Piotr Jerzy Freyberg . . . . . . . . . . . . . . . . . 64 June 15, 2004 December 31, 2007 Member of the
supervisory board
Jerzy Jan Kak . . . . . . . . . . . . . . . . . . . . . . 53 June 14, 2004 December 31, 2007 Member of the
supervisory board
Marek Rocki . . . . . . . . . . . . . . . . . . . . . . . 53 December 3, 2004 December 31, 2007 Member of the
supervisory board
Zbigniew Łapiński . . . . . . . . . . . . . . . . . . 39 May 16, 2005 December 31, 2007 Member of the
supervisory board
Hubert Andrzej Janiszewski is chairman of our supervisory board. From 1999 to 2002, he was a member
of the executive board of Deutsche Bank Polska S.A and a managing director at Deutsche Bank AG in London.
From 1998 to 1999, he was a manager director at Bankers Trust Co. in London and from 1992 to 1998 he was
president of the executive board of HSBC Financial Services. He is currently the chairman of the supervisory
boards of DB Securities S.A. and Elstar Oils S.A., deputy chairman of the supervisory boards of Deutsche Bank
PBC S.A. and PGF S.A. and a member of the supervisory boards of Deutsche Bank Polska S.A., MCI
Management S.A. and Polmos Lublin S.A. He was also a member of the supervisory boards of Netia S.A.,
Unimil S.A. He received a masters degree in economics from the Prague University of Economics and the
Warsaw School of Economics and a doctorate in economics from the Warsaw University of Technology.
93
Piotr Jerzy Freyberg is a member of our supervisory board. He is currently chief executive officer of 3M
Poland Sp. z o.o., a position he has held since 1992. From 1986 to 1991, he worked at the Ministry of Foreign
Economic Cooperation in Poland during which he served as Poland’s permanent representative at GATT. He is
not a member of any other supervisory boards. Mr. Freyberg received a masters of economics from the
International Trade Faculty at the Warsaw School of Economics and a doctorate in economics.
Jerzy Jan Kak is a member of our supervisory board. He is currently president of the executive board and
chief executive officer at Elektrownia Polaniec S.A., a position he has held since 2002. From 2000 to 2002, he
was president and chief executive officer of Huta Szkla Ujście Sp. z o.o. He is not a member of any other
supervisory boards. Mr. Kak received a masters degree in economics from the Faculty of Economics of
Production at the Poznań University of Economics.
Marek Rocki is a member of our supervisory board. He is currently rector of the Warsaw School of
Economics, a position he had held since 1999. Mr. Rocki has also held a number of other positions at the Warsaw
School of Economics, including dean of diplomatic studies and professor of information technology. Mr. Rocki
is a member of the supervisory boards of Bank Millenium, HOOP S.A. and Febryka Mebli Forte S.A. Mr. Rocki
received a masters degree in economics from the Faculty of Finance and Statistics of the Warsaw School of
Economics and a doctorate in economics from this university.
Zbigniew Łapiński is a member of our supervisory board. Zbigniew Łapiński has a master of science in
economy degree from the Foreign Trade Faculty of the Warsaw School of Economics. From 1996 to 2001 he was
an equity exchange analyst at Creditanstalt Securities and Deutsche Bank. From 2001 to 2004 he held a position
of deputy chief financial officer at Netia S.A., later becoming a member of the management board and chief
financial officer. Since 2004 Mr. Łapiński is a member of supervisory boards of Śnieżka S.A. and Unimil S.A.
Executive Compensation
Executive Board
Each member of our executive board has a management contract with Złomrex under which each member
is compensated based on a fixed salary. The salary of one executive board member may not exceed a certain
percentage of the Company’s gross profit for the relevant period. In addition, one member of the executive board
is entitled to an annual bonus of 1% of the net profit of the Group’s consolidated audit financial statement paid in
the following fiscal year. For the year ended December 31, 2005, the aggregate compensation paid to the
members of the executive board was PLN 4.0 million (€1.0 million). In 2004 and 2005, members of the
executive board did not receive any additional compensation or other benefits as a result of their positions in
executive boards or supervisory boards of the Company’s subsidiaries.
Senior Management
Members of our senior management are compensated on the basis of a fixed salary plus a bonus which is
based upon a percentage of salary, payable upon the achievement of certain profit targets.
Supervisory Board
Each member of the supervisory board receives a fixed annual compensation determined at the
shareholders’ meeting. In addition, the shareholders’ meeting specifies the amount of remuneration for the
supervisory board members delegated to perform the individual supervision. For the year ended December 31,
2005, the aggregate compensation paid to members of the supervisory board of the Company was PLN 313,000
(€78,643.2).
Interest of Executive Board and Supervisory Board in Unusual Business Transactions and Outstanding
Loans to Members of Executive Board
We are not aware of any interests of the members of the executive board and supervisory board in
unusual business transactions with the Company.
We have one outstanding loan to Mr. Przemysław Sztuczkowski conducting business activity as
Przedsiȩbiorstwo Obrotu Surowcami Wtórnymi “Złomrex” dated June 13, 2004 for PLN 6.5 million (€1.6
million). The repayment date is July 31, 2008. The loan is to be repaid in 45 monthly installments of
94
PLN 100,000 (€25,126) each. The balance outstanding as of September 30, 2006 amounts to PLN 4.7 million
(€1.2 million). The annual interest rate is 8%. The Company has taken security in relation to the outstanding
amount of this loan over fees originating from a management services agreement between Mr. Sztuczkowski and
the Company, dated April 30, 2004 and a services agreement between Mr. Sztuczkowski and the Company dated
January 2, 2003.
Management/Employee Stock Option Plans

We do not currently have any management or employee stock option or incentive plans for our
management or our employees.
Corporate Governance
We have a three-tier management structure, consisting of an executive board, supervisory board and a
shareholders’ meeting.
Day-to-day management of the Company is vested in the executive board, which represents the Company
externally. The Company is represented by the president of the executive board acting individually, the vice
president acting individually, two executive board members acting jointly or one executive board member acting
jointly with the proxy holder (prokurent). Executive board resolutions are passed by an absolute majority vote.
The president of the executive board has the casting vote.
The supervisory board is vested with the authority to supervise the business of the Company. Although
the supervisory board does not actively manage the Company, the Company’s articles of association together
with the supervisory board’s rules of procedure, require the consent of the supervisory board before the executive
board takes certain actions.
In particular, the Supervisory Board has the following authority to:
Š appoint and remove members of the executive board;
Š review the Company’s financial statements, Directors’ Report on the Company’s business activities
and the Executive Board’s recommendations on the distribution of profits and the coverage of losses;
Š select the chartered auditor for the Company;
Š determine the rules governing executive board compensation;
Š approve the rules of procedure of the executive board and Company rules of organization;
Š consent to the Company’s purchase and disposal of real estate for a price exceeding PLN 500,000
(€125,628); and
Š approve the Company’s financial plan prepared by the executive board.
The supervisory board’s resolutions are passed by absolute majority vote. The president of the
supervisory board has a casting vote.
The shareholders’ meeting approves financial statements and appoints and dismisses the supervisory
board members. The shareholders’ meeting also decides on the sale of the Company’s businesses. As a general
rule, resolutions are passed by an absolute majority vote.
95
PRINCIPAL SHAREHOLDERS
The table below stets forth certain information regarding the ownership of the Company as of
September 15, 2006 according to the Company’s excerpt from the register of entrepreneurs.
Number of Percentage of
Shareholder Shares Shares
Przemysław Sztuczkowski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,691,000 100%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,691,000 100%
96
RELATED PARTY TRANSACTIONS
In the course of our ordinary business activities, we or members of our executive board have entered into
agreements with or render services to related parties.We believe that all transactions with affiliated companies
and persons including companies with which our management board or supervisory board members are affiliated
are negotiated and conducted on a basis equivalent to those that would have been achievable on an arm’s length
basis, and that the terms of these transactions are comparable to those currently contracted with unrelated third-
party suppliers, manufacturers and service providers. Set forth below is summary of material transactions
between or among us and related parties:
Transactions between Group Companies and Executive Board Members

Š Under a management services agreement dated April 30, 2004, Przemysław Sztuczkowski agreed to
provide administrative and management services to Złomrex. The quarterly agreed remuneration for
Mr. Sztuczkowski is PLN 450,000 (€113,065.3). However, this remuneration is limited to no more
than 10% of Złomrex’s gross income for the relevant period. As of September 30, 2006, there was no
outstanding balance under this agreement.
Š Under a management services agreement dated April 30, 2004, Przemysław Grzesiak agreed to
provide administrative and management services to Złomrex. The monthly gross remuneration is PLN
150,000 (€37,688.4). As of September 30, 2006, there was no outstanding balance under this
agreement.
Š Under a loan agreement dated June 13, 2004, Złomrex granted to Przemysław Sztuczkowski
conducting business activity as Przedsie˛biorstwo Obrotu Surowcami Wtórnymi “Złomrex” (currently
Przedsie˛biorstwo “Wiedza i Praca”) a loan in the amount of PLN 6.5 million (€1.6 million). The
annual interest rate is 8.0%. The loan is to be repaid by July 31, 2008 in 45 monthly installments of
PLN 100,000 (€25,125.6) each. As of September 30, 2006, the outstanding balance was PLN 4.7
million (€1.2 million).
Š Under a management services agreement between Ferrostal Łabȩdy and PRYMKO Krzysztof
Walarowski on January 26, 2004, Mr. Walarowski agreed to provide management training and
advisory services to Ferrostal Łabȩdy. Mr. Walarowski is paid PLN 240,000 (€60,302) annually for
these services. This management services agreement expires on January 26, 2009.1 As of September
30, 2006, the outstanding balance was PLN 24,400 (€6,130).
Š Under a management services agreement between ZW-WB and PRYMKO Krzysztof Walarowski on
January 26, 2004, Mr. Walarowski agreed to provide management training and advisory services to
ZW-WB. Mr. Walarowski is paid PLN 240,000 (€60,301) annually for these services. This
management services agreement expires on January 26, 2009.1 As of September 30, 2006, the
outstanding balance was PLN 24,400 (€6,131).
Š In 2002 and 2003, Złomrex granted Armaton Polska Sp. z o.o. with its registered office in Opole
(“Armaton”) four loans for a total amount of PLN 810,000 (€203,517) to be repaid by December 31,
2012 or December 31, 2013. The interest rate is 0.9% monthly. Armaton is controlled by Przemysław
Sztuczkowski. According to an oral representation from Złomrex, Armaton is in the process of being
liquidated. Under Polish law, Armaton can be only liquidated if it repays all loans. As of September
30, 2006, the outstanding balance was PLN 410,000 (€103,015).
Intercompany Transactions within the Group

Š Złomrex and Ferrostal Łabȩdy entered into a finance leasing agreement dated December 31, 2004.
Under the agreement Złomrex gave Ferrostal Łabȩdy production equipment for use in Gliwice with a
total value of PLN 28.0 million (€7.0 million) for 96 months, until December 2012. The monthly
installment is 1.36% and the total amount of lease installments is 140.48% (PLN 39.3 million (€9.9
million)). As of September 30, 2006, the outstanding balance was PLN 23.8 million (€6.0 million).
Š HSW-HSJ and HSJ-WB entered in 2006 into agreements with Kapitał under which Kapitał discounts
promissory notes owned by HSW-HSJ and HSW-WB and issued by HSW-HSJ’s and HSW-WB’s
debtors. The promissory notes in question are used by the debtors of HSW-HSJ and HSW-WB to
1 In addition to the above two management services agreements, Mr. Walarowski provides additional
training services to management of both Ferrostal Łabȩdy and ZW-WB for approximately PLN 100,000
(€25,125) annually which are not covered by these agreements. As of September 30, 2006, there was no
outstanding balance under this agreement.
97
settle their obligations resulting from agreements on sale of goods delivered by HSW-HSJ and
HSW-WB. The total maximum financial engagement of Kapitał resulting from acquiring the
promissory notes cannot exceed PLN 2.0 million (€0.5 million) for HSW-HSJ and PLN 6.0 million
(€1.5 million) for HSJ-WB. As of September 30, 2006, the outstanding balance was PLN 920,915
(€231,386)
Š According to an agreement entered into between Złomrex and ZW-WB on March 1, 2005, ZW-WB
may provide rolling services exclusively to Złomrex. Consideration paid by Złomrex to ZW-WB is
calculated based on the total of ZW-WB’s production costs plus a 12% margin. As of September 30,
2006, there was no outstanding balance under this agreement.
Š Under a loan agreement dated November 15, 2006, HSW-HSJ S.A. granted Złomrex S.A. a loan in the
amount of PLN 5 million (€1.3 million). The loan bears interest at a rate of 6-month WIBOR plus a
margin of 1% per annum. As security, Złomrex issued a blank promissory note. The amount of the
loan must be repaid by January 15, 2007.
Š Under a loan agreement dated August 8, 2005, Złomrex granted Nowa Jakość a loan in the total
amount of PLN 3.9 million (€1.0 million). The loan bears interest at a rate of one-month WIBOR plus
a margin of 2% per annum. There are no financial covenants in this loan agreement nor does the
Złomrex or any of its subsidiaries provide any security under this agreement. The loan is granted for
an indefinite period of time. Both parties have the right to terminate the agreement upon one month’s
prior notice. As of September 30, 2006, PLN 1.5 million (€376,884) had been drawn down.
Š According to two additional loan agreements, Złomrex also granted Złomrex-Finans and Złomrex-
Zbrojarnia loans totalling PLN 210,000 (€50,000). There are no financial covenants in this loan
agreement nor does the Company or any of its subsidiaries provide any security under this agreement.
Š According to an agreement between Złomrex S.A. and Ferrostal Łabȩdy dated January 1, 2005,
Ferrostal Łabȩdy will process scrap metal supplied by Złomrex. Consideration paid by Złomrex to
Ferrostal Łabȩdy is calculated based on the total of Ferrostal’s production costs plus a 12% margin.
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SUBSIDIARIES
The following provides a description of our subsidiaries including voestalpine Stahlhandel GmbH and its
subsidiaries upon consummation of the Austrian Acquisition.
The Company’s Subsidiaries

Zlomrex International Finance S.A., the Issuer of the Notes, is a société anonyme organized under the
laws of France. Zlomrex International Finance S.A. was incorporated on October 23, 2006 with the Registry of
Commerce of Evry under number 492 535 737 under the corporate name Złomrex France S.A. and its registered
office is at 48, boulevard de Coquibus, BP-97, 91003 Evry. Zlomrex International Finance S.A.’s share capital
amounts to €225,000. On January 6, 2007, a general meeting of the shareholders approved changing the
corporate name of the Issuer from Złomrex France S.A. to Zlomrex International Finance S.A.
Ferrostal Łabe˛dy
Ferrostal Łabe˛dy is a manufacturing plant located in Gliwice. It consists of two divisions (i) steelworks
with a production capacity of 400,000 tonnes of steel per year and (ii) a rolling mill with a production capacity of
approximately 100,000 tonnes of finished products. The steelworks manufacture rectangular billets (165 x 140
mm), square billets (with sizes of 100, 120, 140, 160 mm) and round billets (170 mm diameter) made of carbon
steel, specialty steel and part-alloy steel. The rolling mill manufactures smooth rods plain and reinforced bars
(with diameters of 8 to 16 mm). Production is conducted exclusively based on processing orders at the steelworks
using feedstock scrap provided by the Company and at the rolling mill using the steel billets manufactured by the
steelworks.
Ferrostal Łabe˛dy has been consolidated within the Group since March 2004.
ZW-WB
ZW-WB is a manufacturing plant located in Zawiercie with a maximum production capacity of 180,000
tonnes per year. It manufactures products exclusively to the Company’s orders using raw materials supplied by
the Company. The manufacturing plant rolls/mills steel billets into finished products. ZW-WB produces flat bars
and round and square bars made of carbon and special steels. The Company is the main material supplier of raw
materials for ZW-WB.
ZW-WB has been consolidated within the Group since January 2005.
Szopienice
Szopienice is based in Katowice and manufactures finished products and semi-finished products
composed of non-ferrous metal alloys. Its product range includes solid rods, hollow rods and steel sections of
bronze and brass, rolled Zinc anodes, cast Zinc alloys, Zinc and aluminum primary alloys.
Szopienice has been consolidated within the Group since August 2004.
Nowa Jakość
Nowa Jakość is a recycling organization focusing on recycling paper (80% of business), plastics (15% of
business) and other waste materials such as glass (5% of business). EU regulations require companies which
produce certain types of recyclable waste to pay a product fee based on the treatment and recycling of that waste.
Nowa Jakość enters into arrangements with those companies to collect and treat such recyclable waste on behalf
of the companies. It is currently expanding its warehouse facilities based on the Company’s network of scrap
branches and has its own vehicle fleet, reloading facilities and machinery. It was founded in 2004.
Nowa Jakość has been consolidated within the Group since July 2004.
Złomrex-Finans
Złomrex-Finans engages in debt collection, compensation payments and claims trading. Złomrex-Finans’
activities were suspended in 2003 and it is in the process of being wound up.
HSW-HSJ
HSW-HSJ is located in Stalowa Wola and consists of two divisions: (i) steelworks with a production
capacity of approximately 250,000 tonnes of steel per year and (ii) two rolling mills with a production capacity
of approximately 242,000 tonnes of billets/bars per year. The steelworks manufactures slabs (dimensions
130/800, 180/800) and blooms (270/300 mm) made of specialty and alloy steel. HSW-HSJ’s rolling mill
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produces square billets (with sides of 80 to 120 mm), round bars (diameters of 55 to 120 mm) and peeled bars
(diameter of 55 to 115 mm). As of result of its merger with HSW-WB in November 2006, HSW-HSJ now
manufactures steel plates (10-30 mm thick, 800 to 2000 mm wide and up to 6 meters long) made of a full range
of steel types.
HSW-HSJ has been consolidated within the Group since February 2006.
Centrostal Górnośla˛ski is a leader in retail sales of metallurgical products in the Sla̧skie Voivodship. It
sells products through a network of five warehouses in Katowice, Brzeg, Strzelce Opolskie, Warka and Żychlin.
Centrostal Górnośla˛ski has been consolidated within the Group since March 2006.
Centrostal
Centrostal is a leader in retail sales of metallurgical products in the Pomorskie Voivodship.
Centrostal is composed of a central warehouse located in the Company’s registered office in Gdansk and local
branches located in Słupsk, Olsztyn, Warsaw and Elbla˛g. Centrostal’s product range with regard to metallurgical
products includes in particular sheets, pipes and tubes, rods, band, hot-rolled sections, cold-bent sections, stainless and
acid-proof steel products, as well as aluminum and copper products. Centrostal offers a full range of wholesale-related
services connected with the packaging and processing of metallurgical products, including cutting hot-rolled sheet and
sections, cutting cold-rolled sheet from reels to designated size, manufacturing cold-bent bands and sections and
construction reinforcements. Centrostal is listed on the Warsaw Stock Exchange.
Centrostal has been consolidated within the Group since August 2006.
Centrostal Opole
Centrostal Opole is a local retail seller, operating a warehouse of metallurgical products in Opole.
Centrostal Opole has been consolidated within the Group since July 2006.
Złomrex China
Złomrex China is engaged in international trade in steel products and raw materials for metallurgical
products. The Company plans to import via Złomrex China up to 100,000 tonnes of steel products including hot,
cold and galvanized sheets as well as other products such as electrodes, refractory materials and ferrol alloys.
Złomrex China has been consolidated within the Group since March 2006.
Kapitał
Kapitał has operated in the financial services market since 1999. It provides billing discount and factoring
services.
Kapitał has been consolidated within the Group since January 2006.
AB Stahl
AB Stahl trades in steel scrap throughout Germany.
AB Stahl has been consolidated within the Group since August 2006.
Złomrex Pruszków
Złomrex Pruszków was founded in March 2003 to construct a scrap shredder line using European Union
aid funds.
Złomrex Pruszków has not been consolidated within the Group.
Złomrex Zbrojarnia
Złomrex Zbrojarnia joined the Group in May 2006. Zbrojarnia is a service center producing prefabricated,
customized construction industry elements from concrete steel for use in the construction of foundations, floors,
heads and other building components.
Zbrojarnia has been consolidated within the Group since May 2006.
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CKM “Włókniarz”
Cze˛stochowski Klub Motocyklowy “Włókniarz” S.A. was founded on October 23, 2006. The company’s
purpose is to invest in, develop and promote speedway racing.
Subsidiaries of voestalpine Stahlhandel GmbH

voestalpine Stahlhandel GmbH, headquartered in Linz, Austria, is the leading warehousing and steel
distribution company in Austria and one of the leading warehousing and steel distribution companies in Central
and Eastern Europe. voestalpine Stahlhandel GmbH serves as holding company for a number of subsidiaries in
Eastern Europe and as warehousing steel distributor for the Austrian market (with the exception of certain key
clients of voestalpine Stahl GmbH — its former main shareholder). voestalpine Stahlhandel GmbH maintains
warehouses at several locations in Austria (Linz, Graz, Vienna and Innsbruck). The product range available at
warehouses includes steel bars and sections, heavy plates and thin sheets, light-gauge open and closed profiles,
circular tubes, stainless structural steels, non-ferrous metals (aluminium) and welding fillers.
voestalpine Stahlhandel GmbH and certain of its subsidiaries are expected to be consolidated within the Group
as of the closing of the Austrian Acquisition.
Selected subsidiaries of voestalpine Stahlhandel GmbH include:
Neptun Stahlhandel GmbH

Neptun Stahlhandel GmbH (“Neptun”), headquartered in Vienna, is together with its subsidiaries the
leading reinforcement steel trader in Austria. Neptun has subsidiaries in Linz, Graz and Klagenfurt. Its product
range comprises, besides reinforcement steel, iron and steel wire, industry, forest and lift cables, cable
accessories and chains. The Neptun group has a total warehouse surface of 34,055 sqm.
Köllensperger Stahlhandel GmbH & Co. KG

Köllensperger Stahlhandel GmbH & Co. KG (“Köllensperger”) is the market leading steel distributor in
Tyrol, Austria with a total warehouse surface of 11,200 sqm. voestalpine Stahlhandel GmbH owns 60% of the
share capital. The other shares are owned by the Köllensperger family. Köllensperger sells rod and section steel
bars, cut plates and corrugated iron, zinced cut plates and cold-coated coils, perforated sheets, hollow-section
steel and stop pipes.
VASTAD Edelstahl Handels GmbH

VASTAD Edelstahl Handels GmbH is a 50% joint venture with TAD Group with access to Italian
producers. The product range comprises flat and long products, shaped parts, welding materials for stainless steel
and TIG welded pipes and fittings. The company has 5,005 sqm. of total warehouse surface.
voestalpine Stahlhandel spol. s.r.o.

voestalpine Stahlhandel spol. s.r.o., is the largest foreign steel trader in the Czech Republic with its own
pre-processing facilities for long and flat products. The company was founded in 1992. It sells high quality
plates, hot and cold-rolled hollow-sections, wide-flanged beams, quarto plates and long products and operates a
total warehouse surface of 24,090 sqm.
voestalpine Stahlhandel Polska Sp. z.o.o.

voestalpine Stahlhandel Polska Sp. z o.o. distributes cold-rolled hollow-sections, wide-flanged beams,
heavy plate and special qualities of Alform, Durostat. The warehouse capacity of currently 4,500 sqm. will be
significantly expanded in the next business year.
voestalpine Stahlhandel Budapest Kft.

voestalpine Stahlhandel Budapest Kft., Budapest, distributes a wide product range including beams (IPE,
INP, UNP), wide-flanged beams, cold-rolled HS, concrete reinforcing steel and alloyed and high-alloyed plates.
The company currently has no warehouse. A new warehouse is planned for the location Györ. Such warehouse
shall also be used for distrubuting products to southern Austria.
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VETING voestalpine d.o.o.
VETING voestalpine d.o.o. in Croatia trades concrete reinforcing steel, wire, hot and cold-rolled plates
and zinced plates and operates a total warehouse surface of 4,880 sqm. The company was acquired in 2000.
voestalpine ambient Stahlhandel srl

voestalpine ambient Stahlhandel srl, Romania, is 51%-owned by voestalpine Stahlhandel GmbH and 49%
by a local individual. The warehouse in Sibiu (6,700 sqm) has been in use since August 2006. The company
plans pre-processing facilities for long and flat products.
voestalpine Stahlhandel trgovina zjeklom d.o.o. (Slovenia)

voestalpine Stahlhandel d.o.o. distributes steel products in Slovenia and has no warehousing operations.
voestalpine Stahlhandel Slowakei s.r.o.

voestalpine Stahlhandel Slowakei s.r.o. distributes steel products in Slovakia and has no warehousing
operations.
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DESCRIPTION OF OTHER INDEBTEDNESS
The following is a description of our material indebtedness. The description does not purport to be complete
and is qualified in its entirety by reference to the agreements which set forth the principal terms and conditions.
As of September 30, 2006, we had PLN 420.9 million (€105.8 million) of outstanding interest bearing
debts. We will use a portion of the proceeds of this Offering to pay off all of our outstanding interest bearing
indebtedness except for our factoring agreements with GMAC Commercial Finance Sp. z o.o., ING Commercial
Finance S.A. and BRE Bank S.A. agreements, our outstanding loan agreements with the National Fund and our
obligations under various leasing agreements and discount promissory note agreements and certain bank
indebtedness of Centrostal and Centrostal Górnośla˛ski, each as described below. In addition, we will enter into
one or more Revolving Credit Facilities described below prior to, or after, the consummation of this Offering.
See “Use of Proceeds”.
Revolving Credit Facilities

We will enter into one or more revolving credit facilities with certain Polish banks in an estimated
aggregate amount of up to €40 million. We have entered into an agreement with Fortis Bank Polska S.A. (the
“Fortis Agreement”) and have offers from BRE Bank S.A. (the “BRE Bank Offer”) and Bank BPH S.A. (the
“Bank BPH Offer”) providing binding commitments for an aggregate amount of borrowings of approximately
€60.0 million.
Under the Fortis Agreement, PLN 76.6 million (€19.2 million) will be made available under a credit
facility with an interest rate of 0.8% over WIBOR. The Fortis Agreement contains financial covenants including
a net debt to EBITDA ratio of no higher than 3.5 (with the first test of compliance on and for the period ended
September 30, 2007), EBITDA to interest ratio not less than 2 to 1 (or the level of such ratio in the Indenture
which is 2.25 to 1), a solvency ratio no lower than 20% in 2007 and 25% in 2008 and a security package
consisting of an assignment of receivables of the Company of PLN 30.0 million (€7.5 million) per month and a
pledge of inventories of the Company of PLN 50 million (€12.6 million).
Under the BRE Bank Offer, PLN 72.2 million (€18.1 million) would be made available under a credit
facility with an interest rate of 1.1% over WIBOR. The BRE Bank Offer contains financial covenants including a
current liquidity ratio of no lower than 1, a net profit margin of not lower than 2%, revenues of the Company
being no lower than PLN 100.0 million (€25.1 million) on a monthly basis and a security package consisting of
an assignment of receivables of the Company of PLN 39.0 million (€9.8 million), a pledge of inventories of the
Company of PLN 52 million (€13.1 million), and a secured cash deposit on bills of exchange of PLN 6.3 million
(€1.6 million).
Under the Bank BPH Offer, PLN 80.0 million (€20.1 million) would be made available under a credit
facility with an interest rate of 0.9% over WIBOR. The Bank BPH Offer has no financial covenants but contains
a security package consisting of an assignment of receivables of the Company of PLN 64.0 million (€16.1
million) and a pledge of inventories of the Company of PLN 64.0 million (€16.1 million).
Factoring Agreements
We have entered into factoring agreements with GMAC Commercial Finance Sp. z o.o., ING
Commercial Finance S.A. and Pekao Factoring Sp. z o.o. The purpose of the factoring agreements is to improve
our cash flow by selling our accounts receivables to factoring companies in exchange for cash. Our factoring
agreements do not contain any restrictive covenants.
GMAC Factoring Agreement

On August 23, 2004, we entered into a PLN 22.5 million (€5.7 million) factoring agreement with GMAC
Commercial Finance Sp. z o.o. (“GMAC Commercial Finance”) (the “GMAC Factoring Agreement”). As of
September 30, 2006, PLN 13.4 million (€3.4 million) had been drawn down under the GMAC Factoring
Agreement.
The GMAC Factoring Agreement bears interest at a one-month WIBOR rate plus a margin ranging from
1.4% to 2.0% per annum and includes a factoring commission ranging from 0.2% to 0.3%. Under the terms of
the GMAC Factoring Agreement, the principal amount under the GMAC Factoring Agreement will be repaid by
August 31, 2007.
Security
As security for the GMAC Factoring Agreement, we have issued a blank promissory note to GMAC
Commercial Finance for any unpaid obligations under the GMAC Factoring Agreement and granted a power of
attorney to GMAC Commercial Finance to our bank accounts for this purpose.
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ING Factoring Agreement
On December 4, 2002, we entered into a PLN 35.0 million (€8.8 million) factoring agreement with ING
Commercial Finance S.A. (“ING Commercial Finance”) (the “ING Factoring Agreement”). As of September 30,
2006, PLN 23.3 million (€5.9 million) had been drawn down under the ING Factoring Agreement.
The ING Factoring Agreement bears interest at a one-month WIBOR or EURIBOR rate plus a margin of
2.5% per annum and includes a factoring commission ranging from 0.27% to 0.9%. The ING Factoring
Agreement has an unlimited duration.
Security
As security for the ING Factoring Agreement, we have issued a blank promissory note to ING
Commercial Finance for any unpaid obligations under the ING Factoring Agreement and pledged our inventories
in Poznań, Gorzów Wielkopolski, Katowice, Ruda Śla˛ska, Gliwice and Legnica in an aggregate amount not to
exceed PLN 12.0 million (€3.0 million).
Pekao Factoring Agreement

On June 22, 2005, Ferrostal Łabe˛dy entered into a PLN 4 million (€1.0 million) Factoring Agreement
with Pekao Factoring Sp. z o.o (the “Pekao Factoring Agreement”). As of September 30, 2006, PLN 3.4 million
(€0.85 million) had been drawn down under the Pekao Factoring Agreement.
The Pekao Factoring Agreement bears interest at a one-month WIBOR rate plus a margin of 1.4% per
annum. The Pekao Factoring Agreement has an unlimited duration.
Security
As security for the Pekao Factoring Agreement, Ferrostal Łabe˛dy issued a promissory note. The
promissory note is guaranteed by the Company. In addition, the Company has issued a power of attorney to
Pekao for the account of Ferrostal Łabe˛dy maintained at Pekao’s branch in Gliwice.
NFOŚ Facilities
Some of our subsidiaries are parties to the following loan agreements with the National Fund.
Assignment Agreement
As a result of an inter-company debt assignment agreement between Huta Łabe˛dy S.A. and Elstal Łabe˛dy
Sp. z o.o. on May 14, 2002 and a merger between Elstal Łabe˛dy Sp. z o.o. and Ferrostal Sp. z o.o. in 2003,
Ferrostal Łabe˛dy became a party to a PLN 35.0 million (€8.8 million) loan agreement with the National Fund
(the “Assignment Agreement”). Proceeds from the Assignment Agreement were used to finance investments in
fixed assets in our subsidiaries and to improve environmental standards at those facilities. As of September 30,
2006, PLN 23.3 million (€5.9 million) had been drawn down under the Assignment Agreement.
The Assignment Agreement bears interest at 50% of the Rediscount National Bank of Poland base rate.
Under the terms of the Assignment Agreement, the principal amount under the Assignment Agreement must be
repaid by December 31, 2010.
The Assignment Agreement does not contain any restrictive covenants.
HSW Loan Agreement

On April 20, 2006, HSW-HSJ entered into a PLN 3.7 million (€0.9 million) loan agreement with the
National Fund. Proceeds from the HSW Loan Agreement were used to finance investments in fixed assets at
HSW-HSJ and to improve environmental standards at HSW-HSJ. As of September 30, 2006, PLN 3.7 million
(€0.9 million) had been drawn down under the HSW Loan Agreement.
The HSW Loan Agreement bears interest at 80% of the Rediscount National Bank of Poland base rate but
not less than 3.8% per year. Interest is repaid monthly. Under the terms of the HSW Loan Agreement, the
principal amount of the HSW Loan Agreement must be repaid by June 30, 2011.
The HSW Loan Agreement does not contain any restrictive covenants.
Security and Guarantees

As security for the HSW Loan Agreement, HSW-HSJ has pledged eleven pieces of moveable equipment,
assigned various rights under insurance policies and issued a promissory note guaranteed by us up to an amount
of PLN 3 million (€0.8 million).
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HSW-WB Loan Agreement
On August 18, 2005, HSW-WB entered into a PLN 694,650 (€174,535) loan agreement with the National
Fund. Proceeds from the HSW-WB Loan Agreement were used to finance investments in fixed assets at HSW-WB
and to improve environmental standards at HSW-WB. As of September 30, 2006, PLN 612,650 (€153,932) had
been drawn down under the HSW-WB Loan Agreement.
The HSW-WB Loan Agreement bears interest at 70% of the Rediscount National Bank of Poland base
rate but not less than 4% per year. Interest is repaid quarterly. Under the terms of the HSW-WB Loan
Agreement, the principal amount of the HSW-WB Loan Agreement must be repaid by June 30, 2011.
The HSW-WB Loan Agreement does not contain any restrictive covenants.
Security and Guarantees

The HSW-WB Loan Agreement is guaranteed by BRE Bank S.A. in an amount up to PLN 216,900
(€54,497). As security for its guarantee, HSW-WB has granted BRE Bank S.A. a pledge over certain equipment
used for its business activity and a cash deposit in an initial amount of PLN 458,000 (€115,075).
Leasing Agreements
We have entered into a number of leasing agreements for equipment and vehicles totalling PLN 37.6
million (€9.4 million) as of September 30, 2006. We have guaranteed certain leasing agreements of our
subsidiaries Ferrostal Łabe˛dy and Nowa Jakość and Złomrex Zborjarnia.
Promissory Note Agreements

GMAC Commercial Finance Sp. z o.o.
On March 22, 2006 and August 10, 2006, respectively, we entered a PLN 8.0 million (€2.0 million)
promissory note discount agreement which was reduced to PLN 7.0 million (€1.8 million) and a PLN 3.0 million
(€0.8 million) promissory note discount agreement with GMAC Commercial Finance. The purpose of these
agreements is to finance promissory notes we receive from our customers in order to permit our customers to
extend the repayment of their outstanding trade liabilities with us. The discount interest rate of the March 22,
2006 agreement and August 10, 2006 agreement, respectively, is WIBOR plus 2% and WIBOR plus 1.5% and
2%. As of September 30, 2006, we had drawn down PLN 6.3 million (€1.6 million) and PLN 1.7 million
(€0.4 million) under the March 22, 2006 and August 10, 2006 agreements, respectively.
There are no financial covenants in either agreement and neither the Company nor any of its subsidiaries
provide any security under these agreements.
The March 22, 2006 agreement and August 10, 2006 agreement terminate on March 31, 2007 and August
31, 2007, respectively.
Centrostal Credit Agreements

Centrostal
Bank Pekao Credit Agreement I
On November 10, 1998, we entered into a PLN 14.2 million (€3.6 million) credit agreement with Bank
Polska Kasa Opieki S.A. (“Bank Pekao”). The purpose of this agreement is for general working capital purposes.
The loan bears interest at a one-month WIBOR rate plus a margin of 1.5% per annum. As of September 30, 2006,
we had drawn down PLN 14.2 million (€3.6 million) under this agreement.
This agreement terminates on January 31, 2007.
Security
As security for this agreement, we pledged certain real estate and inventories (the value of the inventories
totaled PLN 14.0 million (€3.5 million)).
Bank Pekao Credit Agreement II

On December 22, 1998, we entered into a PLN 7.6 million (€1.9 million) credit agreement with Bank
Pekao. The purpose of this agreement is for general working capital purposes. The loan bears interest at a one-
month WIBOR rate plus a margin of 1.8% per annum. As of September 30, 2006, we had drawn down PLN (4.9)
million (€1.2 million) under this agreement.
This agreement terminates on December 31, 2008.
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Security
As security for this agreement, we pledged inventories totalling PLN 15.0 million (€3.8 million).
Bank Pekao Credit Agreement III

On November 24, 2005, we entered into a PLN 5.0 million (€1.3 million) credit agreement with Bank
Pekao. The purpose of this agreement is for general working capital purposes. The loan bears interest at a one-
month WIBOR rate plus a margin of 3.4% per annum. As of September 30, 2006, we had drawn down PLN (1.8)
million (€0.5 million) under this agreement.
This agreement terminates on January 30, 2008.
Security
As security for this agreement, we assigned receivables and insurance policies.
Powszechna Kasa Oszczȩdności Bank Polski S.A. Credit Agreement IV

On January 2, 2004, we entered into a PLN 650,000 (€163,317) credit agreement for the purpose of
financing the purchase of cutting and bending machinery. This agreement expires on December 31, 2008. As of
September 30, 2006, we had drawn down PLN 0.3 million (€0.1 million).
Volkswagen Bank Polska S.A.

In June and October 2006, we entered into two credit agreements with Volkswagen Bank Polska S.A.
(“Volkswagen”) for PLN 34,400 (€8,643) with interest rates of 8.6% and 8.8%, respectively, for the purchase of
two automobiles. As security, the Company assigned to Volkswagen its ownership right in the automobiles. We
and our subsidiaries may from time to time enter into similar facilities.
On April 26, 2006, we entered into a PLN 2.0 million (€0.5 million) overdraft facility.
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DESCRIPTION OF THE NOTES
Złomrex International Finance S.A. (the “Issuer”) will issue the Notes under the indenture to be dated as
of January 29, 2007 (the “Indenture”) among, inter alia, the Issuer, Złomrex Spółka Akcyjna (the “Company”),
the Subsidiary Guarantors (as defined below) and The Bank of New York, as trustee (the “Trustee”).
You will find definitions of certain capitalized terms used in this “Description of the Notes” section under
the heading “— Certain Definitions”. For purposes of this “Description of the Notes” section, references to the
“Issuer” refer only to the Issuer and not to the Company or the Issuer’s or the Company’s subsidiaries, and
references to the “Company” refer only to the Company and not to its subsidiaries.
This “Description of the Notes” is intended to be a summary of the material provisions of the Notes, the
Indenture and the Security Documents contained therein. However, the Indenture and the Security Documents,
and not this summary, define your rights as Holders, and therefore you should refer to the Indenture and the
Security Documents for complete descriptions of the obligations of the Issuer, the Company and the Subsidiary
Guarantors, and your rights. Copies of the Indenture and the Security Documents are available free of charge
upon request from the Issuer and, for so long as the Notes are listed on the Luxembourg Stock Exchange and
traded on the Euro MTF Market of the Luxembourg Stock Exchange (the “Euro MTF Market”), upon request to
the Paying Agent in Luxembourg.
The registered holder of a Note will be treated as its owner for all purposes. Only registered holders will
have rights under the Indenture and the Security Documents, including, without limitation, with respect to
enforcement and the pursuit of other remedies. The Notes have not been registered under the Securities Act and
are subject to certain transfer restrictions.
General
The Notes. The Notes will:
Š be senior obligations of the Issuer;
Š be unconditionally guaranteed on a senior basis by the Company and each of the Subsidiary
Guarantors (see “— Notes Guarantees” below);
Š be secured by first-ranking security interests in the Collateral (see “— Security” below);
Š rank equally in right of payment with any Senior Indebtedness of the Issuer and rank senior in right of
payment to any existing and future Subordinated Indebtedness of the Issuer;
Š mature on February 1, 2014;
Š be represented by one or more registered Notes in global form (“Global Notes”), but in certain
circumstances may be represented by Notes in definitive form (“Definitive Notes”). See “Book-Entry,
Delivery and Form”; and
Š be issued in minimum denominations of €50,000 and in integral multiples of €1,000 thereof.
Interest. Interest on the Notes will:

Š accrue at the rate of 8.50% per annum;
Š accrue from the date of original issuance or, if interest has already been paid, from the date it was
most recently paid;
Š be payable in cash semi-annually in arrears on February 1 and August 1, commencing on August 1,
2007;
Š be payable to the Holder of that Note on the January 15 and July 15 immediately preceding the related
interest payment date; and
Š be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Indenture is unlimited in aggregate principal amount, but the issuance in this offering of Notes is
limited to €170.0 million. We may issue an unlimited principal amount of additional notes having identical terms
and conditions to the Notes that are the subject of this offering (the “Additional Notes”), including the benefit of
Collateral and the Notes Guarantees. We will only be permitted to issue Additional Notes if at the time of such
issuance we are in compliance with the covenants contained in the Indenture (including the covenant described
below under “Certain Covenants — Limitation on Indebtedness”) and if such Additional Notes and the
previously outstanding Notes constitute the same issue for U.S. federal income tax purposes. The Notes issued in
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this offering and, if issued, any Additional Notes, will be treated as a single class for all purposes under the
Indenture, including with respect to waivers, amendments, redemptions and offers to purchase. Unless the
context otherwise requires, in this “Description of the Notes” section, references to the Notes include the Notes
and any Additional Notes that are issued.
When issued, the Notes will be a new issue of securities with no established trading market. No assurance
can be given as to the liquidity of the trading market for the Notes. Application has been made to have the Notes
admitted to the Official List of the Luxembourg Stock Exchange and admitted for trading on the Euro MTF
Market, but there can be no assurance that such application will be approved or granted.
Notes Guarantees
General
On the Issue Date, all Subsidiaries of the Company will be Restricted Subsidiaries. Under the
circumstances described below under the definition of “Unrestricted Subsidiaries”, the Company will be
permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries”. Generally, Unrestricted
Subsidiaries will not be subject to any of the restrictive covenants in the Indenture.
In addition, (a) on and after the Issue Date, (i) the Company and (ii) Odlewnia Metali Szopienice
Sp. z o.o, Zakład Walcowniczy-Walcownia Bruzdowa Sp. z o.o., HSW-Huta-Stali Jakościowych S.A., Ferrostal
Łabȩdy Sp. z o.o. and Złomrex Zbrojarnia Sp. z o.o. and (b) any person who in the future executes a
supplemental indenture under which such person agrees to be bound by the terms of the Indenture as a Subsidiary
Guarantor (including in accordance with the covenant described below under the section entitled “— Certain
Covenants — Future Subsidiary Guarantors; Future Share Pledges”) will guarantee the Issuer’s obligations under
the Notes (the “Notes Guarantees”) (Persons described in (a) and (b) are referred to herein as the “Guarantors”
and subsidiaries described (a)(ii) and (b) are referred to herein as the “Subsidiary Guarantors”).
The Guarantors will unconditionally guarantee the Issuer’s obligations under the Indenture and the Notes
on a joint and several basis. Each Notes Guarantee will be a senior obligation of the relevant Guarantor ranking
(i) equally in right of payment to any existing or future Guarantor Senior Indebtedness of the relevant Guarantor,
including, in the case of the Company, the Intercompany Proceeds Note, and (ii) senior in right of payment to all
existing and future Guarantor Subordinated Indebtedness of the relevant Guarantor.
The Notes and Notes Guarantees will be secured by first-ranking security interests on the Collateral.
Under certain circumstances, the Company, the Issuer and the Subsidiary Guarantors will be permitted to secure
additional Indebtedness (including Additional Notes) with all or a portion of the Collateral.
The obligations of each Guarantor under its Notes Guarantee will be limited under relevant laws
applicable to such Guarantor (including laws relating to corporate benefit, capital preservation, financial
assistance, fraudulent conveyance and transfers or transactions under value) and the granting of such Notes
Guarantees will be limited to the maximum amount payable such that such Notes Guarantees shall not constitute
a fraudulent conveyance, fraudulent transfer, voidable preference, a transaction under value or unlawful financial
assistance or otherwise cause the Guarantor to be insolvent or in breach of applicable capital preservation rules
under relevant law or such Notes Guarantee to be void, unenforceable or ultra vires or cause the directors or
members of the supervisory board or analogous board or body of such Subsidiary Guarantor to be in breach of, or
liable under, applicable corporate or commercial law for providing such Notes Guarantee. See “Risk Factors —
Fraudulent conveyance statutes under Polish law may limit your rights as a holder of the Notes to enforce the
security provided by the guarantors”.
As of and for the nine months ended September 30, 2006, the initial Guarantors accounted for 89.1% of
total revenues, all of the profit for the period and 90.9% of the gross profit of the Company and its Subsidiaries.
Upon completion of the Austrian Acquisition, the members of the Target Group will not become
Guarantors of the Notes, although they will become Restricted Subsidiaries of the Company and will be subject
to the covenants and other limitations described in this “Description of the Notes” and the Target will be subject
to the terms of the Acquisition On-Loan.
Release of the Guarantees

A Subsidiary Guarantor will be automatically and unconditionally released (and its Subsidiary Guarantee
shall thereupon terminate and be discharged and be of no further force and effect):
(1) upon the full and final payment and performance of all obligations of the Issuer under the
Indenture and the Notes;
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(2) in accordance with the Security Documents (as in effect on the Issue Date or as amended,
supplemented or otherwise modified after the Issue Date to the extent such amendment,
supplement or modification is permitted under the Indenture) upon the occurrence of an
enforcement action taken on behalf of the Noteholders thereunder;
(3) in connection with any sale or disposition of such Subsidiary Guarantor (whether by merger,
consolidation, the sale of all of its capital shares or the sale of all or substantially all of its assets
(other than by way of lease)), which, at the time of such sale or distribution, is made in accordance
with the provisions of the covenant described under “Certain Covenants — Limitation on Sales of
Assets and Subsidiary Shares” and, if applicable, the covenant described under “— Merger and
Consolidation”;
(4) upon legal or covenant defeasance as described below under “— Defeasance” or upon satisfaction
and discharge of the Issuer’s obligations under the Indenture as described below under
“— Satisfaction and Discharge”; or
(5) in the event the Subsidiary Guarantor is designated as an Unrestricted Subsidiary in compliance
with the terms of the Indenture.
If a Subsidiary Guarantor is released from its obligations under a Subsidiary Guarantee at a time when the
Notes are listed on the Luxembourg Stock Exchange and traded on the Euro MTF Market, and the rules of such
stock exchange so require, the Issuer will notify the Luxembourg Stock Exchange of such release.
At the request and expense of the Issuer, the Company or any Subsidiary of the Company, the Trustee
will execute and deliver any document reasonably requested to evidence such release and discharge.
A Subsidiary Guarantor may consolidate with or merge into or sell its assets to the Issuer, the Company
or another Subsidiary Guarantor or may consolidate with or merge into or sell its assets to other Persons upon the
terms and conditions set forth in the Indenture. See “— Certain Covenants — Merger and Consolidation”.
The Intercompany Proceeds Note
On the Issue Date, the Issuer will: (1) on-lend an amount representing approximately €82 million of the
gross proceeds of the issuance of the Notes to the Company under the Intercompany Proceeds Notes; (2) deposit
an amount into an Escrow Account sufficient to redeem €60 million of the Notes upon the occurrence of a
Special Mandatory Redemption (see “Escrow of Proceeds; Special Mandatory Redemption”); and (3) deposit the
remaining cash amount (the “Unallocated Issuer Funds”) in a designated bank account (the “Issuer Proceeds
Bank Account”). On the Acquisition Closing Date, the Issuer will on-lend an additional amount (comprised of
funds released from the Escrow Account and funds available from the Issuer Proceeds Bank Account) to the
Company under one or more further Intercompany Proceeds Notes (referred to collectively with the initial
Intercompany Proceeds Notes as the “Intercompany Proceeds Note” or “Intercompany Proceeds Notes”) such
that the aggregate principal amount of Indebtedness subject to the Intercompany Proceeds Note and the
Acquisition On-Loan (as described below) will equal €170 million. In the event the Austrian Acquisition is not
consummated, the amount of the Intercompany Proceeds Note will be increased to €110 million.
Interest will accrue on the Intercompany Proceeds Note at a rate at least equal to the interest rate payable
on the Notes, with such adjustments as may be agreed between the parties or necessary to match any additional
amounts due thereunder or any default or special interest payable with respect to the Notes and to comply with
applicable law. The Intercompany Proceeds Note is repayable at the same time as the repayment in full or in part
of amounts due under the Notes, whether at maturity, on early redemption or mandatory repurchase or upon
acceleration.
As described below under “— Security”, the obligations of the Issuer under the Notes will be secured by
a first-priority assignment of the Intercompany Proceeds Note. In the event that Additional Notes or debt
securities of the Issuer substantially identical to the Notes and Notes Guarantees are issued by the Issuer, the
Issuer may loan an amount equal to the gross proceeds of such issuance to the Company or one or more of its
Restricted Subsidiaries under an Additional Intercompany Proceeds Note, which shall also be subject to a first-
priority assignment. Unless the context otherwise requires, in this “Description of the Notes” section, the term
“Intercompany Proceeds Note” will include any Additional Intercompany Proceeds Note.
The Acquisition On-Loan
Under the Acquisition On-Loan, on or prior to the Acquisition Closing Date, the Issuer will loan amounts
released from the Escrow Account as described below under “— Escrow of Proceeds; Special Mandatory
Redemption” in an amount necessary to repay the outstanding shareholder (and related) Indebtedness of the
Target Group (estimated to be approximately €45 million but subject to adjustment as provided in the
Acquisition Agreement) under one or more loans to Target and/or members of the Target Group (referred to
collectively as the “Acquisition On-Loan”). Interest will accrue (and be deemed to accrue since the Issue Date)
on the Acquisition On-Loan at a rate at least equal to the interest rate payable on the Notes, with such
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adjustments as may be agreed between the parties or necessary to match any additional amounts due thereunder
or any default or special interest payable with respect to the Notes and to comply with applicable law. The
Acquisition On-Loan is repayable:
(1) at the same time as the repayment in full or in part of amounts due under the Notes (divided pro
rata with the Intercompany Proceeds Note), whether at maturity, on early redemption or
mandatory repurchase or upon acceleration: or
(2) in connection with any sale or disposition of the Target (whether by merger, consolidation, the sale
of all of its capital shares or the sale of all or substantially all of its assets (other than by way of
lease)) which, at the time of such sale or disposition, is made in accordance with the provisions of
the covenant described under “Certain Covenants — Limitation on Sales of Assets and Subsidiary
Shares” and, if applicable, the covenant described under “— Merger and Consolidation”; provided,
at the time of any such sale or disposition, any amounts outstanding under the Acquisition On-Loan
are refinanced to become obligations under the Intercompany Proceeds Note.
While the Issuer will be the direct beneficiary of the Acquisition On-Loan, the holders of the Notes will
benefit from a first-priority security interest over the Acquisition On-Loan. The Acquisition On-Loan will be
guaranteed by the Company on a senior basis. To the extent the direct obligor under any portion of the
Acquisition On-Loan is not the Target, the Target will guarantee such portion of the Acquisition On-Loan on a
senior basis. In addition the Acquisition On-Loan will provide that, in certain circumstances, the Target may
request that the Company pay the periodic interest due under the Acquisition On-Loan to the Issuer in Lieu of
payment by voestalpine Stahlhandel GmbH.
Security
General
The obligations of the Issuer under the Notes and the Indenture and the Guarantors under the Notes
Guarantees will be secured by the following assets of the Company and its Restricted Subsidiaries (the
“Collateral”):
(1) first-priority share pledges (the “Share Pledges”) over (a) on the Issue Date, the Capital Shares of
the Issuer held by the Company and the Capital Shares of the Subsidiary Guarantors held by the
Company, (b) upon consummation of the Austrian Acquisition, the Capital Shares of the Target
held directly or indirectly by the Company (but not the Capital Shares of Subsidiaries of the
Target) and (c) in all other cases, in compliance with the “— Certain Covenants — Future
Subsidiary Guarantors; Future Share Pledges”;
(2) a first-priority assignment over the Intercompany Proceeds Note (all amounts payable under the
Intercompany Proceeds Note);
(3) upon consummation of the Austrian Acquisition, a first-priority security interest over the
Acquisition On-Loan (all amounts payable under the Acquisition On-Loan);
(4) (a) prior to the release therefrom, a first-priority security interest in the funds held in the Escrow
Account and (b) prior to the on-lending of the Unallocated Issuer Funds to the Company under the
Intercompany Proceeds Note, a first-priority pledge over the Issuer Proceeds Bank Account; and
(5) a first-priority pledge over the balance of the bank account into which the Asset Sale Cash
Collateral is paid prior to application thereof in accordance with the covenant described under
“Certain Covenants — Limitation on Sales of Assets and Subsidiary Shares”.
Subject to certain conditions, the assets constituting the Collateral (other than, in certain cases, the
Intercompany Proceeds Note and the Acquisition On-Loan) may be pledged on a first-priority or junior ranking
basis to secure Indebtedness other than the Notes and the Guarantees.
The Collateral will be pledged to The Bank of New York, as Collateral Agent and/or as Security Agent for
the benefit of the Trustee and the Holders of the Notes on a senior basis. Under the Indenture, only the Notes and
the Guarantees, additional Notes (and the related Guarantees) and certain other Indebtedness of the Issuer and the
Guarantors will be allowed to benefit from security over the Collateral, including the shares subject to the Share
Pledges.
The Issuer will enter into an intercreditor agreement (the “Intercreditor Agreement”) with the Company, the
Trustee and the Collateral Agent which will effectively provide that all Additional Notes and other debt securities or
Credit Facilities (and Hedging Obligations relating to the Notes and any of the foregoing) that, subject to the terms
of the Indenture, are secured by the Collateral, will share in the Collateral (to the extent permitted in the definition
of Permitted Collateral Liens) on an equal basis (or in the case of security interests junior to the security interests
granted to the Notes and Notes Guarantees, on a junior basis); provided, that enforcement of remedies against the
Collateral under the Intercreditor Agreement and the Security Documents may only be taken by the Collateral
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Agent on the instruction of noteholders, creditors or their representatives representing at least 25% of the total
Indebtedness (other than Indebtedness with respect to Hedging Obligations referred to above) secured by the
Collateral and held by senior creditors, and the Collateral Agent under the Intercreditor Agreement and the Security
Documents shall be directed by noteholders, creditors or their representatives representing such percentage.
The Notes Guarantees will be effectively subordinated to any other existing and future secured
Indebtedness of the Guarantors permitted to be Incurred under the Indenture to the extent of the value of the
assets securing such Indebtedness unless such assets also secure the Notes Guarantees on an equal and ratable or
senior basis. In the event of a bankruptcy or insolvency, each Guarantor’s secured lenders will have a prior
secured claim to any collateral of such Guarantor securing the debt owed to them.
Release of Collateral
Liens on Collateral securing the Notes and the Notes Guarantees will be automatically and
unconditionally released:
(1) upon the full and final payment and performance of all obligations of the Issuer under the
Indenture and the Notes;
(2) in accordance with the Security Documents and/or the Intercreditor Agreement (as in effect on the
Issue date or as amended, supplemented or otherwise modified after the Issue Date to the extent
such amendment, supplement or modification is permitted under the Indenture) upon the
occurrence of an enforcement action taken on behalf of the Noteholders thereunder;
(3) upon an asset sale which, at the time the Collateral is transferred, is made in accordance with the
provisions of the covenant described under the caption “— Certain Covenants — Limitation on
Sales of Assets and Subsidiary Shares”;
(4) upon legal or covenant defeasance as described below under “— Defeasance” or upon satisfaction
and discharge of the Issuer’s obligations under the Indenture as described below under
“— Satisfaction and Discharge”;
(5) if the Collateral is an asset of a Subsidiary Guarantor (or one of its Subsidiaries) that is to be
designated as an Unrestricted Subsidiary, upon designation of the Subsidiary Guarantor as an
Unrestricted Subsidiary in compliance with the terms of the Indenture;
(6) if the Collateral is shares of a Subsidiary, upon a consolidation, merger or sale, conveyance or
transfer of all or substantially all of the assets of such Subsidiary in accordance with the terms of
the Indenture; and
(7) if the Collateral is a Share Pledge of the Capital Shares of a Subsidiary Guarantor, upon the
release of the Subsidiary Guarantee of such Subsidiary Guarantor as described under the section
entitled “— Notes Guarantees — Release of Guarantees”.
Redemption
The Notes will not be redeemable at the option of the Issuer prior to February 1, 2011, except as
described in the section entitled “— Redemption for Taxation Reasons”, “Escrow of Proceeds; Special
Mandatory Redemption” and hereunder. The Issuer may redeem the Notes at its option, in whole or in part, at the
following redemption prices (expressed as percentages of the principal amount thereof), plus accrued and unpaid
interest and Additional Amounts (as defined below), if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if
redeemed during the twelve-month period commencing on February 1 of the years set out below:
Year Percentage
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.250%
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.125%
2013 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%
At any time prior to February 1, 2011, the Notes may also be redeemed in whole or in part, at the Issuer’s
option at a price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued
but unpaid interest and Additional Amounts, if any, to, the date of redemption or purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
At any time, or from time to time, on or prior to February 1, 2010, the Issuer may, at its option, use the
Net Cash Proceeds of one or more Public Equity Offerings to redeem up to 35% of the principal amount of the
Notes issued under the Indenture (including the principal amount of any Additional Notes) at a redemption price
of 108.5% of the principal amount thereof plus accrued and unpaid interest thereon and Additional Amounts, if
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any, to the date of redemption (subject to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date); provided that:
(1) at least 65% of the principal amount of Notes (which includes Additional Notes, if any) issued
under the Indenture and not previously redeemed pursuant to the covenant described under
“Escrow of Proceeds; Special Mandatory Redemption” remains outstanding immediately after any
such redemption; and
(2) the Issuer makes such redemption not more than 90 days after the consummation of any such
Public Equity Offering.
All such redemptions or purchases may be made upon not less than 30 nor more than 60 days’ notice
prior to the date of redemption in accordance with the provisions set forth under the section entitled
“— Notices”.
Selection and Notice of Redemption
In the event that the Issuer chooses to redeem less than all of the Notes, selection of the Notes for
redemption will be made by the Trustee either:
(1) in compliance with the requirements of the principal securities exchange, if any, on which the
Notes are listed; or
(2) if such Notes are not so listed or such exchange prescribes no method of selection, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate.
No Notes of a principal amount of €50,000 or less shall be redeemed in part. If a partial redemption is
made with the proceeds of an Public Equity Offering, the Trustee will select the Notes only on a pro rata basis or
on as near to a pro rata basis as is practicable. Notice of redemption will be mailed by first-class mail at least 30
but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, then the notice of redemption that relates to such Note must
state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original
Note. On and after the date of redemption, interest will cease to accrue on Notes or portions thereof called for
redemption as long as the Issuer has deposited with the Paying Agent funds in satisfaction of the applicable
redemption price. The Trustee will not be liable for selections made by it pursuant to this paragraph.
At least 30 days but not more than 60 days before a redemption date, the Issuer will give notice of such
redemption in accordance with the procedures described under “— Notices.”
For so long as the Notes are listed on the Luxembourg Stock Exchange and traded on the Euro MTF
Market and the rules of such stock exchange shall so require, the Issuer will notify the Luxembourg Stock
Exchange of any such notice.
Withholding Taxes
All payments made by the Issuer, the Guarantors or a successor of any of the foregoing (each, a “Payor”)
under, or with respect to, the Notes or the Notes Guarantees will be made free and clear of and without
withholding or deduction for, or on account of, any present or future taxes, duties, levies, fees, assessments or
governmental charges of whatever nature (including penalties, interest and other liabilities related thereto)
(collectively, “Taxes”) imposed, levied, collected or assessed by or on behalf of (1) any jurisdiction in which the
Payor is organized, resident or engaged in business, or any political subdivision or governmental authority
thereof or therein having the power to tax; or (2) any jurisdiction from or through which payment on the Notes or
such Notes Guarantee is made, or any political subdivision or governmental authority thereof or therein having
the power to tax (each of the preceding clauses (1) and (2), a “Relevant Taxing Jurisdiction”) unless the
withholding or deduction of such Taxes is then required by law.
If any deduction or withholding for, or on account of, any Taxes of any Relevant Taxing Jurisdiction will
at any time be required from any payments made with respect to the Notes or under any Notes Guarantees,
including payments of principal, redemption price, interest or premium, if any, the Payor will increase such
payments by such additional amounts (the “Additional Amounts”) as may be necessary in order that the net
amounts received in respect of such payments by each Holder and beneficial owner of the Notes or the Trustee,
as the case may be, after such withholding or deduction (including any such deduction or withholding from such
Additional Amounts), will not be less than the amounts which would have been received in respect of such
payments in the absence of such withholding or deduction; provided, however, that no such Additional Amounts
will be payable with respect to:
(a) any Taxes that would not have been so imposed but for the existence of any present or former
connection between the Holder or beneficial owner of such Note and the Relevant Taxing
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Jurisdiction imposing such Taxes (other than the mere ownership or holding of such Note or Notes
Guarantee or enforcement of rights under the Note, Indenture or Notes Guarantee or the receipt of
payments in respect thereof);
(b) any Taxes that would not have been so imposed if the Holder had made a declaration of
non-residence, any other claim or filing for exemption to which it is entitled or provide a tax
residency certificate (provided that (x) such declaration of non-residence, other claim or filing for
exemption or tax residency certificate is required by the applicable law of the Relevant Taxing
Jurisdiction as a precondition to exemption from the requirement to deduct or withhold all or a
part of any such Taxes and (y) at least 30 days prior to the first payment date with respect to
which such declaration of non-residence, other claim or filing for exemption or tax residency
certificate is required under the applicable law of the Relevant Taxing Jurisdiction, the relevant
Holder at that time has been notified (in accordance with the procedures set forth in the Indenture)
by the Payor or any other person through whom payment may be made that a declaration of
non-residence, other claim or filing for exemption or tax residency certificate is required to be
made or provided);
(c) any Note presented for payment (where presentation is required) more than 30 days after the
relevant payment is first made available for payment to the Holder (except to the extent that the
Holder would have been entitled to Additional Amounts had the Note been presented during such
30-day period);
(d) any Taxes that are payable otherwise than by deduction or withholding from a payment of the
principal of, premium, if any, or interest on the Notes or Notes Guarantee;
(e) any estate, inheritance, gift, sale, excise, transfer, personal property or similar tax, assessment or
other governmental charge; or
(f) any withholding or deduction imposed on a payment to an individual and required to be made
pursuant to the European Union Savings Tax Directive (2003/48/EC) or related arrangements with
third countries or associated territories on the taxation of savings income, or any law
implementing or complying with, or introduced to conform to, such directive or related
arrangements (the “EU Savings Tax Directive”).
Also, such Additional Amounts will also not be payable with respect to any payment of principal of (or
premium, if any, on) or interest on such Note to any Holder who is a fiduciary or partnership or any person other
than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such
fiduciary, a member of such a partnership or the beneficial owner of such payment would not have been entitled
to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder of
such Note.
The Payor will, upon written request of each Holder of Notes (subject to the exclusions set forth in
paragraphs (a), (b), (c), (d), (e) and (f) of this section, and provided that reasonable supporting documentation is
provided) reimburse each such Holder for the amount of any such Taxes levied or imposed by a Taxing
Jurisdiction and paid by such Holder as a result of payments made under or with respect to the Notes. Any
payment pursuant to this section shall be an Additional Amount.
The Payor will (a) make any required withholding or deduction and (b) remit the full amount deducted or
withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. The Payor will use all reasonable
efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld
from each Relevant Taxing Jurisdiction imposing such Taxes and will provide such certified copies to each
Holder. The Payor will attach to each certified copy a certificate stating (x) that the amount of withholding Taxes
evidenced by the certified copy was paid in connection with payments in respect of the principal amount of Notes
then outstanding and (y) the amount of such withholding Taxes paid per €1,000 principal amount of the Notes.
Upon request, copies of such documentation will be supplied by the Payor to the Trustee, the Holder, or if the
Notes are then listed on the Luxembourg Stock Exchange and traded on the Euro MTF Market, the Paying Agent.
At least 30 days prior to each date on which any payment under or with respect to the Notes or Notes
Guarantee is due and payable (unless such obligation to pay Additional Amounts arises shortly before or after the
30th day prior to such date, in which case it shall be promptly thereafter), if the Payor will be obligated to pay
Additional Amounts with respect to such payment, the Payor will deliver to the Trustee an Officers’ Certificate
stating the fact that such Additional Amounts will be payable, the amounts so payable and will set forth such
other information necessary to enable the Trustee to pay such Additional Amounts to Holders on the payment
date. Each such Officers’ Certificate may be relied upon by the Trustee until receipt of a further Officers’
Certificate addressing such matters.
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The Indenture will further provide that, if the Payor conducts business in any jurisdiction (an “Additional
Taxing Jurisdiction”) other than a Relevant Taxing Jurisdiction and, as a result, is required by the law of such
Additional Taxing Jurisdiction to deduct or withhold any amount on account of taxes imposed by such
Additional Taxing Jurisdiction from payments under the Notes, which would not have been required to be so
deducted or withheld but for such conduct of business in such Additional Taxing Jurisdiction, the Additional
Amounts provision described above shall be considered to apply to such holders as if references in such
provision to “Taxes” included taxes imposed by way of deduction or withholding by any such Additional Taxing
Jurisdiction (or any political subdivision thereof or taxing authority therein).
Wherever in the Indenture, the Notes or any Notes Guarantee are mentioned, in any context, (1) the
payment of principal, (2) redemption prices or purchase prices in connection with a redemption or purchase of
the Notes or a Notes Guarantee, (3) interest or (4) any other amount payable on or with respect to any of the
Notes or the Notes Guarantees, such reference shall be deemed to include payment of Additional Amounts as
described under this heading to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof.
The Payor will pay any present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in any jurisdiction from the creation, issuance, execution,
enforcement, delivery or registration of any Notes or any other document or instrument referred to therein (other
than a transfer of the Notes), or the receipt of any payments with respect to the Notes, including interest and
penalties with respect thereto, imposed by or in any Relevant Taxing Jurisdiction in respect of the execution,
issue, enforcement or delivery of the Notes or any other document or instrument referred to thereunder.
The foregoing obligations will survive any termination, defeasance or discharge of the Indenture and will
apply mutatis mutandis to any jurisdiction in which any (1) successor Person to a Payor is organized or resident
for tax purposes or (2) Subsidiary of the Company which becomes a Subsidiary Guarantor after the date of the
Indenture is organized or resident for tax purposes, or, in each case, any political subdivision or taxing authority
or agency thereof or therein.
Redemption for Taxation Reasons

The Notes may be redeemed, at the option of the Issuer, in whole but not in part, upon giving not less
than 30 nor more than 60 days’ notice to each Holder of the Notes with a copy to the Trustee (which notice will
be irrevocable), at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the redemption date, together with all Additional Amounts, if any, which otherwise
would be payable if as a result of any amendment to, or change in, the laws or treaties (or any regulations or
rulings promulgated thereunder) of a Relevant Taxing Jurisdiction affecting taxation; or any amendment to or
change in an official interpretation or application regarding such laws, treaties, regulations or rulings, including a
holding, judgment or order by a court of competent jurisdiction which becomes effective on or after the date
hereof (a “Change in Tax Law”) the Issuer, with respect to the Notes, or a Guarantor, with respect to a Notes
Guarantee, is, or on the next interest payment date in respect of the Notes, would be, required to pay Additional
Amounts in respect of any Note pursuant to the terms and conditions thereof which obligation cannot be avoided
by the taking of reasonable measures available to it (including making payment through a paying agent in
another jurisdiction); provided, however, that (a) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which the Issuer or Guarantor, as the case may be, would be obligated to pay such
Additional Amounts were a payment in respect of the Notes or a Notes Guarantee then due and payable and
(b) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. In the case
of any jurisdiction that is a Relevant Taxing Jurisdiction on the Issue Date, the applicable Change in Tax Law
must become effective on or after the date of this Offering Memorandum. In the case of a jurisdiction that
becomes a Relevant Taxing Jurisdiction after the Issue Date, the applicable Change in Tax Law must become
effective after the date that such jurisdiction becomes a Relevant Taxing Jurisdiction.
Prior to the giving of any notice of redemption pursuant to this provision, the Issuer will deliver to the
Trustee (a) an Officers’ Certificate stating that the Issuer is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred and
(b) an Opinion of Counsel, such opinion being reasonably acceptable to the Trustee, qualified under the laws of
the Relevant Taxing Jurisdiction to the effect that the conditions precedent to the right of the Issuer to redeem
have occurred. Such notice, once delivered to the Trustee, will be irrevocable.
Escrow of Proceeds; Special Mandatory Redemption

Under the terms of an escrow agreement (the “Escrow Agreement”) to be entered into on the Issue Date
between the Issuer and The Bank of New York, as escrow agent (the “Escrow Agent”), the Issuer will deposit in
an escrow account (the “Escrow Account”) established with the Escrow Agent an amount (the “Escrowed
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Funds”) sufficient to redeem €60 million aggregate principal amount of the Notes (the “Mandatorily Redeemable
Notes”) at a redemption price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest thereon from and including the Issue Date through the Special Mandatory Redemption Date (as defined
below). The Mandatorily Redeemable Notes will be subject to a special mandatory redemption (the “Special
Mandatory Redemption”) in the event the Austrian Acquisition is not consummated on or prior to June 30, 2007
(the “Special Mandatory Redemption Trigger Date”) or the Acquisition Agreement is terminated at any time
prior thereto (either of such events a “Special Mandatory Redemption Event”). The Issuer will cause the notice of
the Special Mandatory Redemption to be delivered to the Escrow Agent and to each Holder of Notes no later
than the fifth Business Day following the Special Mandatory Redemption Event and will redeem the Mandatorily
Redeemable Notes no later than ten Business Days following the date of such notice of redemption (such date,
the “Special Mandatory Redemption Date”). The selection of the Notes for redemption will be made by the
Trustee either: (1) in compliance with the requirements of the principal securities exchange, if any, on which the
Notes are listed; or (2) if such Notes are not so listed or such exchange prescribes no method of selection, on a
pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate.
The Company will only be entitled to direct the Escrow Agent to release the escrowed funds in
accordance with the Escrow Agreement. Pursuant to the Escrow Agreement, the Escrow Agent will release the
escrowed funds upon satisfaction of the following condition: the presentation by the Company of an Officers’
Certificate certifying that (i) all conditions precedent to consummation of the Austrian Acquisition have been
satisfied or waived (except for conditions which by their nature are to be satisfied at closing or substantially
contemporaneously with the closing), (ii) the Austrian Acquisition will be consummated within 24 hours in
substantially the manner described in the Acquisition Agreement, as amended or modified, provided such
amendments or modifications are not, in the aggregate, materially adverse to the Holders of the Notes after
giving effect to the Austrian Acquisition (determined in good faith by the Supervisory Board of the Company),
on or prior to the Special Mandatory Redemption Trigger Date and (iii) the Austrian Acquisition will result in the
ownership by the Company of 74.9% of the Capital Shares of the Target. Following the release of the escrowed
funds, such funds proceeds, will be applied by the Issuer, pursuant to the Acquisition On-Loan, to repay
outstanding shareholder (and related) Indebtedness of the Target Group (currently estimated to be approximately
€45 million), which will fluctuate until the Acquisition Closing Date, with the remainder provided to the
Company pursuant to the Intercompany Proceeds Note. As promptly as practicable and in any event prior to the
10th Business Day following the Acquisition Closing Date, the Company will pledge on a first priority basis the
Capital Shares of Target held directly or indirectly by the Company and grant a first priority security interest over
the Acquisition On-Loan. Prior to the disbursement of the escrowed funds, the Notes will be secured by a first-
priority lien over the escrowed funds.
As long as the escrowed funds are deposited with the Escrow Agent, they will be invested by the Escrow
Agent at the instruction of the Company in cash or Cash Equivalents.
If the Escrow Agent receives a notice of Special Mandatory Redemption pursuant to the terms of the
Notes, the Escrow Agent will convert into cash all escrowed funds then held by it not later than the last Business
Day prior to the Special Mandatory Redemption Date and transmit an amount of such funds sufficient to pay the
redemption price, plus accrued and unpaid interest, for the Mandatory Redeemable Notes to the Trustee on such
date. Concurrently with such release to the Trustee, the Escrow Agent will release any excess of escrowed funds
over the mandatory redemption price plus accrued and unpaid interest to the date of redemption to the Issuer, and
the Issuer will be permitted to use such funds at its discretion (to the extent permitted by the Indenture).
Sinking Fund
The Notes will not be entitled to the benefit of any sinking fund.
Change of Control
Upon the occurrence of a Change of Control, each Holder will have the right to require the Issuer to
repurchase all or a portion (equal to €50,000 or an integral multiple thereof) of such Holder’s Notes at a purchase
price in cash equal to 101% of the principal amount of the Notes plus accrued and unpaid interest to the date of
purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the
relevant interest payment date) pursuant to the offer described below and in accordance with the other procedures
set out in the Indenture.
No later than the date that is 30 days after any Change of Control, the Issuer will mail a notice (the
“Change of Control Offer”) to each Holder, with a copy to the Trustee,
(1) stating that a Change of Control has occurred and that such Holder has the right to require the
Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal
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amount of such Notes plus accrued and unpaid interest to the date of purchase (subject to the right
of holders of record on a record date to receive interest on the relevant interest payment date) (the
“Change of Control Payment”);
(2) stating the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed) (the “Change of Control Payment Date”);
(3) describing the circumstances and relevant facts regarding the transaction or transactions that
constitute the Change of Control; and
(4) describing the procedures determined by the Issuer, consistent with the Indenture, that a Holder
must follow in order to have its Notes repurchased.
On the Change of Control Payment Date, the Issuer will, to the extent lawful:
(1) accept for payment all Notes properly tendered and not withdrawn pursuant to the Change of
Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions of Notes so tendered; and
(3) deliver or cause to be delivered to the Trustee an Officer’s Certificate stating the Notes or portions
of Notes being purchased by the Issuer in the Change of Control Offer.
On or promptly after the Change of Control Payment Date, the Issuer will, to the extent lawful:
(1) deliver, or cause to be delivered, to the principal Paying Agent the Global Notes in order to reflect
thereon the portion of such Notes or portions thereof that have been tendered to and purchased by
the Issuer; and
(2) deliver, or cause to be delivered, to the relevant Register for cancellation all Definitive Notes
accepted for purchase by the Issuer.
If any Definitive Notes have been issued, the Paying Agent will promptly mail to each Holder of
Definitive Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder of Definitive Notes a new Note
equal in principal amount to the unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount that is at least €50,000 and an integral multiple of €1,000 thereof.
The Change of Control provisions described above will be applicable whether or not any other provisions
of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture
does not contain provisions that permit the Holders to require that the Issuer repurchase or redeem the Notes in
the event of a takeover, recapitalization or similar transaction. The existence of a Holder’s right to require the
Issuer to repurchase such Holder’s Notes upon the occurrence of a Change of Control may deter a third party
from seeking to acquire the Company or its Subsidiaries in a transaction that would constitute a Change of
Control or make such an acquisition more difficult.
The Issuer will not be required to make a Change of Control Offer upon a Change of Control if (1) a third
party makes the Change of Control Offer in the manner, at the times or otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases
all Notes validly tendered and not withdrawn under such Change of Control offer or (2) notice of redemption has
been given as described under “Optional Redemption”. A Change of Control Offer may be made in advance of a
Change of Control (and will satisfy the Issuer’s obligation to make such an offer upon such Change of Control) if
a definitive agreement is in place at the time of the making of the Change of Control Offer that would, upon
consummation, result in a Change of Control, and such Change of Control Offer is otherwise made by the Issuer
or such third party in compliance with the provisions of this covenant.
The Issuer’s ability to repurchase Notes issued by it pursuant to a Change of Control Offer may be limited
by a number of factors. The occurrence of certain of the events that constitute a Change of Control could require
a mandatory prepayment of Indebtedness under the Revolving Credit Facilities. In addition, certain existing and
future Indebtedness of the Company or its Subsidiaries contain or may contain prohibitions on the occurrence of
certain events that would constitute a Change of Control or require such Indebtedness to be repurchased or repaid
upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Issuer to repurchase
the Notes could cause a default under, or require a repurchase of, such Indebtedness, even if the Change of
Control itself does not, due to the financial effect of such repurchase on the Issuer. Finally, the Issuer’s ability to
pay cash to the Holders upon a repurchase may be limited by the Issuer’s then existing financial resources. There
can be no assurance that sufficient funds will be available when necessary to make any required repurchases.
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Even if sufficient funds were otherwise available, the terms of the Company’s other Indebtedness may
prohibit the Issuer’s prepayment of the Notes or any payment by the Issuer or restrict the ability of the Company
or its Subsidiaries to fund any such payments before the scheduled maturity of the Notes. Consequently, if the
Company is not able to prepay or cause to be prepaid the Indebtedness outstanding under the Revolving Credit
Facilities (to the extent containing such restrictions) and any other Indebtedness containing similar restrictions or
obtain requisite waivers or consents, the Issuer may be unable to fulfill its repurchase obligations if Holders
exercise their repurchase rights following a Change of Control, resulting in a default under the Indenture.
The definition of “Change of Control” includes a disposition of all or substantially all of the property and
assets of the Company and its Restricted Subsidiaries taken as a whole to specified other Persons. There is no
precise established definition of the phrase “substantially all” under applicable law. Accordingly, in certain
circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a
disposition of “all or substantially all” of the property or assets of a Person. As a result, it may be unclear as to
whether a Change of Control has occurred and whether a Holder may require the Issuer to make an offer to
repurchase the Notes as described above.
The provisions of the Indenture relating to the Issuer’s obligation to make an offer to repurchase the
Notes as a result of a Change of Control may be waived or modified with the written consent of Holders of a
majority in outstanding principal amount of the Notes.
The Issuer will give notice of the commencement and results of the Change of Control Offer in
accordance with the procedures described under “— Notices.” In addition, the Issuer will comply with the
requirements of any securities laws and regulations to the extent such laws and regulations are applicable in
connection with the repurchase of Notes pursuant to a Change of Control Offer, including Rule 14e-1 under the
Exchange Act, and any other applicable securities laws or regulations. To the extent that the provisions of any
securities or other applicable laws or regulations conflict with the “Change of Control” provisions of the
Indenture, the Issuer shall comply with the applicable laws and regulations and shall not be deemed to have
breached its obligations under the “Change of Control” provisions of the Indenture by virtue thereof.
Certain Covenants
Limitation on Indebtedness
The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(including Acquired Indebtedness); provided, however, the Company may Incur Indebtedness (including
Acquired Indebtedness) and the Issuer may issue Additional Notes (or debt securities substantially identical to
the Notes (other than with respect to interest, maturity and redemption provisions)) and the Subsidiary
Guarantors or Finance Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) if on the date of
the Incurrence of such Indebtedness, after giving effect thereto on a pro forma basis, no Default or Event of
Default has occurred or is continuing and the Consolidated Fixed Charge Coverage Ratio of the Company would
have been greater than 2.25 to 1.0.
The first paragraph of this covenant will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness of the Company or any Restricted Subsidiary (other than the Issuer) Incurred
pursuant to Credit Facilities (and any “parallel debt” or similar obligations created under the
Credit Facilities or the security documents related thereto) in an aggregate principal amount at any
time outstanding not to exceed €40 million, less the amount of any permanent repayments of such
Indebtedness made with Net Available Cash from Asset Dispositions in accordance with the
provisions of “— Limitation on Sales of Assets and Subsidiary Shares”;
(2) other than in the case of an Incurrence of Indebtedness by the Issuer or a Finance Subsidiary,
(i) Indebtedness of the Company owing to and held by any Restricted Subsidiary or
(ii) Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted
Subsidiary; provided, however, that:
(a) (i) any subsequent issuance or transfer of Capital Shares or any other event which results
in any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a
Person other than the Company or a Restricted Subsidiary of the Company, shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness by the obligor
thereon;
(b) if the Company or a Subsidiary Guarantor is the obligor on such Indebtedness and the
Company or a Subsidiary Guarantor is not an obligee on such Indebtedness, such
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Indebtedness (other than Indebtedness of the Company under the Intercompany Proceeds
Note and Indebtedness of the Target under the Acquisition On-Loan and Indebtedness
owed to the Issuer or a Finance Subsidiary under a similar on-lending of proceeds from a
debt financing) is expressly subordinated in right of payment to the prior payment in full of
all obligations then due of the Company or such Subsidiary Guarantor, as the case may be,
with respect to the Notes Guarantee; and
(c) any Indebtedness of the Company or a Subsidiary Guarantor to a Restricted Subsidiary that
is not a Guarantor is unsecured;
(3) Indebtedness represented by (a) the Notes (other than any Additional Notes) (and any “parallel
debt” obligations created under the Indenture or the Security Documents) and (b) any Notes
Guarantees (and any “parallel debt” obligations created under the Security Documents);
(4) any Indebtedness outstanding on the Issue Date (including, in the case of existing factoring
arrangements and the Company’s promissory note program, the amount of undrawn commitments
available thereunder as of the Issue Date) other than (x) Indebtedness referred to in clauses (1),
(2), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16) and (17) of this “— Limitation on
Indebtedness” covenant and (y) Indebtedness repaid or refinanced with the proceeds of, or
simultaneous with, the offering of the Notes;
(5) Acquired Indebtedness of a Restricted Subsidiary; provided, however, that at the time of such
acquisition and after giving pro forma effect thereto, the Company would have been able to Incur
€1.00 of additional Indebtedness pursuant to the first paragraph of this covenant;
(6) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in clauses (3), (4)
(other than Indebtedness excluded under subclauses (x) and (y)) or (5) or this clause (6) or
Incurred pursuant to the first paragraph of this covenant;
(7) Hedging Obligations entered into for bona fide hedging purposes and not for speculative purposes
(as to which a determination in good faith by the Supervisory Board or the Management Board of
the Company shall be conclusive);
Purchase Money Indebtedness and Indebtedness represented by Capitalized Lease Obligations in
an aggregate outstanding principal amount which, when taken together with the principal amount
of all other Indebtedness Incurred pursuant to this clause (8) and then outstanding, will not exceed
at any time €10 million;
Indebtedness Incurred in respect of (a) workers’ compensation claims, self-insurance obligations,
performance, surety and similar bonds and completion guarantees and warranties provided by the
Company or a Restricted Subsidiary Incurred in the ordinary course of business and (b) letters of
credit, bankers’ acceptances, bills of exchange or other similar instruments or obligations issued
or relating to liabilities or obligations Incurred in the ordinary course of business;
Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price, earn-out or similar obligations, in each case,
Incurred or assumed in connection with the acquisition or disposition of any business, assets or
Capital Shares of a Restricted Subsidiary of the Company; provided that (A) the maximum
liability of the Company and its Restricted Subsidiaries in respect of all such Indebtedness shall at
no time exceed the gross proceeds, including the Fair Market Value of non-cash proceeds
(measured at the time received and without giving effect to any subsequent changes in value),
actually received by the Company and its Restricted Subsidiaries in connection with a disposition
and (B) in the case of acquisitions, (x) such Indebtedness is not reflected on the balance sheet of
the Company or a Restricted Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet shall not be deemed to be
reflected on the balance sheet for purposes of this clause (B)) and (y) on the date of the relevant
agreement in respect of such acquisition under which the obligation to incur such Indebtedness
arises, the Company would have been able to incur €1.00 of additional Indebtedness pursuant to
the first paragraph of this covenant;
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Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or
similar instrument drawn against insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five Business Days of Incurrence;
(12) (a) Guarantees by the Company or any Subsidiary Guarantor of Indebtedness of the Company, the
Issuer or any Subsidiary Guarantor otherwise permitted to be Incurred under the Indenture;
provided, that if the Indebtedness being Guaranteed is subordinated in right of payment to the
Notes or a Notes Guarantee, then such Guarantee shall be subordinated to the same or greater
extent as the Indebtedness Guaranteed; (b) Guarantees by any Restricted Subsidiary of the
Company that is not a Subsidiary Guarantor otherwise permitted to be Incurred under the
Indenture; and (c) Additional Notes Guarantees by the Guarantors of Additional Notes (or
Guarantees by the Guarantors of debt securities of the Issuer substantially identical to the Notes
(other than with respect to interest, maturity and redemption provisions)) otherwise permitted to
be Incurred under the Indenture;
(13) Indebtedness constituting reimbursement obligations with respect to bank or insurance company
bonds or guarantees and VAT guarantees issued in the ordinary course of business; provided,
however, that, upon valid demand being made under such reimbursement obligations, such
demands are satisfied within 90 days of the date of such demand;
(14) other than in the case of an Incurrence of Indebtedness by the Issuer or a Finance Subsidiary
Indebtedness owed on a short-term basis to banks or other financial institutions Incurred in the
ordinary course of business of the Company and its Restricted Subsidiaries maintained with such
banks or financial institutions and which arises in connection with ordinary banking arrangements
to manage cash balances of the Company and its Restricted Subsidiaries;
(15) Indebtedness of Target and its Subsidiaries outstanding on the Acquisition Closing Date to the
extent that in the aggregate, such Indebtedness either (x) is subsequently repaid and refinanced
with the proceeds of the Acquisition On-Loan or otherwise repaid substantially simultaneously
with the closing of the Austrian Acquisition or (y) to the extent not so repaid and refinanced, when
taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause
(15(y)) and then outstanding, will not exceed at any time €20.0 million;
(16) Indebtedness of Centrolstal and its Subsidiaries which, when taken together with the principal
amount of all other such Indebtedness Incurred pursuant to this clause (16) and then outstanding,
will not exceed at any time €20.0 million;
(17) Indebtedness of Kapital Sp. z o.o. and its Subsidiaries which, when taken together with the
principal amount of all other such Indebtedness Incurred pursuant to this clause (17) and then
outstanding, will not exceed at any time €5.0 million;
(18) customer deposits and advance payments received in the ordinary course of business from
customers for goods purchased in the ordinary course of business;
(19) deferred purchase obligations (including with respect to the remaining minority interest) arising in
connection with the Austrian Acquisition to the extent required to the classified by the Company
as Indebtedness (but not the Incurrence of Indebtedness to satisfy such obligations); and
additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate
outstanding principal amount which, when taken together with the principal amount of all other
Indebtedness Incurred pursuant to this clause (20) and then outstanding, will not exceed €7.5
million.
For purposes of determining compliance with, and the outstanding principal amount of any particular
Indebtedness Incurred pursuant to and in compliance with, this covenant:
(1) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the first and second paragraphs of this covenant, the Company, in its sole discretion,
will classify such item of Indebtedness on the date of Incurrence in any manner which complies
with this covenant, will only be required to include the amount and type of such Indebtedness in
one of such clauses and may reclassify from time to time all or any portion of such Indebtedness
in any manner that then complies with this covenant;
(2) all Indebtedness outstanding on the date of the Indenture under the Revolving Credit Facilities
shall be deemed initially Incurred on the Issue Date under clause (1) of the second paragraph of
this covenant and not the first paragraph or clause (4) of the second paragraph of this covenant;
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(3) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is
otherwise included in the determination of a particular amount of Indebtedness shall not be
included;
(4) if obligations in respect of letters of credit are Incurred pursuant to the Revolving Credit Facilities
and are being treated as Incurred pursuant to clause (1) of the second paragraph above and the
letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
and
(5) the principal amount of any Disqualified Capital Shares, or Preferred Shares of a Restricted
Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase
price (not including, in either case, any redemption or repurchase premium) or the liquidation
preference thereof.
For the avoidance of doubt, the Company is permitted to divide and classify at any time and from time to time an
item of Indebtedness in more than one of the clauses set forth in the second paragraph or the first paragraph of
this covenant in any manner that then complies with this covenant. In each case above, debt permitted to be
incurred also is permitted to include any “parallel debt” or similar obligations created in respect thereof.
Accrual of interest, accrual of dividends, the accretion of accreted value, the accretion or amortization of
original issue discount, the payment of interest in the form of additional Indebtedness and the payment of
dividends in the form of additional shares of Preferred Shares or Disqualified Capital Shares will not be deemed
to be an Incurrence of Indebtedness for purposes of this covenant. For purposes of this covenant, the amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness
issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with
any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
In addition, if at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness
of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under this “Limitation on Indebtedness” covenant,
the Issuer shall be in Default of this covenant).
For purposes of determining compliance with any euro-denominated restriction on the Incurrence of
Indebtedness, the euro-equivalent principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in
the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if
such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable euro-dominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such euro-dominated restriction shall be deemed
not to have been exceeded so long as the principal amount in such foreign currency of such refinancing
Indebtedness does not exceed the principal amount in such foreign currency of such Indebtedness being
refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the
Company and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be deemed to be exceeded
solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness
Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such
Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Limitation on Restricted Payments
The Company will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:
(1) declare or pay any dividend or make any distribution on or in respect of its Capital Shares
(including any payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) except:
(a) dividends or distributions payable in Qualified Capital Shares of the Company; and
(b) dividends or distributions payable to the Company or a Restricted Subsidiary of the
Company (and in the case of any such dividends payable by a Restricted Subsidiary of the
Company that is not a Wholly Owned Subsidiary, to the holders of Capital Shares (other
than Disqualified Capital Shares) (or owners of an equivalent interest in the case of a
Restricted Subsidiary that is an entity other than a corporation) on a pro rata basis);
(2) purchase, redeem, defease or otherwise acquire or retire for value, directly or indirectly, any
Capital Shares of the Company or of any direct or indirect parent of the Company held by Persons
other than the Company or a Restricted Subsidiary of the Company (other than in exchange for
Qualified Capital Shares of the Company);
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(3) make any principal payment on, or purchase, defease, redeem, prepay, decrease or otherwise
acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Indebtedness of the Issuer or any Guarantor
Subordinated Indebtedness of a Guarantor (other than the purchase, repurchase, defeasance,
redemption, prepayment or other acquisition or retirement for value of such Indebtedness
(a) purchased in anticipation of or in lieu of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of such purchase, repurchase,
defeasance or other acquisition or (b) between or among the Company and any of its Restricted
Subsidiaries); or
(4) make any Restricted Investment in any Person;
(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition or
retirement or Restricted Investment referred to the clauses (1) through (4) are referred to herein as a
“Restricted Payment”), if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default or an Event of Default shall have occurred and be continuing or would occur as a result
of such Restricted Payment; or
(2) the Company is not able to incur at least €1.00 of additional Indebtedness in compliance with the
first paragraph under the “— Limitation on Indebtedness” covenant after giving effect, on a pro
forma basis, to such Restricted Payment; or
(3) the aggregate amount of such Restricted Payments (including the proposed Restricted Payment)
made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash,
being the Fair Market Value of such property) shall exceed the sum of (without duplication):
(a) 50% of the Consolidated Net Income for the period (treated as one accounting period)
from the beginning of the first fiscal quarter commencing after the date of the Indenture to
the end of the most recent fiscal quarter ending prior to the date of such Restricted
Payment for which financial statements are available (or, in case such Consolidated Net
Income is a deficit, minus 100% of such deficit); plus
(b) 100% of the aggregate Net Cash Proceeds received by the Company from the issue or sale
of its Qualified Capital Shares or other capital contributions subsequent to the Issue Date
(other than Net Cash Proceeds received from an issuance or sale of such Capital Shares to
a Subsidiary of the Company or an employee share ownership plan, option plan or similar
trust to the extent in each case such sale is funded or guaranteed by the Company or any
Restricted Subsidiary of the Company); plus
(c) the amount by which Indebtedness of the Company or a Restricted Subsidiary is reduced
on the Company’s balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the
Company or a Restricted Subsidiary (whether issued before or after the Issue Date)
convertible or exchangeable for Qualified Capital Shares of the Company (less the amount
of any cash, or the Fair Market Value of any other property, distributed by the Company
upon such conversion or exchange, and increased, without duplication, by the amount of
such cash or property received by the Company or a Restricted Subsidiary upon such
conversion or exchange); plus
(d) the amount equal to the net reduction in Restricted Investments made by the Company or
any of its Restricted Subsidiaries in any Person resulting from:
(i) repurchases or redemptions of such Restricted Investments by such Person,
proceeds realized upon the sale of such Restricted Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of assets (including
by way of dividend or distribution) by such Person to the Company or any
Restricted Subsidiary; or
(ii) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of “Investment”) not to exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary,
which amount in each case under this clause (d) was included in the calculation of the
amount of Restricted Payments; provided, however, that such amounts included under this
clause (d) will be excluded from Consolidated Net Income for purposes of this paragraph.
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The provisions of the preceding paragraph will not prohibit:
(1) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital
Shares (including Disqualified Capital Shares) of the Company or Subordinated Indebtedness of
the Issuer or Guarantor Subordinated Indebtedness of a Guarantor made by exchange for, or out of
the proceeds of the sale of, Qualified Capital Shares of the Company (other than Qualified Capital
Shares issued or sold to a Subsidiary or an employee share ownership plan or similar trust to the
extent in each case such sale is funded or guaranteed by the Company, the Issuer or any Restricted
Subsidiary of the Company), which sale occurs substantially concurrently with, or to the extent
declared at the time of sale for such purpose, within 60 days of, such purchase, repurchase,
redemption, defeasance or other acquisition or retirement; provided, however, that (a) such
purchase, repurchase, redemption, defeasance, acquisition or retirement will be excluded in
subsequent calculations of the amount of Restricted Payments and (b) the Net Cash Proceeds from
such sale of Qualified Capital Shares will be excluded from clause (3)(b) of the preceding
paragraph;
(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of
Subordinated Indebtedness of the Issuer or Guarantor Subordinated Indebtedness of a Guarantor
made by exchange for, or out of the proceeds of the sale of, Indebtedness that is permitted to be
Incurred pursuant to the covenant described under “— Limitation on Indebtedness” and that in
each case constitutes either (a) Refinancing Indebtedness or (b) Subordinated Indebtedness or
Guarantor Subordinated Indebtedness Incurred pursuant to the first paragraph of the covenant
described under “— Limitation on Indebtedness”, which sale occurs substantially concurrently
with, or to the extent declared at the time of sale for such purpose, within 60 days of, such
purchase, repurchase, redemption, defeasance or other acquisition or retirement; provided,
however, that such purchase, repurchase, redemption, defeasance, acquisition or retirement will be
excluded in subsequent calculations of the amount of Restricted Payments;
(3) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of
Disqualified Capital Shares of the Company or a Restricted Subsidiary made by exchange for or
out of the proceeds of the sale of Disqualified Capital Shares of the Company or a Restricted
Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to the
covenant described under “— Limitation on Indebtedness” and that in each case constitutes either
(a) Refinancing Indebtedness or (b) Subordinated Indebtedness or Guarantor Subordinated
Indebtedness Incurred pursuant to the first paragraph of the covenant described under
“— Limitation on Indebtedness”, which sale occurs substantially concurrently with, or to the
extent declared at the time of sale for such purpose, within 60 days of, such purchase, repurchase,
redemption, defeasance or other acquisition or retirement; provided, however, that such purchase,
repurchase, redemption, defeasance, acquisition or retirement will be excluded in subsequent
calculations of the amount of Restricted Payments;
(4) so long as no Event of Default has occurred and is continuing, the purchase, repurchase,
redemption or other acquisition, cancellation or retirement for value of Capital Shares of the
Company or any Restricted Subsidiary of the Company or any direct or indirect Parent Company
held by any existing or former employees or management of the Company or any Subsidiary of
the Company or their assigns, estates or heirs, in each case in connection with the repurchase
provisions under employee share option or share purchase agreements or other agreements to
compensate management employees; provided that such purchases, repurchases, redemptions or
other acquisitions pursuant to this clause will not exceed €0.5 million in the aggregate during any
calendar year (with any unused amounts available to be used in the succeeding 24 months);
provided, further, that the amount of any such purchase, repurchase, redemption or other
acquisition will be included in subsequent calculations of the amount of Restricted Payments;
(5) repurchases of Capital Shares deemed to occur upon the exercise of share options, warrants or
other convertible securities if such Capital Shares represents a portion of the exercise price
thereof; provided, however, that such repurchases will be excluded from subsequent calculations
of the amount of Restricted Payments;
(6) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of
any Subordinated Indebtedness of the Company (i) at a purchase price not greater than 101% of
the principal amount of such Subordinated Indebtedness in the event of a Change of Control (plus
accrued and unpaid interest thereon) or (ii) at a purchase price not greater than 100% of the
principal amount thereof in accordance with provisions similar to those provided in the
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“— Limitation on Sales of Assets and Subsidiary Shares” covenant; provided that, prior to or
simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or
retirement, the Issuer has made the Change of Control Offer or Asset Disposition Offer, as
applicable, as provided in such covenant with respect to the Notes and has completed the
repurchase or redemption of all Notes validly tendered for payment and not withdrawn in
connection with such Change of Control Offer or Asset Disposition Offer, as the case may be; and
provided, further, that such purchase, redemption or other acquisition will be excluded from
subsequent calculations of the amount of Restricted Payments;
(7) dividends or distributions or redemption payments paid by the Company within 60 days after the
date of declaration of dividend or distribution or of the giving of the redemption notice, as the case
may be, if a at such date of declaration or notice such dividend would have complied with this
covenant; provided, however, that such payment (without duplication of the relevant dividend)
will be included in subsequent calculations of the amount of Restricted Payments;
(8) so long as no Default or Event of Default has occurred and is continuing, the declaration and
payments and dividends on Disqualified Capital Shares issued pursuant to the covenant described
under “— Limitations on Indebtedness”; provided, however, that such dividends will be excluded
in subsequent calculations of the amount of Restricted Payments;
(9) cash payments in lieu of the issuance of fractional shares in connection with stock dividends,
splits or combinations, the exercise of warrants, options or other securities convertible into or
exchangeable for Capital Shares of the Company; provided, however, that any such cash payment
shall not be for the purpose of evading the limitation of the covenant described under this
subheading (as determined in good faith by the Supervisory Board of the Company); provided,
further, that such payments will be included in subsequent calculations of the amount of
Restricted Payments;
(10) a Restricted Payment of up to the amount required by the Acquisition Agreement to be advanced
by Target as an advanced payment for the dividend for the business year 2006, on or prior to the
consummation of the Austrian Acquisition, consisting of a dividend by Target set-off against the
amount of any such advanced payment; provided that the amount of such Restricted Payment will
be excluded from the calculations of the amount of Restricted Payments; and
(11) Restricted Payments in an aggregate amount which, when taken together with all other Restricted
Payments made pursuant to this clause (11) and then outstanding, will not exceed €5.0 million;
provided that the amount of such Restricted Payments will be included in calculations of the
amount of Restricted Payments.
The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of
such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company,
the Issuer or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The Fair
Market Value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall
be conclusively established at the time such Restricted Payment is made by the determination of the Supervisory
Board of the Company acting in good faith.
Limitation on Liens
The Company and the Issuer will not, and the Company will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur or suffer to exist any Lien (other than Permitted Liens) upon any of its
property or assets (including Capital Shares), whether owned on the date of the Indenture or thereafter acquired,
securing any Indebtedness of the Company or any of its Restricted Subsidiaries, unless contemporaneously
therewith effective provision is made to secure the Indebtedness due under the Indenture and the Notes or, in
respect of Liens on any Restricted Subsidiary’s property or assets, any Subsidiary Guarantee of such Restricted
Subsidiary, equally and ratably with (or prior to in the case of Liens with respect to Subordinated Obligations or
Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured by such Lien for so long as
such Indebtedness is so secured. Any Lien created for the benefit of the Holders of the Notes pursuant to the
preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally released
and discharged upon (i) the release and discharge of the initial Lien (and any subsequent Lien which would have
constituted an initial Lien), (ii) the full, final and irrevocable payment of all amounts payable by the Issuer, the
Company and the Guarantors under the Notes, the Intercompany Proceeds Note, the Indenture and the
Guarantees or (iii) legal defeasance or satisfaction and discharge of the Notes as provided under “— Defeasance”
and “— Satisfaction and Discharge”, respectively.
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Impairment of Security Interest
The Company and the Issuer will not, and the Company will not permit any of its Restricted Subsidiaries
to, take or knowingly or negligently omit to take, any action which action or omission would reasonably be
expected to have the result of materially impairing the security interest with respect to the Collateral for the
benefit of the Trustee and the Holders of the Notes (it being understood that the Incurrence of Liens permitted by
this covenant (including any release and re-taking of a security interest in connection therewith) shall under no
circumstances be deemed to materially impair such security interest), and the Company and the Issuer will not,
and the Company will not permit any of its Restricted Subsidiaries to, grant to any Person other than the Trustee
for the benefit of the Trustee and the holders of the Notes, any interest whatsoever in any of the Collateral, except
for Permitted Collateral Liens; provided, however, that any security relating to the Collateral may be amended,
extended, renewed, restated, supplemented or otherwise modified or replaced to (a) allow for the release of all or
a part thereof as described under “Release of Collateral”, or (b) if contemporaneously with any such action, the
Issuer delivers to the Trustee either (1) a solvency opinion, in form and substance reasonably satisfactory to the
Trustee, from a Qualified Financial Advisor confirming the solvency of the Company and its Subsidiaries, taken
as a whole, after giving effect to any transactions related to such amendment, extension, renewal, restatement,
supplement, modification or replacement, or (2) an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment,
extension, renewal, restatement, supplement, modification or replacement, the Lien or Liens created under the
Security so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens not
otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or
Liens were not otherwise subject to, immediately prior to such amendment, extension, renewal, restatement,
supplement, modification or replacement. In the event that the Issuer complies with the requirements of this
covenant, the Trustee shall (subject to customary protections and indemnifications) consent to any such
amendment, extension, renewal, restatement, supplement, modification or replacement without the need for
instructions from holders of the Notes.
Future Subsidiary Guarantors; Future Share Pledges

The Company:
(1) will cause any Significant Subsidiary that is not a Guarantor (including any member of the Target
Group) that, directly or indirectly, by way of the pledge of any intercompany note or otherwise,
assumes, Guarantees or in any other manner becomes liable with respect to any third-party interest
bearing Indebtedness for borrowed money of any Guarantor, the Issuer or any Finance Subsidiary
to (i) execute and deliver to the Trustee a supplemental indenture pursuant to which such
Significant Subsidiary will, to the maximum extent permitted by law, Guarantee payment of the
Notes on the same terms and conditions as those set forth in the Indenture and (ii) to the maximum
extent permitted by law, waive and not in any manner whatsoever claim or take the benefit or
advantage of any rights of reimbursement, indemnity or subrogation or any other rights against the
Company or a Restricted Subsidiary as a result of any payment by such Significant Subsidiary
under its Notes Guarantee; and
(2) following the consummation of any acquisition (other than the Austrian Acquisition) subsequent
to the Issue Date in which all or a portion of the assets acquired in such acquisition are held by a
newly formed or newly acquired Significant Subsidiary of the Company or a Restricted Subsidiary
(a “First Tier Acquired Company”), will or will cause the direct parent of such First Tier Acquired
Company to execute and deliver to the Collateral Agent a share pledge pursuant to which the
Company or such direct parent will, to the maximum extent permitted by law, pledge the Capital
Shares of such First Tier Acquired Company held by the Company or such direct parent on a
first-priority basis on the same terms and conditions as the Share Pledges, and such share pledge
will constitute a “Share Pledge” for purposes of the Indenture and the applicable Security
Documents;
provided, however, that no Restricted Subsidiary described in (1) or (2) above will be required to become a
Guarantor (and neither the Company nor any direct parent of a First Tier Acquired Company will be required to
grant a Share Pledge of the Capital Shares of such Person) to the extent and for so long as a consequence of the
Incurrence of such Guarantee or Share Pledge would be reasonably likely to result in any violation of applicable
law that cannot be avoided or otherwise prevented through measures reasonably available to the Company, such
Significant Subsidiary or such direct parent, any liability for the officers, directors or shareholders of such
Significant Subsidiary or such Direct Parent or any current or future cost, expense, liability or obligation
(including any tax) other than out-of-pocket expenses and other expenses incurred in connection with any
governmental or regulatory filings.
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Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary of the Company to:
(1) pay dividends or make any other distributions on or in respect of its Capital Shares or pay any
Indebtedness or other obligations owed to the Company, the Issuer or any Restricted Subsidiary of
which it is a Subsidiary;
(2) pay Indebtedness owed to or make loans or advances to the Company, the Issuer or any Restricted
Subsidiary of which it is a Subsidiary; or
(3) transfer any of its property or assets to the Company, the Issuer or any Restricted Subsidiary of
which it is a Subsidiary;
provided that (x) the priority of any Preferred Shares in receiving dividends or liquidating distributions prior to
dividends or liquidating distributions being paid on Common Shares and (y) the subordination of (including but
not limited to, the application of any standstill requirements to) loans or advances made to the Company or the
Issuer by a Restricted Subsidiary to other Indebtedness Incurred by the Company, the Issuer or any Restricted
Subsidiary, shall not be deemed to constitute such an encumbrance or restriction.
The preceding provisions will not prohibit:
(1) any encumbrance or restriction pursuant to an agreement or instrument in effect at or entered into
on the date of the Indenture or the Acquisition Closing Date or otherwise in connection with the
Transactions, including, without limitation, the Revolving Credit Facilities and the Security
Documents as in effect on such date;
(2) any encumbrance or restriction pursuant to an agreement or other instrument of or relating to a
Person or asset acquired by the Company or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other than such assets or
Person, or the property or assets of the Person, so acquired;
(3) any encumbrance or restriction that amends, extends, renews, refinances, modifies, restates,
supplements, refunds or replaces any encumbrance or restriction referred to in clause (1), (2) or
(11) of this paragraph or this clause (3); provided, however, that the encumbrances and restrictions
contained in any such amendment, extension, renewal, refinancing, modification, restatement,
supplement, refunding or replacement are not materially more restrictive with respect to dividend
or other payment restrictions than existed prior thereto;
(4) any encumbrance or restriction:
(a) that restricts in a customary manner the subletting, assignment or transfer of any property
or asset that is subject to a lease, license or similar contract, or the assignment or transfer
of any such lease, license or other contract;
(b) contained in mortgages, pledges or other security agreements permitted under the
Indenture and the Security Documents securing Indebtedness of the Company or a
Restricted Subsidiary to the extent such encumbrances or restrictions restrict the transfer of
the property subject to such mortgages, pledges or other security agreements; or
(c) pursuant to customary provisions restricting dispositions of real property interests set forth
in any reciprocal easement agreements of the Company or any Restricted Subsidiary;
(5) any encumbrance or restriction with respect to Purchase Money Obligations and Capitalized Lease
Obligations permitted under the Indenture, in each case that impose encumbrances or restrictions
of the nature described in clause (3) of the first paragraph of this covenant on the property so
acquired;
(6) any encumbrance or restriction contained in a joint venture agreement or asset or stock sale
agreement (including any escrow agreement related thereto) entered into in good faith to the
extent such encumbrances or restrictions restrict the transfer of the property, or is an encumbrance
or restriction with respect to assets, subject to such joint venture agreement or asset or stock sale
agreement (including any escrow agreement related thereto), or any encumbrances or restrictions
in a customer or supplier agreement entered into in the ordinary course of business (to the extent
that, in the case of a joint venture agreement, the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable agreements and will
not materially affect the ability of the Issuer to make payments of the principal, interest and
Additional Amounts when they become due and payable, in each case determined in good faith by
the Supervisory Board of the Company);
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(7) net worth provisions in leases and other agreements entered into by the Company or any
Restricted Subsidiary in the ordinary course of business;
(8) restrictions on the transfer of assets subject to any Lien permitted under the Indenture;
(9) encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule,
regulation or order or required by any regulatory authorities;
(10) any agreement or instrument relating to Indebtedness of the Company or a Restricted Subsidiary
permitted to be incurred after the Issue Date under the covenant entitled “— Limitation on
Indebtedness” if the encumbrances or restrictions contained in the relevant agreement, taken as a
whole, are not materially more disadvantageous to the Holders of the Notes than is customary in
comparable financings or agreements (for which a determination in good faith by the Supervisory
of the Company shall be conclusive) and either (a) the Company’s Supervisory Board has
determined in good faith that such encumbrance or restriction will not materially affect the
Issuer’s ability to make payments of principal, interest and Additional Amounts on the Notes
when they become due and payable or (b) such encumbrance or restriction applies only if a
Default occurs in respect of a payment or financial covenant relating to such Indebtedness;
(11) any encumbrances or restrictions with respect to the Indenture, the Notes, any Notes Guarantee or
the Security Documents; or
(12) (a) restrictions on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business; (b) customary provisions contained in licenses of
intellectual property and other similar agreements entered into in the ordinary course of business;
and (c) contracts entered into in the ordinary course of business, not related to Indebtedness, that
do not, individually or in the aggregate, detract from the value of property or assets of the
Company or any Restricted Subsidiary in any manner material to the Company or such Restricted
Subsidiary.
Limitation on Sales of Assets and Subsidiary Shares
The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset
Disposition unless:
(1) the Company or a Restricted Subsidiary, as the case may be, receives consideration at least equal
to the Fair Market Value (such Fair Market Value to be determined on the date of contractually
agreeing to such Asset Disposition), as determined in good faith by a responsible officer of the
Company or, in the case of Capital Shares, property or assets having an aggregate value in excess
of €2.0 million, the Supervisory Board of the Company (including as to the value of all non-cash
consideration), of the property, shares and assets subject to such Asset Disposition;
(2) at least 75% of the consideration from such Asset Disposition received by the Company or a
Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the
Company or a Restricted Subsidiary, as the case may be:
(a) first, to the extent the Company or any Restricted Subsidiary, as the case may be, elects (or
is required by the terms of any Indebtedness) to prepay, repay, redeem or purchase
Indebtedness (other than (i) any Disqualified Capital Shares or Subordinated Indebtedness
of the Company or Guarantor Subordinated Indebtedness of a Guarantor or Preferred
Shares of a Guarantor and (ii) Indebtedness owed to the Issuer or an Affiliate of the
Issuer); provided, that the Issuer or the relevant Restricted Subsidiary will permanently
reduce such Indebtedness and will cause the related commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid, repaid or
purchased; and
(b) second, to the extent of the balance of such Net Available Cash after application in
accordance with clause (a), to the extent the Company or such Restricted Subsidiary elects,
to invest in or purchase Replacement Assets within 365 days from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; provided that the
Company or such Restricted Subsidiary shall be deemed to have applied Net Available
Cash in accordance with this clause (3)(b) within such 365-day period if, within such
365-day period, it has entered into a binding agreement to invest such Net Available Cash
and continues to use all reasonable efforts to so apply such Net Available Cash as soon as
practicable thereafter, and that upon any abandonment or termination of such agreement
after such 365-day period, the Net Available Cash not applied will constitute Excess
Proceeds;
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provided, that pending the final application of any such Net Available Cash in accordance with clauses (a) and
(b) above, the Company and its Restricted Subsidiaries (1) will, in the case of an Asset Disposition involving
Collateral, place all cash received in connection with such Asset Disposition (“Asset Sale Cash Collateral”) in a
designated bank account or accounts pending application of such cash in accordance with this covenant over
which the Notes and the Notes Guarantees will be granted a first-priority security interest and (2) may, in the
case of an Asset Disposition not involving Collateral, temporarily reduce Indebtedness or otherwise invest such
Net Available Cash in any manner not prohibited by the Indenture.
Any Net Available Cash from Asset Dispositions that is not applied or invested as provided in the preceding
paragraph will be deemed to constitute “Excess Proceeds”. On the 366th day after an Asset Disposition, if the
aggregate amount of Excess Proceeds exceeds €10.0 million, the Issuer will be required to make an offer (“Asset
Disposition Offer”) to (a) all Holders and (b) to the extent required by the terms of other Pari Passu Indebtedness
(“Other Asset Disposition Indebtedness”) that require the Issuer or Company to make an offer to purchase Other
Asset Disposition Indebtedness with the proceeds from any Asset Disposition, to all holders of Other Asset
Disposition Indebtedness to purchase the maximum principal amount of Notes and any Other Asset Disposition
Indebtedness to which the Asset Disposition Offer applies that may be purchased in an amount equal to the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and Other Asset
Disposition Indebtedness (or, in the event such Other Asset Disposition Indebtedness was issued with significant
original issue discount, an amount equal to 100% of the accreted value thereof) plus accrued and unpaid interest,
and premium and Additional Amounts, if any, to the date of purchase, in accordance with the procedures set forth in
the Indenture or the agreements governing Other Asset Disposition Indebtedness, as applicable, which in the case of
the Notes will be in a principal amount of €50,000 or an integral multiple of €1,000 thereof. To the extent that the
aggregate amount of Notes and Other Asset Disposition Indebtedness so validly tendered and not properly
withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for any purpose not otherwise prohibited by any other covenant contained in the
Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Other Asset Disposition
Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and Other Asset Disposition Indebtedness to be purchased on a pro rata basis on the basis of
the aggregate principal amount of tendered Notes and Other Asset Disposition Indebtedness (or, in the event such
Other Asset Disposition Indebtedness was issued with significant original issue discount, an amount equal to 100%
of the accreted value thereof). In connection with any such prepayment, repayment, redemption or purchase of
Other Asset Disposition Indebtedness, the Company or the relevant Subsidiary Guarantor will retire such
Indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Upon completion of such Asset Disposition Offer, the amount of
Excess Proceeds shall be reset at zero.
The Asset Disposition Offer will remain open for a period of 20 Business Days following its
commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition
Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the
“Asset Disposition Purchase Date”), the Issuer will purchase the principal amount of Notes and Other Asset
Disposition Indebtedness required to be purchased pursuant to this covenant (the “Asset Disposition Offer
Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes and Other
Asset Disposition Indebtedness validly tendered in response to the Asset Disposition Offer.
If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional interest will be payable to Holders who
tender Notes pursuant to the Asset Disposition Offer.
On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for
payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes and Other
Asset Disposition Indebtedness or portions of Notes and Other Asset Disposition Indebtedness so validly
tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the amount of the
Asset Disposition Offer has been validly tendered and not properly withdrawn, all Notes and Other Asset
Disposition Indebtedness so validly tendered and not properly withdrawn, in each case in integral multiples of
€50,000 (or in the case of Other Asset Disposition Indebtedness, such multiples as required thereby). The Issuer
will deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for
payment by the Issuer in accordance with the terms of this covenant. The Issuer or the Paying Agent, as the case
may be, will promptly mail or deliver to each tendering Holder of Notes an amount equal to the purchase price of
the Notes or Other Asset Disposition Indebtedness so validly tendered and not properly withdrawn by such
holder or lender, as the case may be, and accepted by the Issuer for purchase, and the Issuer will promptly issue a
new Note, and the Trustee, upon delivery of an Officers’ Certificate from the Issuer will authenticate and mail or
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deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered; provided that each such new Note will be in a principal amount of €50,000 and an integral multiple
of €1,000 thereof. Any Note not so accepted will be promptly mailed or delivered by the Issuer to the Holder
thereof. The Issuer will give notice of the commencement and results of the Asset Disposition Offer in
accordance with the procedures described under “— Notices.”
For the purposes of this covenant, the following will be deemed to be cash:
(1) the full and unconditional release of each of the Company, the Issuer and the Restricted
Subsidiary, as the case may be, from the repayment of, or all liability on, Indebtedness in
connection with such Asset Disposition (in which case the Issuer, the Company or the Restricted
Subsidiary will, without further action, be deemed to have applied such deemed cash to
Indebtedness in accordance with clause 3(a) of the first paragraph above); and
(2) securities, notes or other obligations received by the Company or any Restricted Subsidiary of the
Company that are converted no later than 90 days following the receipt thereof by the Company or
such Restricted Subsidiary into cash or Cash Equivalents.
The Issuer will comply with the requirements of any securities laws or regulations in connection with the
repurchase of Notes pursuant to an Asset Disposition Offer, including, without limitation, Rule 14e-1 under the
Exchange Act and any other applicable securities laws and regulations. To the extent that the provisions of any
securities or other applicable laws or regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable laws and regulations and will not be deemed to have breached its obligations under the
“Limitation on Sales of Assets and Subsidiary Shares” provision of the Indenture by virtue of any conflict.
The Company will not be required to make an Asset Disposition Offer if a third party makes the Asset
Disposition Offer in the manner, at the times and otherwise in compliance with the requirements described in the
Indenture applicable to the Asset Disposition Offer and purchases the Asset Disposition Offer Amount of all
Notes and Pari Passu Indebtedness validly tendered and not withdrawn in response to the Asset Disposition
Offer.
The ability of the Issuer to repurchase Notes in an Asset Disposition Offer may be limited by a number of
factors, including that the Revolving Credit Facilities or other Indebtedness may not at such time require
prepayment in amounts sufficient to fund the Company’s obligations in connection with the Asset Disposition
Offer, and the ability of the Company to pay cash to the Holders of the Notes upon an Asset Disposition Offer
may be limited by its then existing financial resources. There can be no assurance that sufficient funds will be
available to the Company when necessary to make any necessary repurchases.
Limitations on Transactions with Affiliates
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into or conduct any transaction or a series of related transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the benefit of, any Affiliate of the
Company (an “Affiliate Transaction”) unless:
(1) the terms of such Affiliate Transaction are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could reasonably be expected to be obtained in a
comparable transaction at the time of such transaction in arm’s-length dealings with a Person who
is not such an Affiliate;
(2) in the event such Affiliate Transaction involves an aggregate consideration in excess of
€5.0 million, a majority of the members of the Supervisory Board of the Company who are
disinterested with respect to such Affiliate Transaction have determined in good faith that the
criteria set forth in clause (1) are satisfied and have otherwise approved the relevant Affiliate
Transaction; and
(3) in the event such Affiliate Transaction involves an aggregate consideration in excess of
€10.0 million, the Company shall have received a written opinion from a Qualified Financial
Advisor that such Affiliate Transaction either is fair, from a financial point of view, to the
Company and the Restricted Subsidiaries or is not less materially favorable to the Company and
its Restricted Subsidiaries than could reasonably have been expected to be obtained in a
comparable transaction at such time on an arm’s-length basis from a Person that is not an
Affiliate.
The preceding paragraph will not apply to:
(1) any Restricted Payment (other than a Permitted Investment) permitted to be made pursuant to the
covenant described under “— Limitation on Restricted Payments”;
(2) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment agreements and other compensation arrangements,
options to purchase Capital Shares of the Company, restricted share plans, long-term incentive
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plans, share appreciation rights plans, participation plans or similar employee benefits plans and/
or indemnity provided on behalf of directors, officers, consultants and employees approved by the
Supervisory Board of the Company;
(3) loans or advances to employees, officers or directors or members of the Supervisory Board of the
Company or any Restricted Subsidiary but in any event not to exceed €1 million in the aggregate
outstanding at any one time with respect to all loans or advances made since the Issue Date;
(4) any transaction between the Company and its Restricted Subsidiary or between Restricted
Subsidiaries;
(5) Guarantees issued by the Company or a Restricted Subsidiary in accordance with “— Limitation
on Indebtedness”;
(6) the performance of obligations of the Company or any Restricted Subsidiary under the terms of
any agreement to which the Company or any Restricted Subsidiary is a party on the Issue Date, as
these agreements may be amended, modified, supplemented, extended or renewed from time to
time; provided, however, that any future amendment, modification, supplement, extension or
renewal entered into after the Issue Date will (a) comply with clauses (1) and (2) of the first
paragraph of this “— Limitation on Transactions with Affiliates” covenant and (b) be permitted to
the extent that its terms, taken as a whole, are not more materially disadvantageous to the Holders
than the terms of the agreements in effect on the Issue Date;
(7) transactions with joint ventures entered into in the ordinary course of business;
(8) transactions with or for the benefit of a Person (other than an Unrestricted Subsidiary of the
Company) that is an Affiliate of the Company solely because the Company owns, directly or
indirectly through a Restricted Subsidiary, an equity interest in, or controls, such Person;
(9) the Transactions;
(10) the performance of obligations by the Company or a Restricted Subsidiary under the terms of any
agreements existing on the Acquisition Closing Date, as these agreements may be amended,
modified, supplemented, extended or renewed from time to time; provided, however, that any
future amendment, modification, supplement, extension or renewal entered into after the
Acquisition Date will (a) comply with clauses (1) and (2) of the first paragraph of this “—
Limitation on Transactions with Affiliates” covenant and (b) be permitted to the extent that its
terms, taken as a whole, are not more materially disadvantageous to the Holders than the terms of
those agreements in effect on the Acquisition Closing Date; and
(11) any issuance of Capital Shares (other than Disqualified Capital Shares) of the Company.
Limitation on Layering
The Company will not, and the Company will not permit the Issuer or any Subsidiary Guarantor to, Incur
any Indebtedness if such Indebtedness is contractually subordinate or junior in ranking in any respect to any
Senior Indebtedness of the Company or such Guarantor unless such Indebtedness is contractually subordinated in
right of payment to the Notes or the applicable Notes Guarantee. Unsecured Indebtedness is not deemed to be
subordinate or junior to secured Indebtedness merely because it is unsecured and Indebtedness that is not
Guaranteed by a particular Person is not deemed to be subordinate or junior to Indebtedness that is so Guaranteed
merely because it is not so Guaranteed. For the avoidance of doubt, junior liens, second liens and other
contractual arrangements that provide for priorities among holders of the same or different issues of Indebtedness
with respect to any collateral or the proceeds of collateral or tranching of Indebtedness under Credit Facilities
shall not constitute subordination in right of payment.
Reports
The Company will provide to the Trustee and the Holders and make available to potential investors:
(1) within 120 days after the end of the Company’s fiscal year, annual reports of the Company
containing: (a) information with a level of detail that is substantially comparable to the sections in
this Offering Memorandum entitled “Selected Consolidated Financial Data and Other
Information”, “Business”, “Management”, “Related Party Transactions” and “Description of
Other Indebtedness”; (b) the Company’s and the Issuer’s audited consolidated (i) balance sheets as
of the end of the three most recent fiscal years (or such shorter period as the Issuer has been in
existence) and (ii) income statements and statements of cash flow for the three most recent fiscal
years (or such shorter period as the Issuer has been in existence), in each case prepared in
accordance with IFRS and including complete footnotes to such financial statements (including a
footnote or other applicable disclosure with respect to guarantor and non-guarantor subsidiaries)
and the report of the independent auditors on the financial statements; (c) an operating and
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financial review of the three most recent fiscal years for the Company and its Restricted
Subsidiaries, including a discussion of (i) the financial condition and results of operations of the
Company on a consolidated basis and any material changes between such two fiscal years and
(ii) any material developments in the business of the Company and its Restricted Subsidiaries; and
(d) pro forma income statement and balance sheet information of the Company, together with
explanatory footnotes, for any Change of Control or material acquisitions, dispositions or
recapitalizations that have occurred since the beginning of the most recently completed fiscal year,
unless pro forma information has been provided in a previous report pursuant to paragraph
(2)(c) below;
(2) within 60 days after the end of each day of the first three fiscal quarters in each fiscal year of the
Company, quarterly reports containing: (a) the Company’s and the Issuer’s unaudited condensed
consolidated (i) balance sheet as of the end of such quarter and (ii) statements of income and cash
flow for the quarterly and year to date periods ending on the most recent balance sheet date, and
the comparable prior year periods (in the case of the Issuer, if it was in existence in such prior year
period), in each case prepared in accordance with IFRS; (b) an operating and financial review of
such periods for the Company and its Restricted Subsidiaries including a discussion of (i) the
financial condition and results of operations of the Company on a consolidated basis and material
changes between the current period and the period of the prior year and (ii) any material
developments in the business of the Company and its Restricted Subsidiaries; (c) pro forma
income statement and balance sheet information of the Company, together with explanatory
footnotes, for any Change of Control or material acquisitions, dispositions or recapitalizations that
have occurred since the beginning of the most recently completed fiscal quarter; and
(3) promptly from time to time after the occurrence of any of the events listed in (a) to (f) of this
clause (3) information with respect to (a) any change in the independent accountants of the
Company or any of its Significant Subsidiaries, (b) resignation of any member of the Supervisory
Board or the Management Board of either the Issuer or of the Company, (c) any material
acquisition or disposal, (d) any material event that the Company or any Restricted Subsidiary
announces publicly and (e) any information that the Issuer is required to make publicly available
under the requirements of the Euro MTF Market or the Luxembourg Stock Exchange.
If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries and any such
Unrestricted Subsidiary or group of Unrestricted Subsidiaries constitute Significant Subsidiaries of the Company,
then the annual and quarterly information required by the first two clauses of this covenant shall include a
reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the
financial condition and results of operations of the Company and the Restricted Subsidiaries separate from the
financial condition and results of operations of such Unrestricted Subsidiaries of the Company.
In addition, so long as the Notes remain outstanding and during any period during which the Issuer is not
subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant to Rule 12g3-2(b), the Issuer
shall furnish to the Holders and to prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
All financial statement information required under this covenant shall be prepared on a consistent basis in
accordance with IFRS. In addition, all financial statement information and all reports required under this
covenant shall be presented in the English language.
Contemporaneously with the provision of each report discussed above, the Company will also (a) file a
press release through the newswire service of Bloomberg, or, if Bloomberg does not then operate, any similar
agency, (b) post such report on the Company’s website and (c), for so long as the Notes are listed on the
Luxembourg Stock Exchange and traded on Euro MTF Market and the rules of such stock exchange shall so
require, make the above information available through the offices of the Paying Agent in Luxembourg.
Limitation on Unrestricted Subsidiaries

The Company may designate after the date of the Indenture any Subsidiary (other than a Guarantor) as an
“Unrestricted Subsidiary” under the Indenture (a “Designation”) only if:
(a) no Default shall have occurred and be continuing at the time of or after giving effect to such
Designation;
(b) either (i) the Subsidiary to be so designated has total assets of €1,000 or less or (ii) the Company
would be permitted to make an Investment at the time of Designation (assuming the effectiveness
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of such Designation) pursuant to the first paragraph of “— Limitation on Restricted Payments”
above in an amount (the “Designation Amount”) equal to the greater of (1) the net book value of
the Company’s interest in such Subsidiary calculated in accordance with IFRS or (2) the Fair
Market Value of the Company’s interest in such Subsidiary;
(c) such Unrestricted Subsidiary does not own any Capital Shares of the Issuer, the Company or any
Restricted Subsidiary of the Company which is not simultaneously being designated an
Unrestricted Subsidiary; and
(d) immediately prior to the time of such designation, no Capital Shares of such Subsidiary are the
subject of a Share Pledge.
In the event of any such Designation, the Company will be deemed to have made an Investment
constituting a Restricted Payment pursuant to the covenant “— Limitation on Restricted Payments” for all
purposes of the Indenture in the Designation Amount.
The Indenture will also provide that the Company will not and will not cause or permit any Restricted
Subsidiary to at any time (a) provide a guarantee of, or similar credit support for, or subject any of its property or
assets (other than the Capital Shares of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of
any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness)
or (b) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary, except to the extent
permitted under the covenant “— Limitation on Indebtedness”. For purposes of the foregoing, the Designation of
a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the
Subsidiaries of such Subsidiary as Unrestricted Subsidiaries.
The Company may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”)
if:
(a) no Default or Event of Default shall have occurred and be continuing at the time of and after
giving effect to such Redesignation;
(b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following
such Redesignation would, if incurred at such time, have been permitted to be incurred for all
purposes of the Indenture; and
(c) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than
Indebtedness that would be permitted under the second paragraph of the covenants “— Limitation
on Indebtedness”), immediately after giving effect to such proposed Redesignation, and after
giving pro forma effect to the incurrence of any such Indebtedness of such redesignated
Subsidiary as if such Indebtedness was incurred on the date of the Redesignation, the Company
could incur €1.00 of additional Indebtedness (other than Indebtedness that would be permitted
under the second paragraph of the covenants “— Limitation on Indebtedness”) pursuant to the
covenant described under “— Limitation on Indebtedness”.
All Designations and Redesignations must be evidenced by a resolution of the Supervisory Board of the
Company delivered to the Trustee certifying compliance with the foregoing provisions.
Merger and Consolidation

The Company will not and will not permit the Issuer to, in a single transaction or through a series of
related transactions, consolidate or otherwise combine with or merge with or into, or convey, transfer or lease all
or substantially all its assets to (“merge”), any Person; provided that the Issuer or the Company may merge with
another Person if:
(1) the resulting, surviving or transferee Person (the “Successor”) will be a Person organized and
existing under the laws of any European Union member state which was such a member on the
date of the Indenture or any State of the United States or the District of Columbia and the
Successor (if not the Company or the Issuer, as the case may be) will expressly assume by
supplemental indenture and any other relevant supplemental security document required under the
Security Documents, executed and delivered to the Trustee and the Collateral Agent, in form
reasonably satisfactory to the Trustee and the Collateral Agent, all the obligations of the Company
or the Issuer, as the case may be, under the Notes, the Company’s Guarantee of the Notes, the
Indenture and the Security Documents, as applicable, and the Indenture, the Notes, the Company’s
Guarantee of the Notes and the Security Documents shall remain in full force and effect as so
supplemented (and any Notes Guarantees will be confirmed as applying to such Successor’s
obligations (in the case of an Issuer merger));
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(2) immediately after giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing;
(3) immediately after giving effect to such transaction on a pro forma basis (on the assumption that
the transaction occurred on the first day of the four-quarter period for which financial statements
are available ending immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction), the Successor (or the Company in the
case of an Issuer merger) would be able to Incur at least an additional €1.00 of Indebtedness
pursuant to the first paragraph of the covenant described under “— Limitation on Indebtedness”;
(4) the Company or the Issuer, as the case may be, shall have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the Indenture;
(5) in the case of a consolidation, merger, conveyance, transfer or lease of the Issuer with another
Person, the Company shall have used its reasonable best efforts to deliver to the Trustee an
Opinion of Counsel of recognized standing with respect to income tax matters in the jurisdiction
in which the Issuer is organized, resident for tax purposes or engaged in business, in both cases
(a) and (b) to the effect that Holders or beneficial owners of the Notes will not recognize income,
gain or loss for U.S. federal income or for French or Polish tax purposes as a result of such
consolidation, merger, conveyance, transfer or lease and will be subject to U.S. federal income
and French and Polish tax on the same amounts and in the same manner and at the same times as
would have been the case if such consolidation, merger, conveyance, transfer or lease had not
occurred.
For purposes of this covenant, the sale, lease, conveyance, assignment, transfer, or other disposition of all
or substantially all of the assets of one or more Restricted Subsidiaries, which assets, if held by the Company
instead of such Subsidiaries, would constitute all or substantially all of the assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially all of the assets of the Company.
The Successor (if other than the Company or the Issuer, as the case may be) will succeed to, and be
substituted for, and may exercise every right and power of, the Company or the Issuer, as the case may be, under
the Indenture, the Notes, the Company’s Guarantee of the Notes, the Intercompany Proceeds Note, the
Acquisition On-Loan, and the Security Documents (and other relevant agreements hereunder), and, upon such
substitution, the predecessor Person shall be released, but, in the case of a lease of all or substantially all its
assets, the predecessor company will not be released from its obligations under the Indenture, the Company’s
Guarantee of the Notes or the Notes, as applicable.
Notwithstanding the preceding clause (3) (which does not apply to transactions referred to in this
sentence), (x) any Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) may
consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to any
Guarantor and (y) the Company or the Issuer may merge with an Affiliate of the Company primarily for the
purpose of reincorporating in another jurisdiction to receive a tax benefit, provided, inter alia, that the provisions
of clause (5) are complied with.
In addition, the Company will not permit any Subsidiary Guarantor to merge with any Person (other than
the Company or any Subsidiary Guarantor) unless:
(1) the resulting, surviving or transferee Person is organized and existing under the laws of any
European Union member state which was such a member on the date of the Indenture, any State
of the United States or the District of Columbia and such Person (if not the Subsidiary Guarantor)
will expressly assume, by supplemental indenture and supplemental security documents, executed
and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of
such Subsidiary Guarantor under the applicable Notes Guarantee, the Security Documents and the
Indenture and such Notes Guarantee, the Indenture and the Security Documents shall remain in
full force and effect as so supplemented (and any Notes Guarantees will be confirmed as applying
to such Person’s obligations);
(2) immediately after giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with the Indenture.
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Although there is a limited body of case law interpreting the phrase “substantially all”, there is no precise
established definition of such phrase under applicable law. Accordingly, in certain circumstances there may be a
degree of uncertainty as to whether a particular transaction would involve “all or substantially all” of the property
or assets of a Person.
The Issuer will publish a notice upon the occurrence of any of the events described above in accordance
with the provisions of the Indenture described under “— Notices” and, for so long as the Notes are listed on the
Luxembourg Stock Exchange and traded on the Euro MTF Market, and the rules of such stock exchange so
require, the Issuer will notify the Luxembourg Stock Exchange of any of the events described above.
Limitations on the Issuer

Notwithstanding anything contained in the Indenture to the contrary, the Issuer will not, and the Company
will not permit the Issuer to, engage in any business activity or undertake any other activity, except any activity
(a) relating to the offering, sale or issuance of the Notes and the Additional Notes (or debt securities of the Issuer
substantially identical to the Notes and Notes Guarantees (other than in respect of interest, maturity and
redemption provisions)), the Incurrence of Indebtedness represented by the Notes and the Additional Notes (or
debt securities of the Issuer substantially identical to the Notes and Notes Guarantees (other than in respect of
interest, maturity and redemption provisions)), lending or otherwise advancing the proceeds thereof to the
Company or any Restricted Subsidiary and any other activities in connection therewith, (b) undertaken with the
purpose of fulfilling any other obligations under the Notes, the Additional Notes, such Indebtedness, the Security
Documents or the Indenture, (c) directly related or reasonably incidental to the establishment and/or maintenance
of the Issuer’s corporate existence or (d) related to Permitted Collateral Liens.
The Issuer will not, and the Company will not permit the Issuer to, (a) Incur any Indebtedness other than
the Indebtedness represented by the Notes and, subject to compliance with the covenant described under the
caption “— Limitation on Indebtedness”, Additional Notes (or debt securities of the Issuer substantially identical
to the Notes and Notes Guarantees (other than in respect of interest, maturity and redemption provisions)), or any
Indebtedness comprised of Permitted Collateral Liens (b) issue any Capital Shares other than the issuance of its
ordinary shares to the Company (or directors’ qualifying shares or an immaterial amount of shares required to be
owned by other persons pursuant to applicable law) or (c) own any Capital Shares of any other Person or create,
own or suffer to exist any Subsidiary, direct or indirect, of the Issuer.
The Issuer will not, and the Company will not permit the Issuer to, create, Incur, assume or suffer to exist
any Lien in respect of borrowed money of any kind against or upon any of its property or assets, or any proceeds
therefrom, except for Liens to secure the payment or performance of the Notes or any Additional Notes (or debt
securities of the Issuer substantially identical to the Notes and Notes Guarantees (other than in respect of interest,
maturity and redemption provisions)) and Permitted Collateral Liens.
The Issuer shall, and the Company shall cause the Issuer to, at all times remain a Wholly Owned
Restricted Subsidiary of the Company.
For so long as any Notes are outstanding, the Company will not commence or take any action to facilitate
a winding-up, liquidation or other analogous proceeding in respect of the Issuer (except as permitted by the
covenant described under “Merger and Consolidation”).
Limitations on Sale and Leaseback Transactions

The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and
Leaseback Transaction with respect to any property unless:
(1) the Company or the Restricted Subsidiary would be entitled to:
(a) Incur Indebtedness in an amount equal to the Attributable Indebtedness with respect to the
sale and leaseback transaction under the “— Limitation on Indebtedness” covenant; and
(b) create a Lien on such property securing such Attributable Indebtedness without equally
and ratably securing the Notes pursuant to the “— Limitation on Liens” covenant;
(2) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal to the Fair
Market Value of the property that is the subject of the Sale and Leaseback Transaction; and
(3) the transfer of such property is permitted by, and the Company applies, or causes to be applied,
the proceeds of the transaction in compliance with, the “— Limitation on Sales of Assets and
Subsidiary Shares” covenant.
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Limitation on Lines of Business
The Company will not, and will not permit its Restricted Subsidiaries to, engage in any business which is
not a Permitted Business.
Payments for Consent

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay
or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the Indenture, the Notes or any Notes Guarantee unless
such consideration is offered to be paid and is paid to all Holders that consent, waive or agree to amend in the
time frame set out in the solicitation documents relating to such consent, waiver or agreement.
Listing
The Issuer will use its commercially reasonable efforts to initially list and maintain the listing of the
Notes on the Luxembourg Stock Exchange and to have the Notes traded on and have them continue to trade on
the Euro MTF Market or another international securities exchange for as long as the Notes are outstanding.
Events of Default
The following events are defined in the Indenture as “Events of Default”.
(1) the failure to pay interest or Additional Amounts on any Notes when the same becomes due and
payable and the default continues for a period of 30 days;
(2) the failure to pay the principal (or premium, if any) on any Notes at their Stated Maturity, upon
optional redemption, upon required purchase or otherwise;
(3) a default in the observance or performance of any covenant or agreement contained in the
Indenture by the Issuer or any Guarantor which default continues for a period of 60 days after the
Issuer receives written notice (other than under clauses (1) or (2)) specifying the default from the
Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes (except in
the case of a default with respect to the “— Certain Covenants — Merger and Consolidation”
covenant, which will constitute an Event of Default without such notice requirement and without
such passage of time requirement);
(4) the failure to pay at final maturity (giving effect to any applicable grace periods and any
extensions thereof) the stated principal amount of any Indebtedness of the Company or any
Restricted Subsidiary (“payment default”), or the acceleration of the final stated maturity of any
such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within five
days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration)
(the “cross acceleration provision”) if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in default for failure to pay
principal at final stated maturity or which has been accelerated (in each case with respect to which
the five day period described above has elapsed), aggregates €10.0 million or more at any time;
(5) one or more judgments (other than judgments covered in full by insurance policies issued by
reputable and creditworthy insurance companies) in an aggregate amount in excess of
€10.0 million shall have been rendered against the Company or any of its Restricted Subsidiaries
and such judgments remain undischarged, unpaid or unstayed for a period of ten days after such
judgment or judgments become final and non-appealable (the “judgment default” provision);
(6) certain events of bankruptcy affecting the Company, the Issuer or any Significant Subsidiary (or
any group of Restricted Subsidiaries that taken together (as of the date of the Company’s most
recently available financial statements) would constitute a Significant Subsidiary) (the
“bankruptcy provision”);
(7) any Notes Guarantee of the Company or a Significant Subsidiary ceases to be in full force and
effect or any Notes Guarantee of the Company or a Significant Subsidiary is declared to be null
and void and unenforceable or any Notes Guarantee of the Company of a Significant Subsidiary is
found to be invalid or any such Guarantor denies its liability under its Notes Guarantee (other than
by reason of release of a Guarantor in accordance with the terms of the Indenture); and
(8) any Security Document shall cease to be in full force and effect (other than in accordance with
their respective terms or the terms of the Indenture), or cease to be effective in all material
respects to grant to the Collateral Agent a perfected Lien on the Collateral with the priority
purported to be created thereby (the “security documents provision”).
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If an Event of Default (other than an Event of Default specified in clause (6) above with respect to the
Company or the Issuer) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued interest on all the Notes to be due and
payable by notice in writing to the Issuer and the Trustee specifying the respective Event of Default and that it is
a “notice of acceleration” (the “Acceleration Notice”), and the same shall become immediately due and payable.
If an Event of Default specified in clause (6) above with respect to the Company, the Issuer or a
Significant Subsidiary occurs and is continuing, then all unpaid principal of, and premium and Additional
Amounts, if any, and accrued and unpaid interest on all of the outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
The Indenture will provide that, at any time after a declaration of acceleration with respect to the Notes as
described in the preceding paragraph, the Holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences:
(1) if the rescission would not conflict with any judgment or decree;
(2) if all existing Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration;
(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of acceleration, has
been paid;
(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances; and
(5) in the event of the cure or waiver of an Event of Default of the type described in clause (6) of the
description above of Events of Default, the Trustee shall have received an Officers’ Certificate
and an Opinion of Counsel that such Event of Default has been cured or waived.
The Holders of a majority in principal amount of the Notes may waive any existing Default or Event of
Default under the Indenture, and its consequences, except a default in the payment of the principal of or interest
on any Notes.
Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of
the Holders, unless such Holders have indemnified or secured the Trustee to its reasonable satisfaction. Subject
to the provisions of the Indenture and applicable law, the Holders of a majority in principal amount of the
outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.
Under the Indenture, the Company is required to provide an Officers’ Certificate to the Trustee promptly
and in any event within 10 Business Days after any officer of either the Company or the Issuer obtains
knowledge of any Default or Event of Default (provided that such officers shall provide such certification at least
annually, and upon the reasonable request of the Trustee, whether or not they know of any Default or Event of
Default) that has occurred and, if applicable, describe such Default or Event of Default and the status thereof.
Defeasance
The Issuer at any time may terminate all its obligations and those of the Guarantors under the Notes and
the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust
and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen
Notes and to maintain a registrar and paying agent in respect of the Notes.
The Issuer at any time may terminate its obligations and those of the Guarantors under covenants
described under “— Certain Covenants” (other than “— Certain Covenants — Merger and Consolidation”), the
operation of the cross-default upon a payment default, cross acceleration provisions, the bankruptcy provisions
with respect to Significant Subsidiaries, the judgment default provision described under “Events of Default”
above and the limitations contained in clause (3) under “— Certain Covenants — Merger and Consolidation”
above (“covenant defeasance”).
The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option. If the Issuer exercises its legal defeasance option, payment of the Notes may not be
accelerated because of an Event of Default with respect to the Notes. If the Issuer exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in
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clause (3), (4), (5), (6) (with respect only to Significant Subsidiaries), (7) or (8) under “Events of Default” above
or because of the failure of the Issuer to comply with clause (3) under the first paragraph or clause (2) of the fifth
paragraph of “— Certain Covenants — Merger and Consolidation” above.
In order to exercise either defeasance option, the Issuer must irrevocably deposit in trust (the “defeasance
trust”) with the Trustee cash in euros or European Government Obligations or a combination thereof for the
payment of principal, premium, if any, and interest on the Notes to redemption or maturity, as the case may be,
and must comply with certain other conditions, including delivery to the Trustee of:
(1) an Opinion of Counsel of recognized standing with respect to U.S. federal income tax matters to
the effect that Holders or beneficial owners of the Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject
to U.S. federal income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not occurred (and in the case of legal
defeasance only, such Opinion of Counsel must be based on a ruling of the U.S. Internal Revenue
Service or a change in applicable U.S. federal income tax law) reasonably acceptable in form and
substance by the Trustee;
(2) an Opinion of Counsel of recognized standing with respect to income tax matters in the
jurisdiction in which the Issuer is organized, resident for tax purposes or engaged in business, to
the effect that the Holders or beneficial owners of the outstanding Notes of the relevant series will
not recognize income, gain or loss for income tax purposes in such jurisdiction as a result of such
defeasance and will be subject to income tax in such jurisdiction on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance had not occurred
reasonably acceptable in form and substance by the Trustee;
(3) an Officers’ Certificate stating that the deposit was not made by the Issuer with the intent of
defeating, hindering, delaying, defrauding or preferring any creditors of the Issuer, the Company
or any Subsidiary Guarantor;
(4) an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to
customary assumptions and exclusions) reasonably acceptable in form and substance by the
Trustee, each stating that all conditions precedent provided for or relating to legal defeasance or
covenant defeasance, as the case may be, have been complied with; and
(5) an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute or
is exempt from registration, or is qualified as, a regulated investment company under the
U.S. Investment Company Act of 1940.
Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or
registration of transfer or exchange of the Notes, as expressly provided for in the Indenture) as to all outstanding
Notes when
(1) either:
(a) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes
which have been replaced or paid and Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust) have been delivered to the Trustee for
cancellation; or
(b) all Notes not theretofore delivered to the Trustee for cancellation (1) have become due and
payable or (2) will become due and payable within one year, or are to be called for
redemption within one year, under arrangements reasonably satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the expense, of the
Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee
funds in euro or European Government obligations or a combination thereof in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore
delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on
the Notes to the date of maturity or redemption, as the case may be, together with
irrevocable instructions from the Issuer directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be;
(2) the Issuer has paid all other sums payable under the Indenture by the Issuer; and
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(3) the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel
acceptable in form and substance to the Trustee stating that all conditions precedent under the
Indenture relating to the satisfaction and discharge of the Indenture have been complied with.
Amendments and Waivers
Subject to certain exceptions, the Indenture, the Notes, the Notes Guarantees, the Security Documents
(and any intercreditor agreement entered into in accordance with the terms of the Indenture), the Escrow
Agreement, the Intercompany Proceeds Note and the Acquisition On-Loan may be amended or supplemented
with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for,
Notes) and, subject to certain exceptions, any past default or compliance with any provisions may be waived with
the consent of the Holders of a majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).
However, without the consent of each Holder of an outstanding Note, no amendment may, among other things:
(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver;
(2) reduce the stated rate of or extend the stated time for payment of interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of any Note;
(4) reduce the premium payable upon the redemption or repurchase of any Note or change the time at
which any Note may be redeemed or repurchased as described above under “— Optional
Redemption”, “— Redemption for Changes in Withholding Taxes”, “— Change of Control”;
(5) modify or change in any material respect the obligation of the Issuer to make and consummate a
Change of Control Offer in respect of a Change of Control that has occurred or make and
consummate an Asset Disposition Offer with respect to any Asset Disposition that has been made;
(6) make any Notes payable in a currency other than that stated in the Notes;
(7) make any changes in the provisions of the Indenture entitling each Holder to receive payment of,
premium, if any, principal of or interest on such Holder’s Notes on or after the due dates therefor
or to impair the right of any Holder to institute suit for the enforcement of any payment on or with
respect to such Holder’s Notes;
(8) make any change in the amendment or waiver provisions of the Indenture which require each
Holder’s consent;
(9) make any change in the provisions of the Indenture described under “Withholding Taxes” that
adversely affects the rights of any Holder of such Notes in any material respect or amends the
terms of such Notes in a way that would result in a loss of an exemption from any of the Taxes
described thereunder or an exemption from any obligation to withhold or deduct Taxes so
described thereunder unless the Payor agrees to pay Additional Amounts, if any, in respect
thereof;
(10) make any change in the provisions of the Indenture or any Security Document (or intercreditor
agreement) affecting the ranking of the Notes or any Notes Guarantee in a manner adverse to the
Holders in any material respect;
(11) release the Liens on the Collateral except as permitted by the Indenture and the Security
Documents; or
(12) release any Guarantor from any of its obligations (or modify such obligations in any manner
adverse to the Holders in any material respect) under any Notes Guarantee or the Indenture, as
applicable, except in accordance with the terms of the Indenture.
Notwithstanding the foregoing, without the consent of any Holder, the Issuer, the Company, the
Subsidiary Guarantors and the Trustee or (in the case of the Security Documents) the Security Agent and/or the
Collateral Agent, together, may amend the Indenture, the Notes, the Notes Guarantees, the Security Documents
(and any intercreditor agreement entered into in accordance with the terms of the Indenture), the Escrow
Agreement, the Intercompany Proceeds Note and the Acquisition On-Loan to:
(1) cure any ambiguity, omission, defect or inconsistency;
(2) provide for the assumption by a successor corporation of the obligations of the Issuer, the
Company or any Subsidiary Guarantor under the Indenture, the Notes, the Security Documents,
any intercreditor agreement, the Escrow Agreement, the Intercompany Proceeds Note and the
Acquisition On-Loan or the Notes Guarantees (and other relevant agreements);
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(3) provide for uncertificated Notes in addition to or in place of certificated Notes;
(4) add Guarantees with respect to the Notes;
(5) secure or further secure the Notes or any Notes Guarantees;
(6) add to the covenants of the Issuer, the Company or any Guarantor for the benefit of the Holders or
surrender any right or power conferred upon the Issuer, the Company or any Subsidiary
Guarantor;
(7) make any change that does not adversely affect the rights of any Holder;
(8) provide for the issuance of Additional Notes in accordance with the limitations set forth in the
Indenture as of the Issue Date and to make such changes as may be required to the Security
Documents (and any intercreditor agreement) to accommodate and implement such issuance of
Additional Notes;
(9) conform the text of the Indenture, the Notes, the Notes Guarantees, the Security Documents (and
any intercreditor agreement), the Escrow Agreement, the Intercompany Proceeds Note or the
Acquisition On-Loan to any provision of this Description of the Notes section to the extent that
such provision in this “Description of the Notes” section was intended to be a verbatim or
substantially verbatim recitation of a provision of the Indenture, the Notes, the Notes Guarantees,
the Security Documents (and any intercreditor agreement), the Escrow Agreement, the
Intercompany Proceeds Note or the Acquisition On-Loan; or
(10) evidence and provide for the acceptance and appointment under the Indenture of a successor
Trustee pursuant to the requirement thereof.
The consent of the Holders is not necessary under the Indenture to approve the particular form of any
proposed amendment, supplement or waiver. It is sufficient if such consent approves the substance of the
proposed amendment, supplement or waiver. A consent to any amendment, supplement or waiver under the
Indenture by any Holder of Notes given in connection with a tender of such Holder’s Notes will not be rendered
invalid by such tender.
In determining whether the Holders of the requisite principal amount of Notes have given any request,
demand, authorization, consent, vote or waiver in connection with the Indenture and the Notes, Notes owned by
the Issuer or any Affiliate of the Issuer shall be disregarded and deemed not to be outstanding for these purposes,
except that in determining whether the Trustee shall be protected in relying upon such request, demand,
authorization, consent, vote or waiver, only Notes which the Trustee knows to be so owned shall be so
disregarded.
The Issuer will publish a notice of any material amendment, supplement or waiver in accordance with the
provisions of the Indenture described under “— Notices”, and for so long as the Notes are listed on the
Luxembourg Stock Exchange and traded on the Euro MTF Market and the rules of such exchange so require, the
Issuer will notify the Luxembourg Stock Exchange of any such amendment, supplement and waiver.
Governing Law
The Indenture, the Notes and the Notes Guarantees will be governed by, and construed in accordance
with, the laws of the State of New York. The Security Documents will be governed by the laws of various
relevant jurisdictions including New York, Poland, France and Austria.
Concerning the Trustee
The Bank of New York is to be appointed as Trustee under the Indenture. The Indenture provides that,
except during the continuance of an Event of Default, the Trustee will perform only such duties as are set forth
specifically in the Indenture. During the existence of an Event of Default, the Trustee will exercise such of the
rights and powers vested in it under the Indenture and use the same degree of care that a prudent Person would
use in conducting its own affairs.
The Indenture imposes certain limitations on the rights of the Trustee, should it become a creditor of the
Issuer, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; provided,
however, that if it acquires any conflicting interest it must either eliminate such conflict or resign.
The Indenture sets out the terms under which the Trustee may retire or be removed, and replaced. Any
removal or resignation of the Trustee shall not become effective until the acceptance of appointment by the
successor Trustee.
The Indenture provides for the indemnification of the Trustee in connection with its actions under the
Indenture.
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Form of Notes
The Notes will be represented initially by a global note in registered form (the “Global Note”). Unless
Definitive Notes (as defined below) are issued, the principal amount of the Global Note will at all times equal the
outstanding principal amount of the Notes represented thereby.
The Global Note will be deposited on the Issue Date with The Bank of New York, as common depositary
(the “Common Depositary”) for the Euroclear System (“Euroclear”) and for Clearstream. Interests in the Global
Note will be shown on, and transfers thereof will be effected only through, records maintained in book-entry
form by Euroclear and Clearstream. Such beneficial interests in the Notes are referred to as “Book-Entry
Interests.”
Holders of Book-Entry Interests will be entitled to receive Definitive Notes in registered form
(“Definitive Notes”) in exchange for their holdings of Book-Entry Interests only in the limited circumstances set
forth in “Book-Entry, Delivery and Form — Definitive Notes.” Title to the Definitive Notes will pass upon
registration of transfer in accordance with the provisions of the Indenture. In no event will Definitive Notes in
bearer form be issued.
Payments on the Notes

Principal of, premium, if any, Additional Amounts, if any, and interest on the Global Note will be
payable, and the Global Note may be exchanged or transferred, at the corporate trust office or agency of the
Trustee in London, England, except that, at the option of the Issuer, payment of interest may be made by check
mailed to the address of the Holders of the Notes as such address appears in the Note register. Payment of
principal of, premium, if any, Additional Amounts, if any, and interest on Notes in global form registered in the
name of or held by the Common Depositary or its nominee will be made in immediately available funds to the
Common Depositary or its nominee, as the case may be, as the registered holder of such Global Note. Upon the
issuance of Definitive Notes, and for so long as the Notes are listed on the Luxembourg Stock Exchange and
traded on the Euro MTF market and the rules of the Luxembourg Stock Exchange so require, Holders of the
Notes will be able to receive principal and interest on the Notes at the Luxembourg office of such paying agent,
subject to the right of the Issuer to mail payments in accordance with the terms of the Indenture. The Issuer will
pay interest on the Notes to Persons who are registered Holders at the close of business on the record date
immediately preceding the interest payment date for such interest. Such Holders must surrender the Notes to a
Paying Agent to collect principal payments.
Global Clearance and Settlement Under Book-Entry System

Initial settlement for the Notes will be made in euros.
Book-Entry Interests owned through Euroclear or Clearstream accounts will follow the settlement
procedures applicable to conventional eurobonds in registered form. Book-Entry Interests will be credited to the
securities custody accounts of Euroclear and Clearstream holders on the Business Day following the settlement
date against payment for value on the settlement date.
The Book-Entry Interests will trade through participants of Euroclear or Clearstream and will settle in
same day funds.
Since the purchase determined the place of delivery, it is important to establish at the time of trading of
any Book-Entry Interests where both the purchaser’s and seller’s accounts are located to ensure that settlement
can be made on the desired value date.
Concerning the Paying Agent and Registrar

The Trustee will initially act as Paying Agent and Registrar for the Notes. The Issuer may change the
Paying Agent or Registrar for the Notes without prior notice to the Holders of the Notes, and the Company or any
of its subsidiaries may act as Paying Agent or Registrar for the Notes; provided that, if Definitive Notes are
issued, and for so long as the Notes are listed on the Luxembourg Stock Exchange and traded on the Euro MTF
market and the rules of the Luxembourg Stock Exchange so require, the Issuer will appoint a Luxembourg
paying agent reasonably acceptable to the Trustee, as an additional paying agent for the Notes. In the event that a
Paying Agent is replaced, the Issuer will provide prior notice thereof in accordance with the procedures described
under “— Notices.”
As long as the Notes remain outstanding, the Issuer also agrees that it will ensure that it maintains a
paying agent for the Notes in a member state of the European Union that is not obliged to withhold or deduct tax
pursuant to the EU Savings Tax Directive or any law implementing or complying with, or introduced in order to
conform to the EU Savings Tax Directive.
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Transfer and Exchange
A Holder of Notes may transfer or exchange Notes in accordance with the Indenture which shall provide
that, upon the issuance of definitive Notes, and for so long as the Notes are listed on the Luxembourg Stock
Exchange and traded on the Euro MTF market and the rules of the Luxembourg Stock Exchange so require,
Holders of Notes will be able to transfer Definitive Notes in Luxembourg at an office of such transfer agent. The
Registrar and the Trustee for the Notes may require a Holder of a Note, among other things, to furnish
appropriate endorsements and transfer documents, and the Issuer may require such holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuer is not required to transfer or exchange any Note
selected for redemption. Also, the Issuer is not required to transfer or exchange any Note for a period of 15 days
before a selection of Notes to be redeemed. The registered Holder of a Note will be treated as the owner of it for
all purposes. No service charge will be made for any registration of transfer or exchange of Notes, but the Issuer
may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable
in connection therewith.
The Notes in global form may be transferred only to a successor of the Common Depositary.
In case of a partial transfer of a Definitive Note, a Holder will receive new Notes through the transfer
agent.
Book-Entry Interests will be subject to certain restrictions on transfer and certification requirements as
described under “Notice to Investors.”
All transfers of Book-Entry Interests between participants in Euroclear or participants in Clearstream will
be effected by Euroclear or Clearstream pursuant to customary procedures and subject to the applicable rules and
procedures established by Euroclear or Clearstream and their respective participants. See “Book-Entry, Delivery
and Form.”
Notes issued as Definitive Notes in registered form may be transferred, in whole or in part, in
denominations of €50,000 in principal amount or integral multiples of €1,000 in excess thereof to persons who
take delivery thereof in the form of definitive Notes in registered form. In connection with any such transfer, the
Indenture will require the transferor to, among other things, furnish appropriate endorsements and transfer
documents, furnish information regarding the Euroclear or Clearstream account of the transferee, furnish certain
certificates and pay any taxes, duties and governmental charges in connection with such transfer.
Notwithstanding the foregoing, the Issuer is not required to register the transfer of any Definitive Note in
registered form:
(1) for a period of 15 calendar days prior to any date fixed for the redemption of the Notes;
(2) for a period of 15 calendar days immediately prior to the date fixed for selection of Notes to be
redeemed in part;
(3) for a payment period of 15 calendar days prior to the record date with respect to any interest
payment date; or
(4) that the registered holder of Notes has tendered (and not withdrawn) for repurchase in connection
with a Change of Control Offer or an Asset Disposition Offer.
Currency Indemnity and Calculation of Euro-denominated Restrictions

The euro is the sole currency of account and payment for all sums payable by the Issuer and the
Guarantors under or in connection with the Notes, the Notes Guarantees and the Indenture, including damages.
Any amount received or recovered in a currency other than euro, whether as a result of, or the enforcement of, a
judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer or a Guarantor or
otherwise, by any Holder or by the Trustee in respect of any sum expressed to be due to it from the Issuer or a
Guarantor will only constitute a discharge of the Issuer or such Guarantor to the extent of the euro amount which
the recipient is able to purchase with the amount so received or recovered in that other currency on the date of
that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it
is practicable to do so).
If that euro amount is less than the euro amount expressed to be due to the recipient under any Note or the
Trustee, the Issuer and each Guarantor will indemnify them against any loss sustained by such recipient as a
result. In any event, the Issuer and each Guarantor will indemnify the recipient against the cost of making any
such purchase. For the purposes of this currency indemnity provision, it will be sufficient for the Holder or the
Trustee to certify in a satisfactory manner (indicating the sources of information used) that it would have suffered
a loss had an actual purchase of euro been made with the amount so received in that other currency on the date of
receipt or recovery (or, if a purchase of euro on such date had not been practicable, on the first date on which it
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would have been practicable, it being required that the need for a change of date be certified in the manner
mentioned above). These indemnities constitute a separate and independent obligation from the Issuer’s and each
Guarantor’s other obligations, will give rise to a separate and independent cause of action, will apply irrespective
of any indulgence granted by any Holder or the Trustee and will continue in full force and effect despite any
other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note, any
Notes Guarantee or to the Trustee.
Except as otherwise specifically set out herein, for purposes of determining compliance with any euro-
denominated restriction herein, the euro-equivalent amount for purposes hereof that is denominated in a non-euro
currency shall be calculated based on the relevant currency exchange rate in effect on the date such non-euro
amount is incurred or made, as the case may be.
No Personal Liability of Members of the Supervisory Board or Analogous Board or Body, Officers,
Employees and Shareholders
No director or member of the supervisory board or analogous board or body, and no officer, employee,
incorporator or shareholder of the Issuer, the Company or any Subsidiary Guarantor shall have any liability for
any obligations of the Issuer, the Company or the Subsidiary Guarantors under the Notes, the Notes Guarantees,
the Indenture or the Security Documents or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive
liabilities under the U.S. federal securities laws or French Law, and it is the view of the U.S. Securities and
Exchange Commission that such a waiver is against public policy.
Consent to Jurisdiction and Service

In relation to any legal action or proceedings arising out of or in connection with the Indenture and the
Notes, the Issuer, the Company and each Subsidiary Guarantor will in the Indenture irrevocably submit to the
jurisdiction of the federal and state courts in the Borough of Manhattan in the City of New York, County and
State of New York, United States of America.
Enforceability of Judgments
Because the assets of the Issuer and the Guarantors are primarily outside the United States, any judgment
obtained in the United States against the Issuer or any Guarantor, including judgments with respect to the
payment of principal, interest, Additional Amounts or premium and any redemption price and any purchase price
with respect to the Notes or the Notes Guarantees, may not be collectable within the United States.
Notices
Notices regarding the Notes will be sent to a leading newspaper having general circulation in London
(which is expected to be The Financial Times), through the newswire service of Bloomberg (or if Bloomberg
does not then operate, any similar agency) and, for as long as the Notes are listed on the Luxembourg Stock
Exchange and traded on the Euro MTF Market, by publication in a daily newspaper published in Luxembourg
(which is expected to be the d’Wort) or by publication on the website of the Luxembourg Stock Exchange
(www.bourse.lu). Additionally, in the event the Notes are in the form of Definitive Notes, notices will be sent, by
first-class mail, with a copy to the Trustee, to each Holder at such Holder’s address as it appears on the
registration books of the registrar. If and so long as such Notes are listed on the Luxembourg Stock Exchange
and traded on the Euro MTF Market or on any other securities exchange, notices will also be given in accordance
with any applicable requirements of such securities exchange. If and so long as any Notes are represented by one
or more Global Notes, notices will be delivered to such clearing agency for communication to the owners of such
Book-Entry Interests. Notices given by publication will be deemed given on the first date on which publication is
made and notices given by first-class mail, postage prepaid, will be deemed given five calendar days after
mailing.
Prescription
Claims against the Issuer for payment of principal, interest and additional amounts, if any, on the Notes
will become void unless presentment is made (where so required herein) within, in the case of principal and
additional amounts, if any, a period of ten years or, in the case of interest, a period of five years, in each case
from the applicable original payment date therefor.
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Certain Definitions
“Acquired Indebtedness” means Indebtedness:
(1) of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary;
(2) assumed in connection with the acquisition of assets from a Person; or
(3) of a Person at the time such Person merges with or into or consolidates with the Company or any
Restricted Subsidiary,
which, in the case of clause (2) and (3) above, is not Incurred by such Person in connection with or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such
acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the
preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of
the preceding sentence, on the date of consummation of such acquisition of assets and, with respect to clause
(3) of the preceding sentence, on the date of the relevant merger or consolidation.
“Acquisition Closing Date” means the date upon which the Austrian Acquisition is consummated.
“Acquisition Costs” means all reasonable costs, fees and expenses (and taxes thereon) and all capital,
stamp, documentary, registration or other taxes incurred by or on behalf of the Company or its subsidiaries in
connection with the Austrian Acquisition.
“Acquisition Agreement” means the share purchase agreement entered into on December 20, 2006 among
the Company, Donauländische Baugesellschaft m.b.H. and voestalpine Stahl GmbH, as amended from time to
time.
“Additional Intercompany Proceeds Note” means any note representing the on-lending of, or a loan of,
the gross proceeds of any Additional Notes (or debt securities of the Issuer substantially identical to the Notes
and the Notes Guarantees (other than with respect to interest, maturity and redemption provisions)).
“Additional Notes Guarantees” means Guarantees by the Guarantors of Additional Notes that are
permitted to be Incurred under the Indenture.
“Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under common control with, such specified
Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the foregoing.
“Applicable Premium” means, with respect to any Note on any redemption date, the greater of (a) one
percent of the principal amount of the Note and (b) the excess of (x) the present value at such redemption date of
the redemption price of such Note at February 1, 2011, plus all required interest payments that would otherwise
be due to be paid on such Note during the period between the redemption date and February 1, 2011 excluding
accrued but unpaid interest, computed using a discount rate equal to the Bund Rate at such redemption date plus
50 basis points, over (y) the principal amount of such Note.
“Asset Acquisition” means:
(1) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person
pursuant to which such Person shall become a Restricted Subsidiary of the Company or any
Restricted Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company; or
(2) the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any
Person (other than a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprises any division or line of business of such Person or any
other properties or assets of such Person other than in the ordinary course of business.
“Asset Disposition” means any direct or indirect sale, issuance, conveyance, transfer, lease (other than
operating leases entered into in the ordinary course of business), assignment or other transfer for value, or series
of related sales, issuances, conveyances, transfers, leases, assignments or any other transfers, by the Company or
any of its Restricted Subsidiaries, including any Sale and Leaseback Transaction and any disposition by means of
a merger, consolidation or similar transaction (each referred to for purposes of this definition as a “disposition”)
of:
(1) any Capital Shares of any Restricted Subsidiary of the Company (other than directors’ qualifying
shares or shares required by law to be held by a Person other than the Company or a Restricted
Subsidiary); or
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(2) any other property or assets of the Company or any Restricted Subsidiary of the Company other
than in the ordinary course of business.
Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:
(1) a disposition between or among the Company and its Restricted Subsidiaries;
(2) the disposition of cash or Cash Equivalents;
(3) a disposition of inventory;
(4) a disposition of obsolete or worn out equipment or equipment that is no longer useful in the
conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of by
the Company and its Restricted Subsidiaries in the ordinary course of business;
(5) transactions by the Company and its Restricted Subsidiaries permitted under “— Certain
Covenants — Merger and Consolidation” or a transaction that constitutes a Change of Control;
(6) an issuance of Capital Shares by a Restricted Subsidiary of the Company to the Company or to a
Restricted Subsidiary of the Company;
(7) any Restricted Payment (or Asset Disposition that would constitute a Restricted Payment but for
exclusions from the definition thereof) that is permitted to be made, and is made, under the
covenant described above under “— Certain Covenants — Limitation on Restricted Payments” or
that constitutes a Permitted Investment;
(8) dispositions by the Company and its Restricted Subsidiaries of assets in a single transaction or
series of related transactions with an aggregate Fair Market Value of less than €2.0 million;
(9) dispositions constituting an Incurrence of a Permitted Lien (but not the sale or other disposition of
the property subject to such Lien);
(10) dispositions by the Company and its Restricted Subsidiaries of receivables in connection with the
compromise, settlement or collection thereof or in bankruptcy or similar proceedings and
exclusive of factoring or similar arrangements;
(11) the licensing or sublicensing of intellectual property or other intangibles and licenses, leases or
subleases of other property;
(12) foreclosure, condemnation or similar action with respect to any property or other assets;
(13) a disposition pursuant to the terms of a binding agreement in effect on the Issue Date (or in effect
at the time a Person becomes a Restricted Subsidiary, provided that such agreement was not
entered into in contemplation of such Person becoming a Restricted Subsidiary);
(14) a disposition of shares of Centrostal pursuant to a public offering, to the extent that the Company’s
direct or indirect ownership interest in Centrostal after such sale is greater than 50% of the
outstanding capital shares; and
(15) sales of accounts receivable and related assets that constitute Permitted Factoring.
“Attributable Indebtedness” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the remaining term
of the lease included in the sale and leaseback transaction including any period for which the lease has been
extended or may, at the option of the lessor, be extended. The present value shall be calculated using a discount
rate equal to the rate of interest implicit in the transaction, determined in accordance with IFRS.
“Austrian Acquisition” means the purchase by the Company of 74.9% of the Capital Shares of the Target
pursuant to the terms of the Acquisition Agreement.
“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred
Shares, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled
redemption or similar payment with respect to such Preferred Shares multiplied by the amount of such payment
by (2) the sum of all such payments.
“Board Resolution” means, with respect to any Person, a resolution certified by the company secretary or
an assistant company secretary of such Person to have been duly adopted by the Supervisory Board or the
Management Board, as applicable, or an analogous body of such Person and to be in full force and effect on the
date of such certification.
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“Bund Rate” means the yield to maturity at the time of computation of direct obligations of the Federal
Republic of Germany (Bunds or Bundesanleihen) with a constant maturity (as officially compiled and published
in the most recent financial statistics that have become publicly available at least two Business Days (but not
more than five Business Days) prior to the redemption date (or, if such financial statistics are not so published or
available, any publicly available source of similar market data selected by the Issuer in good faith)) most nearly
equal to the period from the redemption date to February 1, 2011; provided, however, that if the period from the
redemption date to February 1, 2011 is not equal to the constant maturity of a direct obligation of the Federal
Republic of Germany for which a weekly average yield is given, the Bund Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of direct obligations
of the Federal Republic of Germany for which such yields are given, except that if the period from such
redemption date to February 1, 2011 is less than one year, the weekly average yield on actually traded direct
obligations of the Federal Republic of Germany adjusted to a constant maturity of one year shall be used.
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in
New York, London, Warsaw, Paris or Luxembourg are authorized or required by law to close or a day on which
the corporate trust office of the Trustee is closed for business.
“Capital Shares” of any Person means any and all shares, stock, interests, rights to purchase, warrants,
options, participation or other equivalents of or interests in (however designated) equity of such Person,
including any Preferred Shares, but excluding any debt securities convertible into such equity.
“Capitalized Lease Obligation” means, with respect to any Person, the obligations of such Person under a
lease that are required to be classified and accounted for as capital lease obligations under IFRS and, for purposes
of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations
at such date, determined in accordance with IFRS.
“Cash Equivalents” means:
(1) debt securities denominated in euro, pounds sterling or U.S. dollars, as applicable, to be issued or
directly and fully guaranteed or insured by the government of a Participating Member State as of
the Issue Date, the U.K. or the U.S., as applicable, where the debt securities have not more than 24
months to final maturity from the date of acquisition and are not convertible into any other form
of security;
(2) debt securities denominated in euro, pounds sterling or U.S. dollars which have not more than
twelve months to final maturity from the date of acquisition, are not convertible into any other
form of security, are rated at least P-1 by Moody’s or A-1 by Standard & Poor’s (or if such ratings
categories are changed, substantially equivalent categories) and are not issued or guaranteed by
the Company or any of its Subsidiaries;
(3) commercial paper denominated in euro, pounds sterling or U.S. dollars maturing no more than one
year from the date of creation thereof and, at the time of acquisition, having a rating of P-1 from
Moody’s and A-1 from Standard & Poor’s (or if such ratings categories are changed, substantially
equivalent categories);
(4) any cash deposit or certificates of deposit denominated in euro, pounds sterling or U.S. dollars
having (with respect to certificates of deposit) not more than twelve months to maturity issued by
or held with a bank or financial institution incorporated or having a branch in a Participating
Member State (on the Issue Date) in the United Kingdom or the United States, provided that the
bank is rated at least P-1 by Moody’s or A-1 by Standard & Poor’s;
(5) repurchase obligations with a term of not more than seven days for underlying securities of the
types described in clause (1) above entered into with any bank or financial institution meeting the
qualifications specified in clause (4) above; and
(6) investments in money market funds which invest substantially all their assets in securities of the
types described in clauses (1) through (5) above.
“Change of Control” means the occurrence of one or more of the following events:
(1) prior to the consummation of a Public Equity Offering, Permitted Holders cease to beneficially
own (as defined in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly more than
50.1% of the total voting power of the Voting Shares of the Company (or its successor by merger,
consolidation or purchase of all or substantially all of its assets);
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(2) following the consummation of a Public Equity Offering, (a) any “person” or “group” of related
persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one
or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that such person or group shall be deemed to have
“beneficial ownership” of all shares that any such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35.0% of the total voting power of the Voting Shares of the Company (or
its successor by merger, consolidation or purchase of all or substantially all of its assets), and
(b) the Permitted Holders “beneficially own” (as defined in Rules 13d-3 and 13d-5 of the
Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Shares of the Company (or its successor by merger, consolidation or purchase of all
or substantially all of its assets);
(3) during any period of two consecutive years, individuals who at the beginning of such period
constituted the Supervisory Board of the Company (together with any new members of such
Supervisory Board whose election to such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the members of the
Supervisory Board then still in office who were either directors at the beginning of such period of
whose election or nomination for election was previously so approved), cease for any reason to
constitute a majority of such members of such board then in office;
(4) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of the property
or assets of the Company and its Restricted Subsidiaries taken as a whole to any “person” or
“group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) other than to one or more Permitted Holders; or
(5) the adoption by the shareholders of the Company of a plan or proposal for the liquidation or
dissolution of the Company.
“Centrostal” mean Centrostal S.A., and any successor in interest thereto.
“Collateral Agent” means The Bank of New York, as collateral agent acting on behalf of the Holders of
Notes under the Security Documents.
“Commission” means the U.S. Securities and Exchange Commission.
“Commodity Hedging Agreements” means in respect of a Person any commodity purchase contract,
commodity futures or forward contract, commodities option contract or other similar contract (including
commodities derivative agreements or arrangements), to which such Person is a party or a beneficiary.
“Consolidated EBITDA” for any period means, without duplication, the Consolidated Net Income for
such period, (x) plus the following to the extent deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization expense or impairment charges recorded in accordance with IFRS; and
(5) other non-cash charges reducing Consolidated Net Income (excluding any such non-cash charge
to the extent it represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period not included in the
calculation),
(y) less any non-cash items increasing Consolidated Net Income for such period.
Notwithstanding the preceding sentence, clauses (2) through (5) relating to amounts of a Restricted
Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated EBITDA of such
Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary
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was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth
in clauses (2) through (5) are in excess of those necessary to offset a net loss of such Restricted Subsidiary or if
such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a
corresponding amount would be permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable
to that Restricted Subsidiary or its shareholders.
“Consolidated Fixed Charge Coverage Ratio” means, with respect to any Person, the ratio of
Consolidated EBITDA of such Person during the period of the four full fiscal quarters (the “Four Quarter
Period”) ending prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio for which financial statements are available (the “Transaction Date”) to Consolidated
Fixed Charges of such Person for the Four Quarter Period. In addition to and without limitation of the foregoing,
for purposes of this definition, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall be calculated
after giving effect on a pro forma basis for the period of such calculation to:
(1) the Incurrence or repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such
calculation and any Incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the Incurrence or repayment of Indebtedness in the ordinary course
of business for working capital purposes pursuant to working capital facilities, occurring during
the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and
(2) any asset sales or other dispositions or Asset Acquisitions (including, with out limitation, any
Asset Acquisition giving rise to the need to make such calculation) as a result of such Person or
one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) Incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA attributable to the assets which are the
subject of the Asset Acquisition or asset sale or other disposition during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such asset sale or other disposition or
Asset Acquisition (including the Incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its
Restricted Subsidiaries directly or indirectly Guarantees Indebtedness of a third Person, the
preceding sentence shall give effect to the Incurrence of such Guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly Incurred or otherwise assumed
such Guaranteed Indebtedness.
Furthermore, in calculating “Consolidated Fixed Charges” for purposes of determining the denominator
(but not the numerator) of this “Consolidated Fixed Charge Coverage Ratio:”
(1) interest on outstanding Indebtedness determined on a fluctuating or floating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating or floating
basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations,
shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
For the purposes of this definition, whenever pro forma effect is to be given to any Asset Acquisition, the
amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in good faith
by a responsible financial or accounting officer of the Company. In addition, any such pro forma calculation may
include adjustments to reflect operating expense reductions from any acquisition or merger, which are considered
in the good faith judgment of the Company as probable to be realized, as set out in an officers certificate.
If any Indebtedness is Incurred pursuant to a revolving credit facility, the amount outstanding on the date
of such calculations will be computed based on (i) the average daily balance of such Indebtedness during such
Four Quarter Period or (ii) if such facility was created after the end of such Four Quarter Period, the average
daily balance of such Indebtedness during the period from the date of creation of such facility to the date of
calculation.
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“Consolidated Fixed Charges” means, with respect to any Person for any period, the sum, without
duplication, of:
(1) Consolidated Interest Expense; plus
(2) the product of:
(a) the amount of all dividend payments on any series of Preferred Shares of such Person and,
to the extent permitted under the Indenture, its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Shares and other than dividends paid by a Restricted
Subsidiary of such Person to such Person or to a Restricted Subsidiary of such Person)
paid, accrued or scheduled to be paid or accrued during such period; and
(b) a fraction, the numerator of which is one and the denominator of which is one minus the
then current effective consolidated income tax rate of such Person, expressed as a decimal
(as estimated in good faith by the principal financial officer of the Company).
“Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such
Person or other payments required to be made by such Person by any governmental authority which taxes or
other payments are calculated by reference to the income or profits of such Person or such Person and the
Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net
Income for such period), regardless of whether such taxes or payments are required to be remitted to any
governmental authority.
“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and the
Restricted Subsidiaries on a consolidated basis, whether paid or accrued, plus, to the extent not included in such
interest expense:
(1) interest expense attributable to Capitalized Lease Obligations and the interest portion of rent
expense associated with Attributable Indebtedness in respect of the relevant lease giving rise
thereto, determined as if such lease were a capitalized lease in accordance with IFRS and the
interest component of any deferred payment obligations;
(2) amortization of debt discount and debt issuance cost;
(3) non-cash interest expense;
(4) commissions, discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing;
(5) interest actually paid by the Company or any such Restricted Subsidiary under any Guarantee of
Indebtedness or other obligation of any other Person;
(6) net costs associated with Hedging Obligations (including amortization of fees);
(7) the consolidated interest expense of the Company and the Restricted Subsidiaries that was
capitalized during such period;
(8) all dividends paid or payable, in cash, Cash Equivalents or Indebtedness or accrued during such
period on any series of Disqualified Shares of the Company or on Preferred Shares of the
Restricted Subsidiaries payable to a party other than the Company or a Wholly Owned Subsidiary;
(9) the cash contributions to any employee share ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest or fees to any other Person in
connection with Indebtedness Incurred by such plan or trust;
(10) any fees or charges attributable to Permitted Factoring; and
(11) interest Incurred in connection with Investments in discontinued operations.
“Consolidated Net Income” means, for any period, the net income (loss) of the Company and the
Restricted Subsidiaries on a consolidated basis determined in accordance with IFRS; provided, however, that
there will not be included in such Consolidated Net Income:
(1) any net income (loss) of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that:
(a) subject to the limitations contained in clauses (4), (5) and (6) below, the Company’s equity
in the net income of any such Person for such period will be included in such Consolidated
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Net Income up to the aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary (or, in respect of any other
distribution, to the extent actually converted into cash) as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (2) below); and
(b) the Company’s equity in a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period will be included in determining such Consolidated Net Income
to the extent such loss has been funded with cash from the Company or a Restricted
Subsidiary;
(2) any net income (loss) of any Person acquired by the Company or a Subsidiary of the Company in
a pooling of interests transaction for any period prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Subsidiary is subject to restrictions (other
than Permitted Restrictions), directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:
(a) subject to the limitations contained in clauses (4) and (5) below, the Company’s equity in
the net income of any such Restricted Subsidiary for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash that is actually distributed or
could have been distributed (without double counting) by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a dividend (subject,
in the case of a dividend to another Restricted Subsidiary, to the limitation contained in
this clause); and
(b) the Company’s equity in a net loss of any such Restricted Subsidiary for such period will
be included in determining such Consolidated Net Income;
(4) any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of
the Company or its consolidated Restricted Subsidiaries (including pursuant to any Sale and
Leaseback Transaction) which is not sold or otherwise disposed of in the ordinary course of
business and treated as such under IFRS and any gain (loss) realized upon the sale or other
disposition of any Capital Shares of any Person;
(5) any extraordinary gain or loss; and
(6) the cumulative effect of a change in accounting principles.
“Credit Facilities” means one or more debt facilities (including, without limitation, debt facilities made
available under, or in accordance with, the Revolving Credit Facilities Agreements) or commercial paper
facilities, agreements, credit facility documentation, indentures or trust deeds, note purchase agreements or
arrangements with banks, insurance companies or other institutional lenders or investors providing for revolving
credit loans, term loans, receivables financing (including through the sale or factoring of receivables to such
lenders or to special purpose entities formed to borrow from or issue securities to such lenders against such
receivables), letters of credit or other forms of guarantees and assurances, bonds, notes, debentures or other
indebtedness, including overdrafts, in each case, as amended, restated, modified, supplemented, renewed,
refunded, replaced (whether upon or after termination or otherwise), refinanced, increased or extended in whole
or in part from time to time, and whether or not with the original arranging agent, administrative agent and
lenders or another arranging or administrative agent or agents or other banks or other institutional lenders or
investors and whether provided under the original Revolving Credit Facilities or one or more other credit
agreements or financing agreements (without limitation as to amount outstanding or committed, or the maturity,
terms, conditions, covenants, or other provisions thereof or parties thereto) and in each case including all
agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing
(including any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement,
patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees,
pledges, agreements, security agreements and collateral documents).
“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement intended to protect the Company or any Subsidiary of the
Company against fluctuations in currency values.
“Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving
of notice or both would be, an Event of Default.
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“Disqualified Capital Shares” means, with respect to any Person, any Capital Shares which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the
holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable (other than redeemable only for Capital Shares of such
Person which is not itself Disqualified Capital Shares) pursuant to a sinking fund obligation or
otherwise;
(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Capital
Shares; or
(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or
otherwise, in whole or in part,
in each case on or prior to the 91st day after the Stated Maturity of the Notes; provided, however, that any Capital
Shares that would not constitute Disqualified Capital Shares but for provisions thereof giving holders thereof the
right to require such Person to purchase or redeem such Capital Shares upon the occurrence of an “asset sale” or
a “change of control” occurring prior to the 91st day after the Stated Maturity of the Notes shall not constitute
Disqualified Capital Shares if:
(x) the “asset sale” or “change of control” provisions applicable to such Capital Shares are not more
favorable to the holders of such Capital Shares in any material respect than the terms applicable to
the Notes; and
(y) any such requirement only becomes operative after compliance with such comparable provisions
applicable to the Notes, including the purchase of any Note tendered pursuant thereto.
The amount of any Disqualified Capital Shares that does not have a fixed redemption, repayment or
repurchase price will be calculated in accordance with the terms of such Disqualified Capital Shares as if the
Disqualified Capital Shares were redeemed, repaid or repurchased on the relevant date on which the amount of
such Disqualified Capital is to be determined pursuant to the Indenture; provided, however, that if such
Disqualified Capital Shares could not be required to be redeemed, repaid or repurchased at the time of such
determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Capital
Shares as reflected in the most recent financial statements of such Person.
“European Government Obligations” means any security that is (1) a direct obligation of Ireland,
Belgium, the Netherlands, France, Germany or any other country that is a member of the European Monetary
Union on the Issue Date, for the payment of which the fall faith and credit of such country is pledged or (2) an
obligation of a person controlled or supervised by and acting as an agent or instrumentality of any such country
the payment of which is unconditionally guaranteed as a full faith and credit obligation by such country, which,
in each case under the preceding clause (1) or (2), is not callable or redeemable at the option of the issuer thereof.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute or
statutes thereto.
“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in
an arm’s-length, free, market transaction, for cash, between a willing seller and a willing and able buyer, neither
of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be
determined by the Supervisory Board of the Company acting reasonably and in good faith and shall be evidenced
by a Board Resolution of the Supervisory Board of the Company; provided that such determination shall be
based on an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international
standing if such Fair Market Value is estimated in good faith by the Supervisory Board of the Company to
exceed €20 million.
“Finance Subsidiary” means a Wholly Owned Restricted Subsidiary of the Company (other than the
Issuer) established principally for the purpose of, and engaged principally in the business of issuing debt
securities or incurring other Indebtedness that is guaranteed by the Company and loaning the proceeds thereof to
the Company or another Restricted Subsidiary of the Company and other related and ancillary activities.
“Group” means the Company and its Subsidiaries, including the Issuer.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise,
of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness
of such other Person (whether arising by virtue of partnership arrangements, or by agreement to
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keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the
ordinary course of business or undertaking, in connection with Permitted Factoring arrangements. The term
“Guarantee” used as a verb has a corresponding meaning.
“Guarantor Senior Indebtedness” means, with respect to a Guarantor, Senior Indebtedness of such
Guarantor.
“Guarantor Subordinated Indebtedness” means, with respect to a Guarantor, any Indebtedness of such
Guarantor (whether outstanding on the Issue Date or thereafter Incurred) which is expressly subordinate in right
of payment to the obligations of such Guarantor under its Guarantee of the Notes pursuant to a written
agreement.
“Guarantors” means the Company and the Subsidiary Guarantors.
“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate
Agreement, Currency Agreement or Commodity Hedging Agreement.
“Holder” or “Noteholder” means the registered holder of any Note.
“IFRS” means the International Financial Reporting Standards as adopted by the European Union,
consistently applied, in effect as of the Issue Date.
“Incur” means to issue, create, assume, enter into any guarantee of, incur or otherwise become liable for,
directly or indirectly, and the terms “Incurred” and “Incurrence” shall have correlative meanings.
“Indebtedness” means, with respect to any Person on any date of determination (without duplication):
(1) the principal of indebtedness of such Person for borrowed money, excluding any trade payables
and other accrued current liabilities arising in the ordinary course of business;
(2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(3) the principal component of all obligations of such Person in respect of letters of credit,
performance and surety bonds, bankers’ acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent such reimbursement
obligation relates to a trade payable and such payable and such obligation is satisfied within 30
days of Incurrence);
(4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase
price of property, all conditional sales obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business that are not overdue by 120 days or more or are being contested in
good faith by appropriate proceedings promptly instituted and diligently conducted);
(5) Capitalized Lease Obligations and all Attributable Indebtedness of such Person;
(6) the principal component or liquidation preference of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Capital Shares or, with respect
to any Subsidiary, any Preferred Shares;
(7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person; provided, however,
that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset
at such date of determination and (b) the amount of such Indebtedness of such other Persons;
(8) the principal component of Indebtedness of other Persons to the extent Guaranteed by such
Person; and
(9) to the extent not otherwise included in this definition, net obligations of such Person under
Currency Agreements, Interest Rate Agreements or Commodity Hedging Agreement (the amount
of any such obligations to be equal at any time to the termination value of such agreement or
arrangement giving rise to such obligation that would be payable by such Person at such time).
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The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date. The amount of Indebtedness issued or
sold at a discount of any Person at any date will be the accreted value at such date. For the avoidance of doubt,
obligations arising in respect of operating leases (determined in accordance with IFRS) are not Indebtedness.
“Intercompany Proceeds Note” means, collectively, (a) the notes representing the on-loan of a specified
portion of the gross proceeds of the Notes and (b) any Additional Intercompany Proceeds Note from the Issuer to
the Company or any Restricted Subsidiary of the gross proceeds from the issuance of Additional Notes (or debt
securities of the Issuer substantially identical to the Notes and the Notes Guarantees (other than with respect to
interest, maturity and redemption provisions)) permitted by the Indenture and, in each case, any related
agreement and all notes directly or indirectly replacing or refinancing such notes or any portion thereof.
“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or
arrangement as to which such Person is party or a beneficiary.
“Investment” means, with respect to any Person, all investments by such Person in other Persons
(including Affiliates) in the form of any direct or indirect loan or other extension of credit (including, without
limitation, a guarantee or similar arrangement), advances or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the account or use of others), or any
purchase or acquisition by such Person of any Capital Shares, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by, any other Person and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with IFRS. “Investment” shall exclude extensions of trade
credit by the Company and its Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case may be. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Capital Shares of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary, the Company shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the Fair Market Value of the Capital Shares of such Restricted Subsidiary not
sold or disposed of. The acquisition by the Company or any Restricted Subsidiary of a Person that holds an
Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be
its Fair Market Value at the time the Investment is made and without giving effect to subsequent changes in
value.
“Issue Date” means the date of original issuance of the Notes.
“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any
agreement to grant any security interest).
“Management Board” means the management board of the Issuer or Company, as applicable, an
analogous board or body, or any committee thereof duly authorized to act on behalf of such board.
“Moody’s” means Moody’s Investors Service, Inc. or any of its successors or assigns that is a Nationally
Recognized Statistical Rating Organization.
“Nationally Recognized Statistical Rating Organization” means a nationally recognized statistical rating
organization within the meaning of Rule 436 under the Securities Act.
“Net Available Cash” from an Asset Disposition means cash payments received (including any cash
payments received by way of deferred payment of principal pursuant to a note or installment receivable or
otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in the form of assumption by the acquiring
person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset
Disposition or received in any other non-cash form) therefrom, in each case net of:
(1) all legal, accounting and investment banking fees and expenses, title and recording tax expenses,
commissions and other fees and expenses Incurred, and all federal, state, provincial, foreign and
local taxes required to be paid or accrued as a liability under IFRS (after taking into account any
available tax credits or deductions and any tax sharing agreements), as a consequence of such
Asset Disposition;
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(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with
IFRS, against any liabilities associated with the assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset Disposition.
“Net Cash Proceeds” with respect to any issuance or sale of Capital Shares, means the cash proceeds of
such issuance or sale net of legal fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection
with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into
account any available tax credit or deductions and any tax sharing arrangements).
“Notes Guarantee” means a Guarantee by the Company or a Subsidiary Guarantor of the Issuer’s
obligations with respect to the Notes and under the Indenture.
“Officer” means, with respect to any Person, the Chairman, the Chief Executive Officer, any managing
director or advisory board member, any director or the Secretary, or if there are no officers, the reasonable
equivalents, of that Person.
“Officers’ Certificate” means a certificate signed by two Officers.
“Opinion of Counsel” means a written opinion, in form and substance reasonably satisfactory to the
Trustee, from legal counsel who is reasonably acceptable to the Trustee and may be employees of the Company
or any Subsidiary thereof.
“Parent Company” means any Person (other than a natural person) of which the Company is or becomes
a direct or indirect Subsidiary after the Issue Date.
“Pari Passu Indebtedness” means any Indebtedness of the Issuer, the Company or any Subsidiary
Guarantor that ranks pari passu in right of payment with the Notes or the Notes Guarantee of such Guarantor, as
applicable.
“Participating Member State” means each state so described in any European Monetary Union
legislation.
“Paying Agent” means any Person authorized by the Issuer to pay the principal of (and premium and
Additional Amounts, if any), or interest on any Notes on behalf of the Issuer.
“Permitted Business” means (1) any business in which the Company and its Restricted Subsidiaries are
engaged in on the Issue Date, any business in which the Target Group is engaged on the Acquisition Closing
Date or any business activity that is a reasonable extension, development or expansion thereof or ancillary or
complementary to any such business or (2) any business which is not otherwise material to the Company and its
Restricted Subsidiaries, taken as a whole; provided, any Investment by the Company or any Restricted Subsidiary
subject to this clause (2) shall be made under, and in compliance with, clause (19) of the definition of Permitted
Investments.
“Permitted Collateral Liens” means:
(1) Liens securing the Notes (other than Additional Notes) and the Note Guarantees thereof (and any
Hedging Obligations with respect thereto);
(2) Liens securing Indebtedness incurred in compliance with the first paragraph of the “— Limitation
on Indebtedness” covenant (a) on any Collateral securing any Additional Notes and Notes
Guarantees thereof or debt securities of the Issuer substantially identical (other than with respect
to interest, maturity and redemption provisions) to the Notes and the Notes Guarantees or (b) on
any Share Pledge securing any Credit Facilities or debt securities of any Guarantor or Finance
Subsidiary (and any guarantee thereof) to the extent the terms, conditions and covenants of any
such Credit Facility or debt securities (other than with respect to interest, maturity and redemption
provisions) are substantially similar to the terms, conditions and covenants governing the Notes
and the Notes Guarantees; provided, in each case that such Lien either ranks either equally or
junior to all other Liens on such Collateral securing Indebtedness of the Issuer ranking equally to
the Notes (or any Guarantee thereof) and any Hedging Obligations with respect to such
Indebtedness; and
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(3) statutory Liens arising by operation of law.
“Permitted Factoring” means the factoring of accounts receivable by the Company on a non-recourse
basis and otherwise on terms not materially less favorable, taken as a whole, to the Holders as those in effect on
the Issue Date under working capital facilities or available to the Company or a Restricted Subsidiary (other than
the Issuer or a Finance Subsidiary) in the ordinary course of business.
“Permitted Holder” means (i) Przemyslaw Sztuczkowski (ii) any spouse or immediate family member of
Przemyslaw Sztuczkowski, (iii) any direct descendant of any Person described in clauses (i) of (ii), (iv) any trust
created for the benefit of Przemyslaw Sztuczkowski or any Person described in the preceding three clauses or any
estate, executor, administrator, committee or beneficiaries of any of the foregoing or (v) any trust, corporation,
partnership, limited liability company or other entity, the beneficiaries, shareholders, partners, members or
Persons holding at least a majority interest therein.
“Permitted Investment” means an Investment:
(1) in a Restricted Subsidiary or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary;
(2) in the Company;
(3) in another Person if as a result of such Investment such other Person is merged or consolidated
with or into, or transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary;
(4) in cash and Cash Equivalents;
(5) in receivables owing to the Company or any Restricted Subsidiary created or acquired in the
ordinary course of business and payable or dischargeable in accordance with customary trade
terms; provided, however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the circumstances;
(6) in payroll, travel and similar advances to cover matters that are made in the ordinary course of
business;
(7) in loans or advances to employees not in excess of €100,000 at any one time outstanding and
made in compliance with applicable laws;
(8) in Capital Shares, obligations or securities received in settlement of debts created in the ordinary
course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments or Liens or security interests, or settlements of litigation, arbitration or other disputes,
or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of a debtor;
(9) made as a result of the receipt of non-cash consideration from (i) an Asset Disposition that was
made pursuant to and in compliance with “— Certain Covenants — Limitation on Sales of Assets
and Subsidiary Shares” or (ii) any other disposition of property or assets or the issuance or sale of
Equity Interests not constituting an Asset Disposition;
(10) in existence on the Issue Date (or in respect of which a binding commitment to make such
Investment exists on the Issue Date), and any extension, modification or renewal of such
Investments or commitments, but only to the extent such extension, modification or renewal does
not involve additional advances, contributions or other Investments (or in the case of
commitments, increase the amount committed), other than as a result of the accrual or accretion of
interest or original issue discount or the issuance by such investee of pay-in-kind securities, in
each case, pursuant to the terms of such Investment or commitment);
(11) in Currency Agreements, Interest Rate Agreements, Commodity Hedging Agreements and related
Hedging Obligations, which transactions or obligations are Incurred in compliance with
“— Certain Covenants — Limitation on Indebtedness”;
(12) in Guarantees permitted to be Incurred in accordance with “— Certain Covenants — Limitation
on Indebtedness”;
(13) acquired by the Company or any Restricted Subsidiary in exchange for the issuance of Qualified
Capital Shares of the Company;
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(14) any Investment to the extent such Investment consists of prepaid expenses, negotiable instruments
held for collection and lease, utility and workers’ compensation, performance and other similar
deposits made in the ordinary course of business by the Company or any of its Restricted
Subsidiaries;
(15) any Investment held by a Person that becomes a Restricted Subsidiary, provided that such
Investment was not acquired in contemplation of the acquisition of such Person (or in respect of
which a binding commitment to make such Investment exists on the date such Person becomes a
Restricted Subsidiary) and any extension, modification or renewal of such Investment or
commitment, but only to the extent such extension, modification or renewal does not involve
additional advances, contributions or other Investments (or in the case of a commitment, increase
the amount committed), other than as a result of the accrual or accretion of interest or original
issue discount or the issuance by such investee of pay-in-kind securities, in each case, pursuant to
the terms of such Investment or commitment;
(16) any Investment consisting of deposits made in connection with self-insurance;
(17) any Investment represented by Hedging Obligations;
(18) any Investment made in connection with the Transactions; and
(19) which, when taken together with all other Investments pursuant to this clause (19) and then
outstanding, will not exceed 2.0% of the total assets of the Company and its Restricted
Subsidiaries (determine on a consolidated basis in accordance with IFRS).
“Permitted Liens” means, with respect to the Company and its Restricted Subsidiaries:
(1) Liens securing Indebtedness and other obligations under Credit Facilities to the extent such
Indebtedness is permitted under clause (1) of the second paragraph under the “— Certain
Covenants — Limitation on Indebtedness” covenant; provided that any such Lien is limited to all
or part of the current assets (determined in accordance with IFRS and other than Asset Sale Cash
Collateral) of the Company or a Restricted Subsidiary;
(2) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or
thereafter can be paid without penalty or (b) contested in good faith by appropriate proceedings
and as to which the Company or its Restricted Subsidiaries shall have set aside on its books such
reserves as may be required pursuant to IFRS;
(3) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of
business;
(4) Liens incurred or deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed money);
(5) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded
and any appropriate legal proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which such proceedings may
be initiated shall not have expired;
(6) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect
of real property not interfering in any material respect with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries;
(7) any interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens
do not extend to any property or assets which is not leased property subject to such Capitalized
Lease Obligation;
(8) Liens securing Purchase Money Indebtedness incurred or in the ordinary course of business;
provided, however, that (a) such Purchase Money Indebtedness shall not exceed the purchase price
or other cost of such property or equipment and shall not be secured by any property or equipment
of the Company or any Restricted Subsidiary of the Company other than the property and
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equipment so acquired and (b) the Lien securing such Purchase Money Indebtedness shall be
created within 90 days of such acquisition;
(9) Liens upon specific items of inventory or other goods and proceeds of any Person securing such
Person’s obligations in respect of bankers’ acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(10) Liens securing reimbursement obligations with respect to commercial letters of credit which
encumber documents and other property relating to such letters of credit and products and
proceeds thereof;
(11) Liens encumbering deposits made to secure obligations arising from statutory, regulatory,
contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(12) Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be
under the Indenture, secured by a Lien on the same property securing such Hedging Obligation;
(13) other than with respect to the Austrian Acquisition, Liens on property or shares of stock of a
Person (other than shares of stock of a First Tier Acquired Company) and its Subsidiaries at the
time such Person becomes a Restricted Subsidiary of the Company; provided that such Liens
either (i) existed on or prior to the time such Person became a Restricted Subsidiary or (ii) are
created or Incurred in connection with, or in contemplation of, such other Person becoming such a
Restricted Subsidiary; provided, further, that such Liens may not extend to any other property
owned by the Company or any other Restricted Subsidiary;
(14) Liens on property at the time the Company or a Restricted Subsidiary acquired the property,
including any acquisition by means of a merger or consolidation with or into the Company or any
Restricted Subsidiary; provided that such Liens are not created or Incurred in connection with, or
in contemplation of, such acquisition; provided, further, that such Liens may not extend to any
other property other than property affixed or appurtenant thereto;
(15) Liens on assets of a Restricted Subsidiary of the Company that is not a Guarantor to secure
Indebtedness of such Restricted Subsidiary that is otherwise permitted under the Indenture;
(16) leases, subleases, licenses and sublicenses granted to others that do not materially interfere with
the ordinary cause of business of the Company and its Restricted Subsidiaries;
(17) banker’s Liens, rights of setoff and similar Liens with respect to cash and Cash Equivalents on
deposit in one or more bank accounts in the ordinary course of business;
(18) Liens arising from U.S. Uniform Commercial Code financing statement filings (or similar filings
in other applicable jurisdictions) regarding operating leases entered into by the Company and the
Restricted Subsidiaries in the ordinary course of business;
(19) Liens existing on the Issue Date and not otherwise referred to in this definition (not including any
Lien with respect to Indebtedness repaid or refinanced with the proceeds of, or simultaneously
with, the offering of the Notes unless any such Lien is terminated following the Issue Date and
only remain in existence following the Issue Date pending the making of a governmental,
regulatory or similar application; provided that such Liens are terminated within 30 days after the
Issue Date or the Company or a Restricted Subsidiary is taking appropriate actions in good faith to
achieve the termination of such Lien as promptly as practicable);
(20) Liens on the assets of the Target and its Subsidiaries existing on the Acquisition Closing Date and
not otherwise referred to in this definition, provided, the Indebtedness which is the subject of such
Lien is otherwise permitted under the Indenture;
(21) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of
custom duties in connection with the importation of goods;
(22) Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously
so secured (other than Refinancing Indebtedness incurred in connection with the Transactions);
provided that any such Lien is limited to all or part of the same property or assets that secured the
Indebtedness being refinanced;
(23) Liens on the funds or securities deposited for the purpose of defeasing or redeeming any
Indebtedness on or prior to its maturity date, to the extent such defeasance or redemption is
permitted under the Indenture;
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(24) Liens created for the benefit of (or to secure) the Notes or any Notes Guarantee (including any
Liens granted on the Collateral pursuant to the Security Documents);
(25) Permitted Collateral Liens;
(26) Liens created for the benefit of the Company or the Issuer over the assets of the Target Group to
secure the Target’s obligations under the Acquisition On-Loan;
(27) Liens securing the Indebtedness incurred under intercompany loans or notes to the Company or a
Restricted Subsidiary of the proceeds from the incurrence of Indebtedness by a Finance Subsidiary
to the extent the underlying Indebtedness is otherwise permitted to be incurred under the
Indenture;
(28) Liens securing:
(a) Indebtedness (including committed but unallocated portions) permitted to be incurred
under clause (15) of the second paragraph under the “— Certain Covenants — Limitation
on Indebtedness” covenant; provided any such Liens are limited to assets or property of
the Target and its Restricted Subsidiaries;
(b) Indebtedness (including committed but unallocated portions) permitted to be incurred
the Centrostal and its Restricted Subsidiaries;
(c) Indebtedness (including committed but unallocated portions) permitted to be incurred
the Kapital Sp. z o.o. and its Restricted Subsidiaries; and
(d) Indebtedness (including committed but unallocated portions) permitted to be incurred
on Indebtedness” covenant;
(29) Liens securing the escrowed funds deposited in accordance with the Escrow Agreement or any
similar escrow agreement established in connection with the pre-funding of an acquisition; and
(30) Liens granted to the Trustee for its compensation and indemnities pursuant to the Indenture.
“Permitted Restrictions” means any restriction, direct or indirect, on the ability of a Restricted Subsidiary
to pay dividends or make any other payment or distribution which is described in paragraphs (1), (2), (3), (10) or
(11) of the covenant described under “Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries”.
“Person” means an individual, partnership, corporation, limited liability company, unincorporated
organization, joint-stock company, trust or joint venture, or a governmental agency or political subdivision
thereof.
“Public Equity Offering” means any public offering of Capital Shares of the Company that is either
underwritten or made pursuant to a prospectus approved by either the Polish competent authority or the relevant
competent authority in a European Union member state whereby the Company receives gross proceeds of not
less than €20 million (equivalent).
“Preferred Shares” of any Person means any Capital Shares of such Person that have preferential rights to
any other Capital Shares of such Person with respect to dividends or redemption or upon liquidation.
“Purchase Money Indebtedness” means Indebtedness, including mortgage financing, of the Company and
its Restricted Subsidiaries incurred in the normal course of business for the purpose of financing all or any part of
the purchase price, or the cost of installation, construction, addition to or improvement, of property or equipment.
“Qualified Capital Shares” means any Capital Shares that are not Disqualified Capital Shares.
“Qualified Financial Advisor” means an accounting, appraisal or investment banking or consulting firm
of international standing that is, in the reasonable judgment of the Supervisory Board of the Company, qualified
to perform the tasks for which such firm has been engaged and independent with respect to the Company and its
Affiliates.
“Refinance” means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, discharge, defease or retire, or to issue a security or Indebtedness in exchange or replacement
for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative
meanings.
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“Refinancing Indebtedness” means Indebtedness that is Incurred to Refinance any Indebtedness,
including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:
(1) (a) if the Stated Maturity of the Indebtedness being Refinanced is earlier than the Stated Maturity
of the Notes, the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced or (b) if the Stated Maturity of the Indebtedness
being Refinanced is later than the Stated Maturity of the Notes, the Refinancing Indebtedness has
a Stated Maturity later than the Stated Maturity of the Notes;
(2) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than the sum of the
aggregate principal amount (or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being Refinanced (plus, without duplication, any additional
Indebtedness Incurred to pay interest or premiums required by the instruments governing such
existing Indebtedness and fees and expenses Incurred in connection therewith); and
(4) if the Indebtedness being Refinanced is subordinated in right of payment to the Notes or a
Guarantor’s Notes Guarantee, such Refinancing Indebtedness is subordinated in right of payment
to the Notes or such Notes Guarantee at least to the same extent as such Indebtedness being
Refinanced.
provided, further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of the Company or
a Subsidiary of the Company that Refinances Indebtedness of the Issuer, (B) Indebtedness of a Guarantor that
Refinances Indebtedness of a non-Guarantor Restricted Subsidiary or (C) Indebtedness of the Issuer, the
Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
“Replacement Assets” means properties and assets, including Capital Shares and investments in joint
ventures to the extent permitted by the covenant described under “Certain Covenants — Limitation on Restricted
Payments”) that are or will be used or useful in the business of the Company and its Restricted Subsidiaries as
existing on the Issue Date or in a Permitted Business.
“Responsible Officer” means any officer within the Corporate Trust Administration group of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Subsidiary” of any Person means any Subsidiary of such Person which at the time of
determination is not an Unrestricted Subsidiary; unless otherwise expressly stated, a “Restricted Subsidiary” will
be interpreted to mean a Restricted Subsidiary of the Company and will include the Issuer.
“Revolving Credit Facilities” means the revolving credit facilities under one or more revolving credit
facility agreements (the “Revolving Credit Facilities Agreements”), and entered into by, inter alia, the Company
and the other financial institutions party thereto, as lenders, together with the related documents thereto,
including, without limitation, any guarantee agreements and security documents, and, in each case, as such
documentation, in whole or in part, may be amended, renewed, extended, substituted, refinanced, restructured,
replaced (whether upon or after termination or otherwise), supplemented or otherwise modified from time to time
under one or more Credit Facilities (without limitation as to amount, outstanding or committed, or the maturity,
terms, conditions, covenants or other provisions thereof or parties thereto) (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing).
“Sale and Leaseback Transaction” means any direct or indirect arrangement with any Person or to which
any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or later acquired, which has been
or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
“Securities Act” means the U.S. Securities Act of 1933, as amended, or any successor statute or statutes
thereto.
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“Security Documents” means, collectively, all security agreements, mortgages, deeds of trust, pledges
(including the Share Pledges), collateral assignments and other agreements or instruments evidencing or creating
any security in favor of the Collateral Agent or any Holders of the Notes in any or all of the Collateral, in each
case as amended from time to time in accordance with their terms and the terms of the Indenture.
“Senior Indebtedness” means, with respect to any Person, all obligations of such Person, whether
outstanding on the Issue Date or thereafter created, incurred or assumed, without duplication, consisting of
principal of and premium, if any, accrued and unpaid interest on, and fees and other amounts relating to, all
Indebtedness of such Person, including interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person, regardless of whether post-filing interest is allowed in such proceeding.
Notwithstanding anything to the contrary in the preceding paragraph, Senior Indebtedness will not
include:
(1) any Indebtedness Incurred in violation of the Indenture;
(2) any obligations of such Person to its Subsidiaries or other Affiliates;
(3) any liability for national, local, or other taxes owed or owing by such Person;
(4) any accounts payable or other liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities);
(5) any Indebtedness, Guarantee or obligation of such Person that is expressly subordinate or junior in
right of payment to any other Indebtedness, Guarantee or obligation or obligation of such Person,
including, without limitation, any Subordinated Indebtedness or Guarantor Subordinated
Indebtedness, as the case may be; or
(6) any Capital Shares.
“Significant Subsidiary” means a Restricted Subsidiary of the Company that, together with its
Subsidiaries:
(a) for the Company’s most recent fiscal year, accounted for more than 10% of the consolidated
revenues of the Company and its Restricted Subsidiaries; or
(b) as of the end of such fiscal year, was the owner of more than 10% of the consolidated assets of the
Company and its Restricted Subsidiaries, all as set forth on Company’s most recently available
consolidated financial statements for such fiscal year; or
(c) was organized or acquired after the beginning of such fiscal year and would have been a
Significant Subsidiary if it had been owned during the entire fiscal year or is a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X under the Securities Act as in effect on the
Issue Date.
“Standard & Poor’s” means Standard & Poor’s Investors Ratings Services or any of its successors or
assigns that is a Nationally Recognized Statistical Rating Organization.
“Stated Maturity” means, when used with respect to any Note or any installment of interest thereon, the
date specified in such Note as the fixed date on which the principal of such Note or such installment of interest,
respectively, is due and payable, and, when used with respect to any other indebtedness, means the date specified
in the instrument governing such indebtedness as the fixed date on which the principal of such indebtedness, or
any installment of interest thereon, is due and payable.
“Subordinated Indebtedness” means any Indebtedness of the Issuer (whether outstanding on the date of
the Indenture or thereafter Incurred) which is subordinate or junior in right of payment to the Notes pursuant to a
written agreement.
“Subsidiary”, with respect to any Person, means:
(1) any corporation of which the outstanding Capital Shares having at least a majority of the votes
entitled to be cast in the election of directors or members of the supervisory board or analogous
board or body under ordinary circumstances shall at the time be owned, directly or indirectly, by
such Person; or
(2) any other Person of which at least a majority of the voting interest under ordinary circumstances is
at the time, directly or indirectly, owned by such Person.
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“Subsidiary Guarantors” means (i) on and after the Issue Date, Odlewnia Metali Szopienice Sp. z o.o.,
Zaklad Walcowniczy-Walcownia Bruzdowa Sp. z o.o., HSW-Huta Stali Jakosciowych S.A., Ferrostal Łabȩdy
Sp. z o.o. and Złomrex Zbrojarnia Sp. z o.o. and (ii) any person who in the future executes a supplemental
indenture in which such person agrees to be bound by the terms of the Indenture as a Subsidiary Guarantor.
“Supervisory Board” means the supervisory board of the Issuer or Company, as applicable, or an
analogous board or body or any committee thereof duly authorized to act on behalf of such board.
“Target” means voestalpine Stahlhandel GmbH, and any successor in interest thereto.
“Target Group” means the Target and its Subsidiaries from time to time.
“Transactions” means, collectively, any or all of the following:
(1) the entry into of the Indenture, the Notes and the Security Documents, the carrying out of the
transactions contemplated thereby and the incurrence of Indebtedness thereunder and the other
transactions contemplated thereby;
(2) the entry into of the Revolving Credit Facilities Agreements, the incurrence of Indebtedness
thereunder and the other transactions contemplated thereby;
(3) the completion of the Austrian Acquisition and all direct or indirect related distributions or
payments of the purchase price in respect of the Capital Shares acquired in the Austrian
Acquisition;
(4) the repayment of certain existing Indebtedness of the Target Group with the proceeds of the
Acquisition On-Loan, as contemplated by this Offering Memorandum; and
(5) all transactions and performance of obligations relating to any of the foregoing (including, without
limitation, payment of fees and expenses related to any of the foregoing, including, without
limitation, Acquisition Costs).
“Unrestricted Subsidiary” of any Person means:
(1) any Subsidiary of such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Supervisory Board (or analogous board or body) of
such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Supervisory Board (or analogous board or body) of the Company may designate any Subsidiary,
including any newly acquired or newly formed Subsidiary, to be an Unrestricted Subsidiary unless that
Subsidiary owns any Capital Shares of, or owns or holds any Lien on any of the property of, any other Subsidiary
of the Company that is not a Subsidiary of the Subsidiary to be so designated.
Notwithstanding the foregoing:
(1) the Company must certify to the Trustee that this designation complies with the “— Certain
Covenants — Limitation on Restricted Payments”; and
(2) each Subsidiary to be so designated and each of its Subsidiaries has not at the time of designation,
and does not thereafter, Incur any Indebtedness pursuant to which the lender has recourse to any
assets of the Company or any of its Restricted Subsidiaries.
The Supervisory Board (or analogous board or body) of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if:
(1) immediately after giving effect to this designation, the Company can incur at least €1.00 of
additional Indebtedness, other than Permitted Indebtedness, in compliance with the “— Certain
Covenants — Limitation on Indebtedness”; and
(2) immediately before and immediately after giving effect to this designation, no Default or Event of
Default shall have occurred and be continuing.
Any designation by the Supervisory Board (or analogous board or body) shall be evidenced by promptly
filing with the Trustee a copy of the Board Resolution giving effect to the designation and an Officers’
Certificate certifying that the designation complied with the foregoing provisions.
“Voting Shares” means any class or classes of Capital Shares pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a majority of the supervisory board, board
of directors, managers or trustees (or Persons performing similar functions) of any Person (irrespective of
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whether or not, at the time, shares or stock of any other class or classes shall have, or might have, voting power
by reason of the happening of any contingency).
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of
years obtained by dividing (1) the then outstanding aggregate principal amount of such Indebtedness into (2) the
sum of the total of the products obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) which will elapse between such
date and the making of such payment.
“Wholly Owned Restricted Subsidiary” of any Person means any Wholly Owned Subsidiary of such
Person which at the time of determination is a Restricted Subsidiary of such Person.
“Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person of which all the
outstanding Capital Shares (other than directors’ qualifying shares or an immaterial amount of shares required to
be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned
Subsidiary of such Person.
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BOOK-ENTRY, DELIVERY AND FORM
Notes sold to qualified institutional buyers in reliance on Rule 144A under the US Securities Act will
initially be represented by global notes in registered form without interest coupons attached (the “Rule 144A
Global Notes”). Notes sold to non-US persons outside the United States in reliance on Regulation S under the US
Securities Act will initially be represented by global notes in registered form without interest coupons attached
(the “Regulation S Global Notes” and, together with the Rule 144A Global-Note, the “Global Notes”). The
Global Notes will be deposited with a common depositary, and registered in the name of the nominee of the
common depositary for the accounts of Euroclear and Clearstream.
Ownership of interests in the Rule 144A Global Notes (the “Restricted Book-Entry Interests”) and
ownership of interests in the Regulation S Global Notes (the “Unrestricted Book-Entry Interests” and, together
with, the Restricted Book-Entry Interests, the “Book-Entry Interests”) will be limited to persons that have
accounts with Euroclear and/or Clearstream or persons that hold interests through such participants.
Euroclear and Clearstream will hold interests in the Global Notes on behalf of their participants through
customers’ securities accounts in their respective names on the books of their respective depositaries. Except
under the limited circumstances described below, Notes will not be issued in definitive form.
Book-Entry Interests will be shown on, and transfers thereof will be effected only through, records
maintained by Euroclear and Clearstream and their participants. The laws of some jurisdictions, including some
states of the United States, may require that certain purchasers of securities take physical delivery of those
securities in definitive form. The foregoing limitations may impair your ability to own, transfer or pledge Book-
Entry Interests. In addition, while the Notes are in global form, holders of Book-Entry Interests will not be
considered the owners or “holders” of Notes for any purpose.
So long as the Notes are held in global form, Euroclear and/or Clearstream, as applicable, or their
respective nominees, will be considered the sole holder(s) of the Global Notes for all purposes under the
Indenture. In addition, participants must rely on the procedures of Euroclear and Clearstream and indirect
participants must rely on the procedures of the participants through which they own Book-Entry Interests to
transfer their interests or to exercise any rights of holders of Notes under the Indenture. Neither the Group nor the
Trustee will have any responsibility or be liable for any aspect of the records relating to the Book-Entry Interests.
Redemption of the Global Notes

In the event any Global Note (or any portion thereof) is redeemed, Euroclear and/or Clearstream, as
applicable, will redeem an equal amount of the Book-Entry Interests in such Global Note from the amount
received by it in respect of the redemption of such Global Note. The redemption price payable in connection with
the redemption of such Book-Entry Interests will be equal to the amount received by Euroclear and Clearstream,
as applicable, in connection with the redemption of such Global Note (or any portion thereof). We understand
that, under the existing practices of Euroclear and Clearstream, if fewer than all of the Notes are to be redeemed
at any time, Euroclear and Clearstream will credit their respective participants’ accounts on a proportionate basis
(with adjustments to prevent fractions) or on such other basis as they deem fair and appropriate; provided,
however, that no Book-Entry Interest of €50,000 principal amount or less may be redeemed in part.
Payments on Global Notes

Payments of any amounts owing in respect of the Global Notes (including principal, premium, if any,
interest and Additional Amounts, if any) will be made by the Issuer to the common depositary or its nominee for
Euroclear and Clearstream. The common depositary or its nominee will distribute such payments to participants
in accordance with their procedures. Payments of all such amounts will be made without deduction or
withholding for or on account of any present or future taxes, duties, assessments or governmental charges of
whatever nature except as may be required by law. If any such deduction or withholding is required to be made
by any applicable law or regulation or otherwise as described under “Description of the Notes — Withholding
Taxes” then, to the extent described under “Description of the Notes — Withholding Taxes”, such Additional
Amounts will be paid as may be necessary in order that the net amounts received by any holder of the Global
Notes or owner of Book-Entry Interests after such deduction or withholding will equal the net amounts that such
holder or owner would have otherwise received in respect of such Global Note or Book-Entry Interest, as the
case may be, absent such withholding or deduction. We expect that payments by participants to owners of Book-
Entry Interests held through those participants will be governed by standing customer instructions and customary
practices. Under the terms of the Indenture, we and the Trustee will treat the registered holder of the Global
Notes (i.e., Euroclear or Clearstream (or their respective nominees)) as the owner thereof for the purpose of
161
receiving payments and for all other purposes. Consequently, none of us, the Trustee or any of our or the
Trustee’s agents has or will have any responsibility or liability for:
(1) any aspect of the records of Euroclear or Clearstream or of any participant or indirect participant
relating to or payments made on account of a Book-Entry Interest, for any such payments made by
Euroclear or Clearstream or any participant or indirect participant or for maintaining, supervising
or reviewing the records of Euroclear or Clearstream or any participant or indirect participant
relating to or payments made on account of a Book-Entry Interest;
(2) Euroclear or Clearstream or any participant or indirect participant; or
(3) the records of the common depositary.
Currency of Payment for the Global Notes

The principal of, premium, if any, and interest on, and all other amounts payable in respect of, the Global
Notes will be paid to holders of interests in such Notes through Euroclear or Clearstream in euro.
Action by Owners of Book-Entry Interests

Euroclear and Clearstream have advised us that they will take any action permitted to be taken by a
holder of Notes (including the presentation of Notes for exchange as described above) only at the direction of one
or more participants to whose account the Book-Entry Interests in the Global Notes are credited and only in
respect of such portion of the aggregate principal amount of Notes as to which such participant or participants
has or have given such direction. Euroclear and Clearstream will not exercise any discretion in the granting of
consents, waivers or the taking of any other action in respect of the Global Notes. However, if there is an Event
of Default under the Notes, Euroclear and Clearstream reserve the right to exchange the Global Notes for
definitive registered Notes (“Definitive Registered Notes”) in certificated form, and to distribute such Definitive
Registered Notes to its participants.
Transfers
Transfers between participants in Euroclear and Clearstream will be effected in accordance with
Euroclear’s and Clearstream’s rules and will be settled in immediately available funds. If a holder of Notes
requires physical delivery of Definitive Registered Notes for any reason, including to sell Notes to persons in
states which require physical delivery of such securities or to pledge such securities, such holder of Notes must
transfer its interest in the Global Notes in accordance with the normal procedures of Euroclear and Clearstream
and in accordance with the procedures set forth in the Indenture.
The Global Notes will bear a legend to the effect set forth in “Notice to Investors”. Book-Entry Interests
in the Global Notes will be subject to the restrictions on transfers and certification requirements discussed under
“Notice to Investors”.
Transfer of Restricted Book-Entry Interests to persons wishing to take delivery of Restricted Book-Entry
Interests will at all times be subject to such transfer restrictions.
Restricted Book-Entry Interests may be transferred to a person who takes delivery in the form of any
Unrestricted Book-Entry Interest only upon delivery by the transferor of a written certification (in the form provided
in the relevant Indenture) to the effect that such transfer is being made in accordance with Regulation S or Rule 144
(if available) under the US Securities Act. Prior to 40 days after the date of initial issuance of the Notes, ownership
of Unrestricted Book-Entry Interests will be limited to persons that have accounts with Euroclear or Clearstream or
persons who hold interests through Euroclear or Clearstream, and any sale or transfer of such interest to US persons
shall not be permitted during such period unless such resale or transfer is made pursuant to Rule 144A. Unrestricted
Book-Entry Interests may be transferred to a person who takes delivery in the form of Restricted Book-Entry
Interests only upon delivery by the transferor of a written certification (in the form provided in the relevant
Indenture) to the effect that such transfer is being made to a person who the transferor reasonably believes is a
“qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule
144A or otherwise in accordance with the transfer restrictions described under “Notice to Investors” and in
accordance with any applicable securities laws of any other jurisdiction.
Any Book-Entry Interest in one of the Global Notes that is transferred to a person who takes delivery in
the form of a Book-Entry Interest in the other Global Note will, upon transfer, cease to be a Book-Entry Interest
in the first mentioned Global Note and become a Book-Entry Interest in such other Global Note, and,
accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to Book-
Entry Interests in such other Global Note for as long as it remains such a Book-Entry Interest.
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Definitive Registered Notes
Under the terms of the Indenture, owners of the Book-Entry Interests will receive Definitive Registered
Notes only:
(1) if either Euroclear or Clearstream notifies us that it is unwilling or unable to continue to act and a
successor is not appointed by the Issuer within 120 days;
(2) if Euroclear or Clearstream so requests following an Event of Default under the Indenture;
(3) at any time if we, in our sole discretion, determine that all the Global Notes should be exchanged
for Definitive Registered Notes; or
(4) if we are required under the terms of the Indenture to exchange all or part of a Global Note for
Definitive Registered Notes, including upon an Event of Default under Indenture.
Information Concerning Euroclear and Clearstream

We understand as follows with respect to Euroclear and Clearstream:
All Book-Entry Interests will be subject to the operations and procedures of Euroclear and Clearstream,
as applicable. The following summaries of those operations and procedures are provided solely for the
convenience of investors. The operations and procedures of each settlement system are controlled by that
respective settlement system and may be changed at any time. Neither the Issuer nor the Initial Purchaser is
responsible for those operations or procedures.
Euroclear and Clearstream hold securities for participating organizations and facilitate the clearance and
settlement of securities transactions between their respective participants through electronic book-entry changes
in accounts of such participants. Euroclear and Clearstream provide to their participants, among other things,
services for safekeeping, administration, clearance and settlement of internationally traded securities and
securities lending and borrowing. Euroclear and Clearstream interface with domestic securities markets.
Euroclear and Clearstream participants are financial institutions such as underwriters, securities brokers and
dealers, banks, trust companies and certain other organisations. Indirect access to Euroclear or Clearstream is
also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a
custodian relationship with Euroclear or Clearstream participants, either directly or indirectly.
Because Euroclear and Clearstream can only act on behalf of participants, who in turn act on behalf of
indirect participants and certain banks, the ability of an owner of a beneficial interest to pledge such interest to
persons or entities that do not participate in the Euroclear or Clearstream systems, or otherwise take actions in
respect of such interest, may be limited by the lack of a definitive certificate for that interest. The laws of some
jurisdictions require that certain persons take physical delivery of securities in definitive form. Consequently, the
ability to transfer beneficial interests to such persons may be limited. In addition, owners of beneficial interests
through Euroclear or Clearstream systems will receive distributions attributable to the 144A Global Notes only
through Euroclear or Clearstream participants.
Trustee’s Powers
In considering the interests of the holders of the Notes, while title to the Notes is registered in the name of
a nominee for a clearing system, the Trustee may have regard to, and rely on, any information provided to it by
that clearing system as to the identity (either individually or by category) of its accountholders with entitlements
to Notes and may consider such interests as if such accountholders were the holders of the Notes.
Enforcement
For the purposes of enforcement of the provisions of the Indenture against the Trustee, the persons named
in a certificate of the holder of the Notes in respect of which a Global Note is issued shall be recognized as the
beneficiaries of the trusts set out in the Indenture to the extent of the principal amounts of their interests in the
Notes set out in the certificate of the holder, as if they were themselves the holders of Notes in such principal
amounts.
163
PLAN OF DISTRIBUTION
The Issuer, the Guarantors and the Initial Purchaser will enter into a purchase agreement (the “Purchase
Agreement”), dated January 23, 2007 with respect to the Notes. The Initial Purchaser will agree to purchase, and
the Issuer will agree to sell, all of the Notes pursuant to the terms of the Purchase Agreement.
The Purchase Agreement provides that the obligations of the Initial Purchaser to purchase and accept
delivery of the Notes offered hereby are subject to certain conditions precedent. The Initial Purchaser is obligated
to purchase and accept delivery of all the Notes if any are purchased.
The purchase price for the Notes will be the initial offering price set forth on the cover page of this
Offering Memorandum less an Initial Purchaser’s discount. The Initial Purchaser proposes to offer the Notes at
the initial offering price. After the Notes are released for sale, the Initial Purchaser may change the offering price
and other selling terms.
The Notes and the Guarantees have not been and will not be registered under the US Securities Act. The
Initial Purchaser has agreed that it will only offer or sell the Notes (1) outside the United States to non-US
persons in offshore transactions in reliance on Regulation S and (2) in the United States to qualified institutional
buyers in reliance on Rule 144A. The terms used above have the meanings given to them by Regulation S and
Rule 144A.
In connection with the sales outside the United States, the Initial Purchaser has agreed that it will not
offer, sell or deliver the Notes to, or for the account or benefit of, US persons (1) as part of the initial distribution
at any time or (2) otherwise until 40 days after the later of the commencement of this offering or the date the
Notes were originally issued. The Initial Purchaser will send to each dealer to whom it sells such Notes during
such 40-day period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes
within the United States by a dealer or to, or for the account or benefit of, US persons.
In addition, with respect to Notes initially sold pursuant to Regulation S, until 40 days after the
commencement of the offering of the Notes, an offer or sale of such Notes within the United States by a dealer
that is not participating in the offering of the Notes may violate the registration requirements of the US Securities
Act if such offer or sale is made otherwise than in accordance with Rule 144A or pursuant to another exemption
from registration under the US Securities Act.
Persons who purchase Notes from the Initial Purchaser may be required to pay stamp duty, taxes and
other charges in accordance with the laws and practice of the country of purchase in addition to the offering price
set forth on the cover page hereof.
In connection with the offering of the Notes, the Initial Purchaser or its affiliates may purchase and sell
Notes in the open market. These transactions may include short sales, over-allotments, stabilizing transactions
and purchases to cover positions created by short sales or over-allotments. Short sales involve the sale by the
Initial Purchaser or its affiliates of a greater number of Notes than they are required to purchase in the offering of
the Notes. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the Notes while the offering of the Notes is in progress.
These activities by the Initial Purchaser or its affiliates may stabilise, maintain or otherwise affect the
market price of the Notes. As a result, the price of the Notes may be higher than the price that otherwise might
exist in the open market. There is no obligation on the Initial Purchaser or its affiliates to conduct these activities.
If these activities are commenced, they may be discontinued by the Initial Purchaser or its affiliates at any time.
These transactions may be effected in the over-the-counter market or otherwise.
The Initial Purchaser expects to make offers and sales both inside and outside the United States through
its selling agents. Any offers and sales in the United States will be conducted by broker-dealers registered with
the US Securities and Exchange Commission.
The Initial Purchaser has also agreed that (a)(i) it is a qualified investor (with the meaning of section
86(7) of the Financial Services and Markets Act 2000) (the “FSMA”) and (ii) it has not offered or sold and will
not offer to sell any Notes except to persons who are qualified investors or otherwise in circumstances which do
not require a prospectus to be made available to the public in the United Kingdom within the meaning of section
85(1) of the FSMA; (b) it has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or sale of the Notes in circumstances in
which section 21(1) of the FSMA does not apply to the Issuer or the Guarantors; and (c) it has complied and will
comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes
in, from or otherwise involving the United Kingdom.
164
The Initial Purchaser has acknowledged that this Offering Memorandum has not been prepared in the
context of a public offering in France within the meaning of Article L.411-1 of the Code monétaire et financier
and Title I of Book II of the Règlement Général of the Autorité des marchés financiers (the “AMF) and therefore
has not been approved by, or registered or filed with the AMF. Consequently, the Initial Purchaser has
represented and agreed that this Offering Memorandum or any other offering material relating to the Notes has
not been and will not be released, issued or distributed or caused to be released, issued or distributed to the public
in France or used in connection with any offer for subscription or sale of notes to the public in France other than
to qualified investors as defined below. The Initial Purchaser has also acknowledged that the Notes being
denominated in Euro, are deemed to be issued outside the Republic of France and, accordingly, has represented
and agreed that (i) it has not offered or sold and will not offer or sell, directly or indirectly, the Notes to the
public in the Republic of France (an appel public à l’épargne as defined in Article L.411-1 of the French Code
monétaire et financier) and (ii) offers and sales of Notes in the Republic of France and will be made only to
qualified investors (investisseurs qualifies) and defined in Articles L.411-2 and D.411-1 to D.411-4 of the French
Code monétaire et financier in compliance with applicable laws and regulations.
No action has been taken in any jurisdiction, including the United States, by us or the Initial Purchaser
that would permit a public offering of the Notes or the possession, circulation or distribution of this Offering
Memorandum or any other material relating to us, the Group or the Notes in any jurisdiction where action for the
purpose is required. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this
Offering Memorandum nor any other offering material or advertisements in connection with the Notes may be
distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules
and regulations of any such country or jurisdiction. This Offering Memorandum does not constitute an offer to
purchase or a solicitation of an offer to sell in any jurisdiction where such offer or solicitation would be unlawful.
Persons into whose possession this Offering Memorandum comes are advised to inform themselves about and to
observe any restrictions relating to the offering of the Notes, the distribution of this Offering Memorandum and
resales of the Notes. Please see the section entitled “Notice to Investors”.
The Issuer and the Guarantors have agreed to indemnify the Initial Purchaser against certain liabilities,
including liabilities under the US Securities Act. The Issuer will pay the Initial Purchaser a commission and pay
certain fees and expenses relating to the offering of the Notes.
Delivery of the Notes will be made against payment therefor on or about the fourth business day
following the date of pricing of the Notes (such settlement being referred to as “T+4”). Under Rule 15(c)6-1
under the Exchange Act, trades in the secondary market generally are required to settle in three business days
unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the
Notes on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the
Notes will initially settle in T+4, to specify an alternate settlement cycle at the time of such trade to prevent
failed settlement. Purchasers of the Notes who wish to trade the Notes on the date of pricing or the next
succeeding business day should consult their own advisors.
The Initial Purchaser and its affiliates have from time to time performed certain investment banking and/
or other financial services for us, our affiliates or our former affiliates for which they received customary fees
and reimbursement of expenses. The Initial Purchaser and its affiliates may in the future provide investment
banking or other financial services to us or our affiliates for which they will receive customary fees.
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NOTICE TO INVESTORS
You are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of any
of the Notes offered hereby.
The Issuer has not registered and will not register the Notes or the Guarantees under the US Securities
Act and, therefore, the Notes may not be offered or sold within the United States or to, or for the account or
benefit of, US persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act. Accordingly, the Issuer is offering and selling the Notes to the Initial
Purchaser for re-offer and resale only:
Š in the United States to “qualified institutional buyers”, commonly referred to as “QIBs”, as defined in
Rule 144A in compliance with Rule 144A; and
Š in offers and sales that occur outside the United States to foreign purchasers, (i.e., purchasers who are
not US persons).
The term “foreign purchasers” includes dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners, other than an estate or trust, in offshore transactions
meeting the requirements of Rule 903 of Regulation S. We use the terms “offshore transaction”, “US person” and
“United States” with the meanings given to them in Regulation S.
If you purchase Notes, you will be deemed to have represented and agreed as follows:
(1) You understand and acknowledge that the Notes and the Guarantees have not been registered
under the US Securities Act or any other applicable state securities laws and that the Notes are
being offered for resale in transactions not requiring registration under the US Securities Act or
any other state securities laws, including sales pursuant to Rule 144A, and, unless so registered,
may not be offered, sold or otherwise transferred except in compliance with the registration
requirements of the US Securities Act or any other applicable state securities laws, pursuant to an
exemption therefrom, or in a transaction not subject thereto, and in each case in compliance with
the conditions for transfer set forth in paragraph (4) below.
(2) You are not our “affiliate” (as defined in Rule 144A), you are not acting on our behalf and you are
either:
(a) a QIB and are aware that any sale of these Notes to you will be made in reliance on Rule
144A and such acquisition will be for your own account or for the account of another QIB;
or
(b) not a “US person” as defined in Regulation S or purchasing for the account or benefit of a
US person (other than a distributor) and you are not purchasing Notes in an offshore
transaction in accordance with Regulation S.
(3) You acknowledge that none of the Issuer, the Guarantors, or the Initial Purchaser or any person
representing any of them has made any representation to you with respect to the Group or the offer
or sale of any of the Notes, other than the information contained in this Offering Memorandum,
which Offering Memorandum has been delivered to you and upon which you are relying in
making your investment decision with respect to the Notes. You acknowledge that none of the
Initial Purchaser or any person representing the Initial Purchaser makes any representation or
warranty as to the accuracy or completeness of this Offering Memorandum. You have had access
to such financial and other information concerning the Group and the Notes as you deemed
necessary in connection with your decision to purchase any of the Notes, including an opportunity
to ask questions of, and request information from, the Issuer and the Initial Purchaser.
(4) You are purchasing these Notes for your own account, or for one or more investor accounts for
which you are acting as a fiduciary or agent, in each case for investment, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation of the US Securities
Act, subject to any requirement of law that the disposition of your property or the property of such
investor account or accounts be at all times within your or their control and subject to your or their
ability to resell these Notes pursuant to Rule 144A, Regulation S or any other available exemption
from registration available under the US Securities Act. You agree on your own behalf and on
behalf of any investor account for which you are purchasing these Notes, and each subsequent
holder of these Notes by its acceptance thereof will agree, to offer, sell or otherwise transfer such
Notes prior to (x) the date which is two years (or such shorter period of time as permitted by Rule
144(k) under the US Securities Act or any successor provision thereunder) after the later of the
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date of the original issue of these Notes and the last date on which we or any of our affiliates were
the owner of such Notes (or any predecessor thereto) or (y) such later date, if any, as may be
required by applicable law (the “Resale Restriction Termination Date”) only:
(a) to us;
(b) pursuant to a registration statement which has been declared effective under the US
Securities Act;
(c) for so long as these Notes are eligible for resale pursuant to Rule 144A, to a person you
reasonably believe is a QIB that purchases for its own account or for the account of a QIB
to whom you give notice that the transfer is being made in reliance on Rule 144A;
(d) pursuant to offers and sales to non-US persons occurring outside the United States within
the meaning of Regulation S; or
(e) pursuant to any other available exemption from the registration requirements of the US
Securities Act;
subject in each of the foregoing cases to any requirements of law that the disposition of your
property or the property of your investor account or accounts be at all times within your or their
control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date.
You acknowledge that we, the Trustee, and the Registrar reserve the right prior to any offer, sale or other transfer
pursuant to clause (d) prior to the end of the 40-day distribution compliance period within the meaning of
Regulation S or pursuant to clause (e) above prior to the Resale Restriction Termination Date of the Notes to
require the delivery of an opinion of counsel, certifications and/or other information satisfactory to us, the
Trustee, and the Registrar.
Each purchaser acknowledges that each Note will contain a legend substantially in the following form:
“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS
AMENDED (THE “US SECURITIES ACT”), OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS
A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE US SECURITIES
ACT) OR (B) IT IS NOT A US PERSON AND IS ACQUIRING THIS NOTE IN AN “OFFSHORE
TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT,
(2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE US SECURITIES ACT OR
ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE ISSUER
OR ANY AFFILIATE OF THE ISSUER WERE THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR
OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE US SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE US SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE US
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A UNDER THE US SECURITIES ACT, (D) PURSUANT TO OFFERS
AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE US SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE US SECURITIES
ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE ISSUER, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY
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DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE US
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO THE ISSUER, THE TRUSTEE AND THE REGISTRAR IS
COMPLETED AND DELIVERED BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION”, “UNITED STATES” AND “US PERSON”
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE US SECURITIES ACT.”
THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT WITH
THE APPLICABLE US FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, A US INTERNAL
REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON
THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE
CODE OR AN APPLICABLE US INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR
APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON”
WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE) MAY RESULT IN US FEDERAL
BACKUP WITHHOLDING FROM PAYMENTS TO THE HOLDER IN RESPECT OF THE NOTES
REPRESENTED BY THIS CERTIFICATE”.
If you purchase Notes, you will also be deemed to acknowledge that the foregoing restrictions apply to
holders of beneficial interests in these Notes as well as to holders of these Notes.
(5) You acknowledge that the Registrar will not be required to accept for registration of transfer any
Notes acquired by you, except upon presentation of evidence satisfactory to us and the Registrar
that the restrictions set forth herein have been complied with.
(6) You acknowledge that:
(a) the Issuer, the Initial Purchaser and others will rely upon the truth and accuracy of your
acknowledgments, representations and agreements set forth herein and you agree that, if
any of your acknowledgments, representations or agreements herein cease to be accurate
and complete, you will notify us and the Initial Purchaser promptly in writing; and
(b) if you are acquiring any Notes as a fiduciary or agent for one or more investor accounts,
you represent with respect to each such account that:
(i) you have sole investment discretion; and
(ii) you have full power to make, and make, the foregoing acknowledgments,
representations and agreements.
(7) You agree that you will give to each person to whom you transfer these Notes notice of
any restrictions on the transfer of the Notes.
(8) If you are a purchaser in a sale that occurs outside the United States within the meaning of
Regulation S, you acknowledge that until the expiration of the “distribution compliance
period” (as defined below), you shall not make any offer or sale of these Notes to a US
person or for the account or benefit of a US person within the meaning of Rule 902 under
the US Securities Act. The “distribution compliance period” means the 40-day period
following the issue date for the Notes.
(9) You understand that no action has been taken in any jurisdiction (including the United
States) by the Issuer or the Initial Purchaser that would permit a public offering of the
Notes or the possession, circulation or distribution of this Offering Memorandum or any
other material relating to the Issuer or the Notes in any jurisdiction where action for such
purpose is required. Consequently, any transfer of the Notes will be subject to the selling
restrictions set forth under “Plan of Distribution”.
ERISA
Each acquirer and subsequent transferee of a Note or any interest therein will be deemed to have
represented and warranted that (a) either (i) it is not, and it is not acting on behalf of, an employee benefit plan as
defined in Section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) that is subject to the provisions of Part 4 of Subtitle B of Title I of ERISA, a plan to which
Section 4975 of the United States Internal Revenue Code of 1986, as amended (“Code”) applies, or any entity
whose underlying assets include “plan assets”, As a result of such an employee benefit plan’s or plan’s
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investment in the entity, each a “Benefit Plan Investor”, or a governmental, church or non-US plan which is
subject to any federal, state, local or non-US or other laws or regulations that are substantially similar to the
fiduciary responsibility and prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the
Code (“Similar Law”), and no portion of the assets used by such acquirer or transferee to acquire and hold the
Notes or any interest therein constitutes assets of any such Benefit Plan Investor or such plan, or (ii) the
acquisition, holding and/or disposition of the Notes or any interest therein by such acquirer or transferee does not
and will not constitute a non-exempt prohibited transaction under Section 406 or ERISA or Section 4975 of the
Code and, in the case of a governmental, church or non-US plan, otherwise result in a violation under any Similar
Law; and (b) it agrees not to sell or otherwise transfer the Notes or any interest therein otherwise than to an
acquirer or transferee that is deemed to make these same representations, warranties and agreements with respect
to its acquisition, holding and disposition of the Notes.
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TAX CONSIDERATIONS
United States Federal Income Tax Considerations for US Holders
PURSUANT TO US TREASURY DEPARTMENT CIRCULAR 230, YOU ARE ADVISED THAT THE
FOLLOWING SUMMARY OF CERTAIN US FEDERAL INCOME TAX CONSIDERATIONS IS NOT
INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, BY ANY TAXPAYER FOR THE
PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE US
INTERNAL REVENUE CODE. IT WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF
THE NOTES. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
The following discussion is a summary of certain material US federal income tax consequences of the
purchase, ownership and disposition of Notes by a US holder (defined below), but does not purport to be a
complete analysis of all potential tax considerations relevant to a decision to purchase Notes. This summary is
based upon the US Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and proposed US
Treasury regulations issued thereunder, and judicial and administrative interpretations thereof, each as in effect
on the date hereof, and all of which are subject to change, possibly with retroactive effect. This discussion does
not address all of the US federal income tax consequences that may be relevant to a US holder in light of such
holder’s particular circumstances or to US holders subject to special rules, such as certain financial institutions,
US expatriates (including certain former citizens or “green-card” holders), insurance companies, dealers in
securities or currencies, traders in securities, US holders whose functional currency is not the US dollar, US
holders that are tax residents or domiciled in Poland, France or Luxembourg, tax-exempt organizations, regulated
investment companies, grantor trusts, real estate investment trusts, partnerships or other pass-through entities,
persons liable for alternative minimum tax, and persons holding the Notes as part of a “straddle”, “hedge”,
“conversion transaction” or other integrated transaction. In addition, this summary does not discuss any state,
local, or non-US tax considerations, or any US federal tax considerations other than income tax considerations
(for example, US federal estate or gift tax considerations). This discussion is limited to US holders who purchase
Notes for cash in this offering at their “issue price” (the first price at which a substantial part of the Notes are
sold to the public, excluding sales to bond houses, brokers or similar persons or organizations acting in their
capacity as underwriters, placement agents or wholesalers) and who hold the Notes as capital assets within the
meaning of section 1221 of the Code.
For purposes of this discussion, a “US holder” is a beneficial owner of a Note that is, for US federal income
tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation or any entity
taxable as a corporation created or organized in the United States or under the laws of the United States, any state
thereof or the District of Columbia; (iii) any estate the income of which is subject to US federal income taxation
regardless of its source; or (iv) any trust if a court within the United States is able to exercise primary supervision
over the administration of the trust and one or more United States persons have the authority to control all
substantial decisions of the trust, or if a valid election is in place to treat the trust as a United States person. If a
partnership (including any entity treated as a partnership for US federal income tax purposes) holds the Notes, the
tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of
the partnership. A holder that is a partnership, and partners in such partnership, should consult their own tax
advisors regarding the tax consequences of the purchase, ownership and disposition of the Notes.
Prospective purchasers of the Notes should consult their own tax advisors concerning the tax
consequences of the purchase, ownership and disposition of the Notes in light of their particular circumstances,
including the application of the US federal income tax considerations discussed below, as well as the application
of state, local, foreign and other tax laws.
Characterization of the Notes; Passive Foreign Investment Company Treatment

This summary is based upon the assumption that the Notes will be characterized as indebtedness of the
Issuer for US federal income tax purposes. Prospective purchasers should recognize, however, that, because the
determination is highly factual, there is uncertainty regarding the appropriate US federal income tax
characterization of the Notes, and no rulings have been or will be sought from the Internal Revenue Service
(“IRS”) on this matter. To the extent we are required to take a position regarding the classification of the Notes
for US federal income tax purposes, we intend to treat the Notes as indebtedness for US federal income tax
purposes. It is possible that the IRS might contend that the Notes should be treated not as indebtedness but as
equity of the Issuer, or as indebtedness or equity of the Company, in which case the US federal income tax
consequences to US holders of Notes could be different from those described herein.
If the Notes are recharacterized as equity for US federal income tax purposes, a US holder may be
deemed to own stock in a passive foreign investment company (“PFIC”). In that case, a US holder could be
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subject to adverse US federal income tax consequences, including, without limitation, being required to pay an
interest charge together with tax calculated at maximum ordinary rates on gain recognized on a disposition of a
Note or on certain increased interest payments with respect to a Note. US holders will not be able to make a
Qualified Electing Fund election with respect to the Issuer because the Issuer does not intend to comply with
certain accounting, record-keeping and reporting requirements that would allow US holders to make such an
election. There can be no assurance that US holders will be able to file a PFIC Mark-to-Market election with
respect to the Issuer because shares in the Issuer may not be treated as “regularly traded” on a “qualified
exchange” for purposes of that election.
Prospective purchasers of the Notes are urged to consult their own tax advisors regarding these and other
potential tax consequences in the event the Notes are recharacterized for US federal income tax purposes.
Payments of Interest
It is anticipated that the Notes will be issued at par or at a discount that is “de minimis” for US federal
income tax purposes. Assuming that is the case, subject to the discussions below under “— Additional
Payments”, payments of stated interest on the Notes generally will be taxable to a US holder as ordinary income
at the time such payments are received or accrued, in accordance with the US holder’s method of tax accounting.
A US holder that holds Notes and uses the cash method of accounting for US federal income tax purposes
and that receives a payment of stated interest on those Notes will be required to include in ordinary income the
US dollar value of the euro interest payment (determined based on the spot exchange rate on the date such
payment is received) regardless of whether the payment is in fact converted to US dollars. Generally, a cash
method US holder will not recognize exchange gain or loss with respect to the receipt of such payment, but may
have exchange gain or loss attributable to the actual disposition of the euros so received.
A US holder that holds Notes and uses the accrual method of accounting for US federal income tax
purposes will be required to include in income the US dollar value of the amount of interest income in euros that
has accrued with respect to a Note during an accrual period. The US dollar value of such accrued interest will be
determined by translating such interest at the average rate of exchange for the accrual period or, with respect to
an accrual period that spans two taxable years, at the average rate for the partial period within the taxable year. A
US holder may elect, however, to translate such accrued interest using the spot rate of exchange on the last day of
the accrual period or, with respect to an accrual period that spans two taxable years, using the spot rate of
exchange on the last day of the taxable year. If the last day of an accrual period is within five business days of the
date of receipt of the accrued interest, a US holder may translate such interest using the spot rate of exchange on
the date of receipt. The above election, if made, also will apply to other obligations held by the US holder and
may not be changed without the consent of the IRS. A US holder that uses the accrual method of accounting for
US federal income tax purposes will recognize exchange gain or loss with respect to accrued interest on the date
such interest is received. The amount of exchange gain or loss recognized will equal the difference, if any,
between (i) the US dollar value of the euro payment received (determined on the date such payment is received)
in respect of such accrual period; and (ii) the US dollar value of interest income that has accrued during such
accrual period (as determined above). This gain or loss generally will constitute ordinary income or loss and be
treated as US source income or loss, respectively. A US holder that uses the accrual method may have additional
exchange gain or loss upon the disposition of the euros it receives.
Additional Payments
Certain debt instruments that provide for contingent payments are subject to special rules under US Treasury
regulations relating to “contingent payment debt instruments” (the “CPDI regulations”). In certain circumstances
(see, for example, “Description of the Notes — Redemption”, “Description of the Notes — Withholding Taxes”,
“Description of the Notes — Escrow of Proceeds; Special Mandatory Redemption”, and “Description of the
Notes — Change of Control”), the Issuer or a Guarantor may be obligated to make payments on the Notes in excess
of stated principal and interest. Under the CPDI regulations, the possibility of an additional payment on a Note may
be disregarded for purposes of determining the timing and amount of interest or original issue discount income to be
recognized by a US holder in respect of such Note if the likelihood of the payment, as of the date the Notes are
issued, is remote or the amount of potential payments is incidental or certain other exceptions apply. We do not
intend to treat eventual additional payments on the Notes as contingent payments under the CPDI regulations. It is
possible, however, that the IRS may take a different position regarding the possibility of such additional payments,
in which case, if the position of the IRS were sustained, the timing, amount and character of income recognized with
respect to a Note may be different than described herein and a holder may be required to recognize income in excess
of stated interest on the Note and may be required to treat as interest income all or a portion of any gain recognized
on the disposition of a Note. This summary assumes that the IRS will not take a different position, or, if it takes a
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different position, that such position will not be sustained. Prospective purchasers should consult their own tax
advisors as to the tax considerations that relate to the possibility of additional payments.
Foreign Taxes and Foreign Tax Credit

For taxable years beginning on or before December 31, 2006, interest income earned by a US holder on a
Note generally will constitute foreign source income and generally will be considered “passive” income or, in the
case of certain US holders, “financial services” income (and will constitute “high withholding tax interest” if the
interest is subject to withholding at a rate of 5% or more), which are treated separately from other types of income
in computing the foreign tax credit allowable to US holders under US federal income tax laws. For taxable years
beginning after December 31, 2006, interest income on a Note generally will constitute “passive category income”
or, in the case of certain US holders, “general category income”. Gain or loss on the sale, exchange, retirement or
other taxable disposition of a Note (including foreign currency gain or loss) generally will be treated as US source
income or loss for foreign tax credit purposes.
Should any foreign tax be withheld from payments to a US holder on a Note, the gross amount withheld
(including any amounts withheld with respect to any Additional Amounts paid to a US holder) will be included
in the holder’s income at the time such amount is received or accrued in accordance with the holder’s method of
tax accounting. Foreign withholding tax paid at the rate applicable to a US holder would, subject to limitations
and conditions, be treated as foreign income tax eligible for credit against the holder’s US federal income tax
liability or, at the holder’s election, eligible for deduction in computing taxable income. US holders should
consult their tax advisors regarding the creditability or deductibility of any withholding taxes. Any Additional
Amounts paid generally should constitute foreign source income to a US holder and should be translated into the
US dollar value by the US holder in accordance with the rules governing interest as described above.
Sale, Exchange, Redemption or Other Disposition of Notes

Generally, upon the sale, exchange, redemption or other taxable disposition of a Note, a US holder will
recognize taxable gain or loss equal to the difference between (i) the amount realized on the sale, exchange,
redemption or other taxable disposition (less any amount attributable to accrued but unpaid interest, which will
be taxable as interest income to the extent not previously included in income); and (ii) the US holder’s adjusted
tax basis in the Note. If a US holder receives foreign currency on such a sale, exchange, redemption or other
taxable disposition, the amount realized generally will be based on the US dollar value of the foreign currency
determined on (i) the date of receipt of payment in the case of a cash basis US holder and (ii) on the date of the
disposition in the case of an accrual basis US holder. In the case of a Note that is traded on an established
securities market, a cash basis US holder and, if it so elects, an accrual basis US holder, will determine the US
dollar value of the amount realized by translating the foreign currency to US dollars at the spot rate on the
settlement date of the sale or other disposition. If the US dollar value of the foreign currency taken into account
by a US holder in determining its amount realized differs from the US dollar value of such foreign currency when
received, the US holder will have exchange gain or loss. Such gain or loss will be ordinary income or loss and
generally will be treated as US source income or loss. The US holder may have additional exchange gain or loss
upon the disposition of such foreign currency.
A US holder’s adjusted tax basis in a Note generally will equal the cost of such Note to such US holder. If
a US holder uses foreign currency to purchase a Note, the cost of the Note will be the US dollar value of the
foreign currency purchase price on the date of purchase. In the case of a Note that is traded on an established
securities market, a cash basis US holder, and, if it so elects, an accrual basis US holder, will determine the US
dollar value of the cost of such Notes by translating the amount paid at the spot rate on the settlement date of the
purchase. The conversion of US dollars to a foreign currency and the immediate use of that currency to purchase
a Note generally will not result in taxable gain or loss for a US holder.
The special election available to accrual basis US holders in regard to the purchase and sale of Notes
traded on an established securities market, which is discussed in the two preceding paragraphs, must be applied
consistently by a US holder to all debt instruments from year to year and cannot be changed without the consent
of the IRS.
Gain or loss recognized by a US holder upon disposition of a Note generally will be US source gain or
loss and, except as discussed below with respect to exchange gain or loss, generally will be capital gain or loss
and will be long-term capital gain or loss if at the time of the sale, exchange, redemption or other taxable
disposition the Note has been held by such US holder for more than one year. Long-term capital gain recognized
by a non-corporate US holder generally will be subject to taxation at a reduced rate. The deductibility of capital
losses is subject to limitation.
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Foreign Currency Exchange Gain or Loss
Gain or loss recognized upon the sale, exchange, redemption or other taxable disposition of a Note that is
attributable to fluctuations in currency exchange rates will be ordinary income or loss and generally will be
treated as US source income or as an offset to US source income, respectively. Gain or loss attributable to
fluctuations in exchange rates generally will equal the difference between (i) the US dollar value of the euro
principal amount (plus any unamortized bond premium remaining at the time payment is received or the Note is
disposed of) of the Note determined on the date payment is received with respect to the sale, exchange,
redemption or other taxable disposition of the Note, and (ii) the US dollar value of the euro principal amount
(plus any unamortized bond premium remaining at the time payment is received or the Note is disposed of) of the
Note, determined on the date the US holder acquired such Note. In addition, upon the sale, exchange, retirement
or other taxable disposition of a Note, an accrual method US holder may realize exchange gain or loss
attributable to amounts received in respect of accrued and unpaid interest. Any such exchange gain or loss with
respect to accrued interest will be determined in the same manner as discussed under “— Payments of Interest”.
However, upon a sale, exchange, retirement or other taxable disposition of a Note, a US holder will realize
exchange gain or loss with respect to principal and accrued interest only to the extent of the total gain or loss
realized on the disposition. Prospective investors should consult their own tax advisors with respect to the
treatment of exchange gains and losses.
Tax Return Disclosure Requirement

Treasury regulations that apply to “reportable transactions” require the reporting of certain transactions
to the IRS based on any of several indicia, including the recognition of foreign currency and certain other losses
in excess of a threshold amount. US holders are advised to consult their tax advisors regarding these rules,
including any requirement to file IRS Form 8886 (Reportable Transaction Disclosure Statement).
Information Reporting and Backup Withholding

In general, a US holder may be subject to US federal backup withholding tax at the applicable rate
(currently 28%) with respect to payments on the Notes and the proceeds of a sale or other disposition of the
Notes that are made in the United States or through certain US-related financial intermediaries, if the US holder
fails to provide its taxpayer identification number to the paying agent and to comply with certain certification
procedures or otherwise establish an exemption from backup withholding. In addition, such payments to, and the
proceeds of a sale or other disposition by, a US holder that is not a US corporation or other exempt entity may be
subject to information reporting requirements. Backup withholding is not an additional tax. The amount of any
backup withholding from a payment to a US holder will be allowed as a credit against the holder’s US federal
income tax liability and may entitle such US holder to a refund, provided the required information is furnished to
the IRS in a timely manner.
A payment to a non-US holder made within the United States or by a US payor or US middleman
generally will not be subject to US information reporting or backup withholding tax if the applicable holder has
submitted a certification of non-US status.
THE ABOVE DISCUSSION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS
OF ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP OF THE NOTES.
PROSPECTIVE PURCHASERS OF THE NOTES SHOULD CONSULT THEIR OWN TAX ADVISERS
CONCERNING THE TAX CONSEQUENCES OF THEIR PARTICULAR SITUATIONS.
Polish taxation
General tax information
The following discussion is a summary of material Polish income tax and transfer tax consequences of the
purchase, ownership and disposition of the Notes by Polish residents and in some aspects also foreign residents,
but does not purport to be a complete analysis of all potential tax considerations relevant to a decision to
purchase the Notes. Potential purchasers of the Notes are recommended to seek advice from a tax or legal
advisor. The information below is subject to the additional reservation that it is based exclusively on the laws in
force on January 4, 2007.
Tax treatment of income related to holding of the Notes

Polish tax residents
Residents other than individuals
Interest and discounts on bonds obtained by entities with their registered office and/or management in the
Republic of Poland, and which are incorporated entities, capital companies in the process of incorporation, or any
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other unincorporated organization (other than civil law partnerships, general partnerships, professional
partnerships, limited liability partnerships and partnerships limited by shares), shall be taxed under the Corporate
Income Tax (“CIT”) Act together with all other income earned by the taxpayer in a given tax year, and shall be
subject to the basic tax rate of 19%. The CIT Act contains some specific rules of taxation of interest, e.g. interest
is not recognized as income as long as it is not received, even if due.
Individuals
Pursuant to Art. 30a of the Polish Individuals Income Tax (“PIT”) Act, a flat 19% tax rate is applied to
income earned from interest and/or discounts on securities, regardless of the territory in which it has been
generated. The income is not reduced by the cost of generating such income.
Income taxed pursuant to Art. 30a of the PIT Act is not amalgamated with other income taxable pursuant
to general rules, which is subject to the progressive tax rates referred to in Art. 27 of the PIT Act.
Payment of tax by individuals

As a rule, pursuant to Art. 41 Section 4 of the PIT Act, tax on income taxed in accordance with Art. 30a
of the PIT Act is collected by a tax remitter, i.e. a natural person, legal person or a non-corporate organization
that pays or makes available to the taxpayer money or pecuniary values earned as income taxed at a flat-rate tax.
The tax remitter is responsible for calculating, collecting and paying the tax withheld. The taxpayer shall not
disclose the tax collected pursuant to the above in its annual tax return.
However, income generated in relation to holding the Notes should be considered as income generated
abroad, as it is paid by the Issuer, which has its registered office outside Poland. As to income taxed pursuant to
Art. 30a of the PIT Act generated abroad, unlike income generated in Poland, the tax is disclosed by the
taxpayers in their annual tax returns (Art. 30a Section 11 of the PIT Act). This view is corroborated in Art. 45
Section 3 b of the PIT Act, which requires that such income should be disclosed in the taxpayer’s annual tax
return, unless income tax is collected by a tax remitter. It appears that a situation in which income is generated
abroad is a situation in which the tax remitter will not withhold tax (or foreign residents would need to act as tax
remitters). Therefore, the regulations described seem to be intended to impose the obligation to pay the tax
directly on the taxpayer, without the intermediary of the tax remitter. However, we are familiar with an
interpretation of the certain local tax offices that if the income generated abroad is paid to the taxpayer through
intermediation of a Polish entity, e.g. a Polish broker, this Polish intermediary should withhold tax as a tax
remitter. According to this interpretation, only if there is no intermediary in Poland, the tax is accounted for
directly by the taxpayer. If this interpretation prevails there will be an obligation to withhold the tax by the Polish
intermediaries participating in the payments of interest from the Notes.
With respect to income generated on holding the Notes, taxpayers may be required to pay advances over
the course of the tax year. This results from the provisions of Art. 40 of the PIT Act, referred to here as “the
advance tax payment rules”. Under these rules, if the taxpayers referred to in Arts. 31, 33, 34, and 35 of the same
Act (including mainly taxpayers earning their income from employment or pensions) also obtain other income
from which tax remitters are not required to remit applicable advances for income tax, in such event the
taxpayers are required to pay tax advances in respect of such income in accordance with the rules set forth in Art.
44 Section 3a of the PIT Act. Under the advance tax payment rules, monthly tax advances shall be made at the
rate of 19% for any month in which income is earned by the 20th day of the month following the month in which
the tax is due, and, in respect of December, within the deadline applicable to the filing of annual income tax
returns. However, the relevance and the scope of the advance tax payment rules are not entirely clear; therefore,
it is recommended that advice be sought from a tax or legal advisor. It is additionally worth noting that, apart
from advance tax payment rules described herein, no other regulations exist that might potentially require the
purchasers of the Notes to personally make advance payments on income tax payable in respect of income earned
by the holders of the Polish Notes.
Taxation of income earned in relation to transfer of the Notes in the secondary market
Polish tax residents
Residents other than individuals
Income earned from the transfer of the Notes by entities with their registered office and/or management in
Poland and which are incorporated entities, capital companies in the process of incorporation, or any other
unincorporated organization (other than civil law partnerships, general partnerships, professional partnerships,
limited liability partnerships and partnerships limited by shares) shall be taxed according to general tax rules
under the CIT Act. In particular, such income, together with all other income earned by the taxpayer in a given
tax year, shall be subject to the basic tax rate of 19% under Art. 19 Section 1 of the CIT Act.
174
Individuals
The PIT Act (Art. 30b) provides for a flat 19% rate being applied to income earned from the transfer of
the Notes, wherever such income has been generated. However, Art. 30b shall not apply if a transfer of the Notes
is effected as part of business activities operated by the taxpayer.
Calculation of income and payment of tax by individuals

The revenue amount to be used in calculating the income amount shall be the value of the Notes
expressed as the price in the agreement decreased by the costs incurred in relation to the transfer of the Notes
against consideration. Expenses related to the acquisition of the Notes shall be treated as costs of gaining the
revenue and shall be deducted from the revenue amount. In the case of individuals whose income from a transfer
of the Notes shall be subject to a flat-rate tax of 19%, the income amount shall be calculated as the difference
between the revenue amount obtained (being the aggregate value of the Notes according to the respective
agreement decreased by the costs incurred in relation to the transfer), and the tax deductible costs, meaning the
expenses incurred in relation to acquiring the Notes. However, it should be noted that in the event of a substantial
difference between the value expressed as the price stated in an agreement regarding a transfer of the Notes
against consideration, and the market value of such Notes, the tax authorities may raise objections concerning
such price.
A taxpayer shall be required to file a separate income tax return at the end of a given tax year in order to
account for the income obtained from the transfer of securities against consideration, and to calculate the tax due
thereon (it is worth noting that revenue means revenue which is due and payable to such taxpayer, even if the amount
has not actually been received, which may have an impact on income calculation). However, the tax remitter shall not
be required to collect tax or to remit tax advances against income tax in the course of the fiscal year.
Foreign residents
Foreign holders of the Notes (i.e. entities that do not have their registered office (management) in Poland
or individuals without domicile in Poland) will be subject to tax obligations in Poland regarding a transfer of the
Notes solely in respect of income earned in Poland (Art. 3 Section 2a of the PIT Act and Art. 3 Section 2 of the
CIT Act). As an example, income from sales of the Notes on the Polish regulated market) will be treated as
income earned in Poland. However, apart from Polish domestic legislation, the tax regulations applicable to
foreign residents will follow from the respective double taxation treaties entered into by Poland. Double taxation
treaties typically stipulate that gains from the sale of securities may be taxed solely in the country in which the
seller has its domicile or registered office (or the place where its management is conducted).
Transfer tax (tax on civil law transactions)

Transfer tax (tax on civil law transactions) applies to the sale or exchange of securities, if the rights
attached to the securities are to be performed in Poland, or if the securities are performed outside Poland, but the
agreement evidencing the sale or exchange is concluded in Poland and the purchaser is a Polish resident. The rate
of this tax is 1% of the market value of the Notes. In certain situations, the tax authorities may adjust the taxable
base. The tax should be paid within 14 days after the transaction is concluded.
Withholding tax on payments under the Guarantees

Polish withholding tax will apply to payments by the Guarantors under the Guarantees of principal or
interest in respect of the Notes. The amount of withholding tax will depend on the tax residency of the holders of
the Notes and the tax qualification of payments by the Guarantors as determined by the Polish tax authorities.
French taxation
The Notes being issued in euros by a French legal entity are deemed to be issued outside the Republic of
France for the purposes of Article 131 quater. Interest and other revenues with respect to the Notes paid to
non-French residents benefit therefore from exemption from the withholding tax provided for in Article 125 A III
of the French General Tax Code.
A Noteholder will not be subject to French taxes on capital gains with respect to any gains realized on the
disposal of the Notes provided that such Noteholder is neither domiciled in the Republic of France nor deemed to
be resident, established or carrying on an activity in the Republic of France for French tax purposes.
EU savings directive
Under EC Council Directive 2003/48/EC (“the Directive”) regarding the taxation of savings income, each
Member State is required since 1st July 2005, to provide to the tax authorities of another Member State details of
175
payments of interest or other similar income within the meaning of the Directive (i.e. interests, products,
premiums or other debt income) paid by a person within its jurisdiction to, or collected by such a person for, an
individual resident in that other Member State.
For these purposes, the term “paying agent” is widely defined and includes in particular any economic
operator who is responsible for making interest payments, within the meaning of the Directive, for the immediate
benefit of individuals.
However, for a transitional period, certain Member States (Austria, Belgium and Luxembourg) may
instead of disclosing this information apply a withholding system in relation to such payments deducting tax on
interest on other similar incomes at rates rising over time to 35%. The rate of such withholding tax equals 15%
during the first three years, 20% during the subsequent three years and 35% until the end of the transitional
period. Such transitional period will end at the end of the first full fiscal year following the later of (i) the date of
entry into force of an agreement between the European Community, following a unanimous decision of the
European Council, and the last of several jurisdictions (Switzerland, Liechtenstein, San Marino, Monaco and
Andorra), providing for the exchange of information upon request as defined in the above mentioned OECD
Model Agreement on Exchange of Information on Tax Matters released on 18th April 2002 with respect to
interest payments within the meaning of the Directive, in addition to the simultaneous application by those same
jurisdictions of a withholding tax on such payments at the rates defined for the corresponding periods and (ii) the
date on which the European Council unanimously agrees that the United States of America is committed to
exchange of information upon request as defined in the above mentioned OECD Model Agreement with respect
to interest payments within the meaning of the Directive.
Since 1st July 2005 a number of non-EU countries, and certain dependant or associated territories of
certain Member States have agreed to adopt similar measures (either exchange of information or transitional
withholding) in relation to payments made by a person within its jurisdiction to, or collected by such a person for
an individual resident in a Member State.
The directive was implemented into French law under Article 242 ter of the French General Tax Code)
which imposes on paying agents based in France an obligation to report to the French tax authorities certain
information with respect to interest payments made to the beneficial owner and a detailed list of the different
categories of interest paid to that beneficial owner. These reporting obligations, as described under sections 49 I
ter to 49 I sexies of Schedule III to the French Tax Code, entered into force with respect to interest payments
made on or after 1st July 2005, but paying agents were required to identify the beneficial owners of such
payments as from 1st January 2004.
176
LEGAL MATTERS
Certain legal matters in connection with the offering of the Notes will be passed upon for us by Dewey
Ballantine LLP, as to matters of US federal, New York and Polish law, certain legal matters relating to French
law will be passed upon for us by Orrick Rambaud Martel and certain legal matters relating to Austrian law by
Wolf Theiss. Certain legal matters in connection with the offering of the Notes will be passed upon for the Initial
Purchaser by White & Case LLP as to matters of US federal, New York, Polish and French law and by Binder
Grösswang as to matters of Austrian law.
INDEPENDENT REPORTING AUDITORS

Our consolidated financial statements for the years ended December 31, 2005 and 2004, prepared in
accordance with IFRS included in this Offering Memorandum, have been reported on by KPMG Audit Sp. z o.o.,
independent auditors, as stated in their reports appearing herein.
The consolidated financial statements of voestalpine Stahlhandel GmbH for the fiscal year ended
March 31, 2006, prepared in accordance with IFRS and included in this Offering Memorandum, have been
reported on by Grant Thornton, independent auditors, as stated in their report appearing herein.
The financial statements of Huta Stalowa Wola–Huta Stali Jakościowych Sp. z o.o. and Huta Stalowa
Wola–Walcownia Blach Sp. z o.o. for the year ended December 31, 2005, prepared in accordance with Polish
GAAP and included in this Offering Memorandum, have been reported on by Doradca, independent auditors, as
stated in their reports appearing herein.
WHERE YOU CAN FIND MORE INFORMATION

Each purchaser of the notes from the Initial Purchaser will be furnished with a copy of this Offering
Memorandum and any related amendments or supplements to this Offering Memorandum. Each person receiving
this Offering Memorandum and any related amendments or supplements to the Offering Memorandum
acknowledges that:
(1) such person has been afforded an opportunity to request from us, and to review and has received
all additional information considered by it to be necessary to verify the accuracy and completeness
of the information herein;
(2) such person has not relied on the initial purchaser or any person affiliated with the initial
purchaser in connection with its investigation of the accuracy of such information or its
investment decision; and
(3) except as provided pursuant to (1) above, no person has been authorized to give any information
or to make any representation concerning the notes offered hereby other than those contained
herein and, if given or made, such other information or representations should not be relied upon
as having been authorized by us or the Initial Purchaser.
For so long as any of the notes are “restricted securities” within the meaning of Rule 144(a)(3) under the
US Securities Act, we will, during any period in which we are neither subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, nor exempt from the reporting requirements under Rule 12g3-2(b) of
the Exchange Act, provide to the holder or beneficial owner of such restricted securities or to any prospective
purchaser of such restricted securities designated by such holder or beneficial owner, in each case upon the
written request of such holder, beneficial owner or prospective purchaser, the information required to be
provided by Rule 144A(d)(4) under the US Securities Act.
We are not currently subject to the periodic reporting and other information requirements of the Exchange
Act. However, pursuant to the Indenture governing the Notes and so long as the Notes are outstanding, we will
furnish periodic information to holders of the Notes. See “Description of the Notes—Certain Covenants—
Reports to Holders”.
177
LISTING AND GENERAL INFORMATION
Listing
Application has been made to the Luxembourg Stock Exchange for the Notes to be listed on to the
Official List of the Luxembourg Stock Exchange and traded on the Euro MTF Market.
Luxembourg listing information

Copies of the following documents will be available free of charge during usual business hours at the
principal executive offices of the Issuer, as well as at the registered offices of the Luxembourg Paying Agent for
so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and traded on the Euro
MTF market:
(i) the statuts (by-laws) of the Issuer;
(ii) the by-laws of the Company;
(iii) the financial statements included in this Offering Memorandum;
(iv) the most recent financial statements of the Issuer, the Company and each Subsidiary Guarantor;
(v) any interim financial statements or accounts of the Issuer, to the extent available;
(vi) the following documents:
(a) the Indenture governing the Notes; and
(b) the Share Pledges;
(vii) the Purchase Agreement relating to the Notes; and
(viii) the incorporation documents of the Subsidiary Guarantors.
In connection with the issuance of the Notes, the Issuer will prepare unaudited quarterly financial
statements starting with the quarter ending March 31, 2007. The Issuer will thereafter publish quarterly and
annual financial statements and make them available to the public.
For so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and traded on
the Euro MTF market, the Issuer will notify the Luxembourg Stock Exchange in the event of a change in the
Luxembourg Paying Agent or Transfer Agent for the Notes. The Issuer has appointed The Bank of New York
(Luxembourg) S.A. as Luxembourg Paying Agent and The Bank of New York as Principal Paying Agent to
make payments on, and transfers of, the Notes. The Issuer reserves the right to vary such appointment.
The Issuer and the Company each accept responsibility for the information contained in this Offering
Memorandum. To the best of our knowledge, except as otherwise noted, the information contained in this Offering
Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such
information. This Offering Memorandum may only be used for the purposes for which it has been published.
Clearing Information
The Notes have been accepted for clearance and settlement through Euroclear and Clearstream. The
Notes have been accorded the following common codes and international securities identification numbers
(ISINs):
Š for the Notes sold pursuant to Regulation S the common code is 028339399 and the ISIN is
XS0283393998;
Š for the Notes sold pursuant to Rule 144A the common code is 028339453 and the ISIN is
XS0283394533;
Legal Information
The Issuer was incorporated as a société anonyme incorporated under the laws of the Republic of France.
The Issuer’s legal and commercial name is Zlomrex International Finance S.A. Its executive office is registered
at 48, boulevard des Coquibus, BP-97, 91003 Evry, France, and it is registered with the Registre du commerce et
des sociétés of Evry under number 492 535 737. It is a wholly-owned (other than a small number of directors’
qualifying shares) subsidiary of the Company.
The amount of the issued share capital of the Issuer is €225,000. There is one class of shares – 225,000
ordinary shares with a nominal value of €1 per share. The share capital has been paid in full.
178
The Issuer has three directors (members of the board): Mr Przemysław Sztuczkowski (also chairman
(président du conseil d’administration) and managing director (directeur général)), Mr. Przemysław Grzesiak
and Mr. Krzysztof Walarowski.
The Issuer anticipates also appointing three additional directors in the future: Mr. Krzysztof Zoła, Mrs.
Barbara Grzesiak and Mrs. Anita Sztuczkowska.
The Company was originally incorporated on June 14, 2004. The Company is organized under the
Republic of Poland. The Company’s legal and commercial name is Złomrex S.A. The Company is registered
with the Registry of Commerce and Companies of Cze˛stochowa under number 0000211496. Its registered office
is located at Poraj, ul. Zielona 26. The Company’s telephone number is +48 (34) 3160125.
According to an excerpt from the register of entrepreneurs dated January 2, 2007, Złomrex S.A.’s total
share capital is PLN 47,691,000 and is divided into 47,691,000 ordinary bearer shares with a nominal value of
PLN 1.00 per share (47,690,000 non-preferred Series A Shares and 1,000 non-preferred Series B Shares). The
share capital has been paid in full. Mr. Przemysław Sztuczkowski is the sole shareholder of Złomrex.
179
Subsidiary Guarantor Information
The following table set forth a list of the Subsidiary Guarantors, each of which is wholly owned, their
respective name, date of incorporation, address of registered office, company number and primary activities:
Address of Registered Company

Name Date of Incorporation Office Number Primary Activities
Odlewnia Metali Szopienice
Sp. z o.o. . . . . . . . . . . . . . . . . . . January 23, 2002 Katowice, ul. Ks. 0000082395 Manufactures
Majora Karola finished products
Woźniaka 24 and semi-finished
products composed
of non-ferrous metal
alloys.
Zakład Walcowniczy —
Walcownia Bruzdowa March 19, 2002 Zawiercie, ul. 0000098737 Manufactures plant
Sp. z o.o. . . . . . . . . . . . . . . . . . . Okólna 10 rolls/mills steel
billets into finished
products; production
of smooth rods and
plain and reinforced
bars made of carbon
steel.
HSW-Huta Stali November 2, 2006 Stalowa Wola ul. 0000266647 Produces quality
Jakościowych S.A. . . . . . . . . . . Kwiatkowskiego 1 (high alloy) steel and
long hot-rolled
products (bars) made
from carbon steel
and high alloy steel
as well as hot-rolled
sheets from carbon
steel, high alloy steel
and special purpose
steel.
Ferrostal Łabe˛dy Sp. z o.o. . . July 29, 1993 Gliwice, ul. 0000086806 Produces semi-
Zawadzkiego 26 finished products in
the form of steel
billets and finished
steel products.
Złomrex Zbrojarnia Sp. z o.o. July 19, 2006 Zawiercie, ul. 0000260710 Service center for
.......................... Okólna 10 production of
prefabricated,
customized
construction industry
elements from
concrete steel for use
in the construction
of foundations,
floors, heads and
other building
components.
Złomrex S.A. . . . . . . . . . . . . . . June 14, 2004 Poraj, 0000211496 Produces
ul. Zielona 26 metallurgical
products, including
round and square
bars; non-ferrous
products; and
various steel
products.
180
Odlewnia Metali Szopienice Sp. z o.o.
Odlewnia Metali Szopienice Sp. z o.o. is a Polish limited liability company incorporated under Polish law
under the KRS registration number 0000082395. As of December 2006, it had a share capital of PLN 50,000.00
divided into 100 shares. The company’s registered office is Katowice, ul. Ks. Majora Karola Woźniaka 24. There
are two members of the Management Board: Henryk Składaniec — President of the Management Board and
Radosław Kirsz — Vice - President of the Management Board. The company is represented by the President of
the Management Board acting individually, two members of the Management Board acting jointly or one
member of the Management Board acting jointly with a holder of a proxy. The company primarily manufactures
finished products and semi-finished products composed of non-ferrous metal alloys.
Zakład Walcowniczy — Walcownia Bruzdowa Sp. z o.o.

Zakład Walcowniczy — Walcownia Bruzdowa Sp. z o.o. is a Polish limited liability company
incorporated under the Polish law under the KRS registration number 0000098737. As of December 2006, it had
a share capital of PLN 9,550,000.00 divided into 19,100 shares. The company’s registered office is Zawiercie, ul.
Okólna 10. There are two members of the Management Board: Krzysztof Liwoch — President of the
Management Board and Dorota Paś — member of the Management Board. The company is represented by the
President of the Management Board acting individually. The company primarily manufactures plant rolls/mills
steel billets into finished products, produces smooth rods and plain and reinforced bars made of carbon steel.
HSW-Huta Stali Jakościowych S.A.

HSW-Huta Stali Jakościowych S.A. is Polish joint-stock company organized under Polish law under the
KRS registration number 0000266647. As of December 2006, it had a share capital of PLN 137,376,700.00
divided into 137,376,700 shares. The company’s registered office is 37-450 Stalowa Wola, ul.
Kwiatkowskiego 1. There are 3 members of the Management Board: Wincenty Likus, Wojciech Maj, Andrzej
Jȩdruch. The company is represented by two members of the Management Board. The company primarily
produces quality (high alloy) steel and long hot-rolled products (bars) made from carbon steel and high allow
steel as well as hot-rolled sheets from carbon steel, high alloy steel and special purpose steel.
Ferrostal Łabe˛dy Sp. z o.o.

Ferrostal Łabe˛dy Sp. z o.o. is a Polish limited liability company incorporated under the Polish law, under
the KRS registration number 0000086806. As of December 2006, it had a share capital of PLN 177,760,000.00.
The company’s registered office is Gliwice, ul. Zawadzkiego 26. There are three members of the Management
Board: Henryk Odoj — President of the Management Board, Krystian Gunia — member of the Management
Board and Ryszard Giemza — Vice-President of the Management Board. The company is represented by either
two members of the Management Board acting jointly or one member of the Management Board acting jointly
with a holder of a proxy. The company primarily produces semi-finished products in the form of steel billets and
finished steel products.
Złomrex Zbrojarnia Sp. z o.o.

Złomrex Zbrojarnia Sp. z o.o. is a Polish limited liability company incorporated under the Polish law,
under the KRS registration number 0000260710. As of December 2006, it had a share capital of PLN 50,000.00
divided into 50 shares. The company’s registered office is in Zawiercie, ul. Okólna 10. There is one member of
the Management Board: Adam Kuziorowicz — President of the Management Board. The company is represented
by the President or Vice-President of the Management Board acting individually or a member of the
Management Board acting jointly with another member of the Management Board or with a holder of a proxy.
The company is a service centre for production of prefabricated, customized construction industry elements from
concrete steel for use in the construction of foundations, floors, heads and other building components.
Złomrex S.A.
Złomrex S.A is a joint-stock company incorporated under the Polish law under the KRS registration
number 000211496. As of December 2006, it had a share capital of PLN 47 691 000,00 divided into 47691000
shares with the nominal value of PLN 1. The company’s registered office is in Poraj, ul. Zlielona 26. There are
three members of the Management Board: Przemysław Sztuczkowski — the President; Przemysław Grzesiak —
the Vice-President; Krzystof Walarowski — the member of the Management Board. The company is represented
either by the President or the Vice-President of the Management Board individually, the member of the
Management Board acting jointly with a holder of proxy or two members of the Management Board acting
jointly. The company primarily produces wide range of metallurgical products, including plain and reinforced
bars, rounds roll bars, square and flat bars as well as non-ferrous products.
181
Non-guarantor subsidiaries
The non-guarantor subsidiaries account for approximately 11% of the revenues, approximately 9% of the
gross profit and none of the net profit of the Group.
Auditors
The Issuer anticipates preparing financial statements starting with the year ending December 31, 2006.
The consolidated financial statements of the Company and its subsidiaries as of and for the year ended
December 31, 2005 and 2004 included in this Offering Memorandum have been audited by KPMG Audit Sp. z
o.o., the statutory auditors of the Company, as stated in their report appearing herein.
Because the Issuer was registered on October 23, 2006, no financial statements for the year ended
December 31, 2005 in respect of the Issuer are available.
Corporate Authorization
The issue of the Notes and the execution of the Indenture and the other documents to be entered into in
connection with the Offering are to be approved by the ordinary general meeting of the shareholders of the Issuer
to be held on January 26, 2007 and are to be decided on January 26, 2007 by the board of directors of the Issuer
in accordance with its articles of association, after having an independent appraiser appointed by the Tribunal de
Commerce of Evry carry out a verification of the assets and liabilities (vérification de l’actif et du passif) in
accordance with article L.228-39 of the Code of commerce.
No Material Adverse Change

Except as disclosed in this Offering Memorandum, there has been no material adverse change in the
Issuer’s financial position or prospects since October 23, 2006 or the Company’s financial position or prospects
since September 30, 2006.
Litigation
Except as disclosed in this Offering Memorandum, neither the Issuer, the Company nor any of the
Subsidiary Guarantors is involved in, and have no knowledge of any threatened litigation, administrative
proceedings or arbitration which would have a material adverse impact on its results of operations or financial
condition.
182
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Złomrex S.A. Page
Unaudited Interim Condensed Consolidated Financial Statements for the nine months ended
30 September 2006
Condensed consolidated interim income statement for the nine months ended 30 September 2006 . . . . . . F-3
Condensed consolidated interim balance sheet as at 30 September 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Condensed consolidated interim statement of cash flows for the nine months ended 30 September
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Condensed consolidated interim statement of changes in equity for the nine months ended 30 September
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Explanatory notes to the condensed consolidated interim financial statements . . . . . . . . . . . . . . . . . . . . . . F-7
Audited Consolidated Financial Statements for years ended 31 December 2005 and 2004
Report of the Independent Auditor with respect to the Consolidated Financial Statements for the year
ended 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-18
Special Report of the Independent Auditor with respect to the Consolidated Financial Statements for the
year ended 31 December 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-19
Consolidated income statements for the years ended 31 December 2005 and 2004 . . . . . . . . . . . . . . . . . . . F-20
Consolidated balance sheets as at 31 December 2005 and 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-21
Consolidated statements of cash flows for the years ended 31 December 2005 and 2004 . . . . . . . . . . . . . . F-22
Consolidated statements of changes in equity for the years ended 31 December 2005 and 2004 . . . . . . . . F-23
Explanatory notes to the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-24
Pro Forma Financial Information for the year ended 31 December 2005 and for the nine months
ended 30 September 2006
Assurance Report on Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-61
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-63
Pro forma financial information as at and for the year ended 31 December 2005 . . . . . . . . . . . . . . . . . . . . F-68
Pro forma financial information as at and for the nine month period ended 30 September 2006 . . . . . . . . . F-71
Pro Forma Income Statement for the twelve months ended 30 September 2006 . . . . . . . . . . . . . . . . . F-75
Unaudited Interim Consolidated Financial Statements for the six months ended 30 September
2006
Condensed consolidated interim income statement for the six months ended 30 September 2006 . . . . . . . F-77
Consolidated interim balance sheet as at 30 September 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-78
Consolidated interim statement of cash flow for the six months ended 30 September 2006 . . . . . . . . . . . . F-79
Consolidated interim statement of changes in equity for the six months ended 30 September 2006 . . . . . . F-80
Interim key figures as of and for the six months ended 30 September 2006 . . . . . . . . . . . . . . . . . . . . . . . . F-81
Notes to the consolidated financial statements for the six months ended 30 September 2006 . . . . . . . . . . . F-82
Audited Consolidated Financial Statements for the year ended 31 March 2006
Independent Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-90
Consolidated income statement for the years ended 31 March 2006 and 2005 . . . . . . . . . . . . . . . . . . . . . . F-91
Consolidated balance sheet as at 31 March 2006 and 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-92
Consolidated statements of cash flow for the year ended 31 March 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . F-93
Consolidated statements of change in equity for the year ended 31 March 2006 . . . . . . . . . . . . . . . . . . . . . F-94
Key figures as of and for the years ended 31 March 2006 and 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-95
Notes to the consolidated financial statements for the six months ended 31 March 2006 and 2005 . . . . . . F-96
Unaudited Summary Financial Statements for the nine months ended 30 September 2006 and the
twelve months ended 31 December 2005
Consolidated summary of income statement for the nine months ended 30 September 2006 and the
twelve months ended 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-113
Consolidated summary balance sheet as at 30 September 2005, 31 December 2005 and 30 September
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-114
HSW — Huta Stali Jakościowych Sp. z o.o.
Audited Financial Statements for the year ended 31 December 2005
Report of Independent Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-117
Report supplementing the Opinion on the Audit of the Financial Statements of a limited liability
company HSW — Huta Stali Jakościowych Spółka z o.o. in Stalowa Wola for 2005 . . . . . . . . . . . . . . . F-119
HSW — Walcownia Blach Spółka z o.o.
Audited Financial Statements for the year ended 31 December 2005
Report of Independent Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-144
Report supplementing the opinion on the Audit of the Financial Statements of a limited liability
company HSW — Walcownia Blach Spółka z o.o. in Stalowa Wola for 2005 . . . . . . . . . . . . . . . . . . . . F-146
F-1
Unaudited Interim Condensed
Consolidated Financial Statements
for the nine months ended
30 September 2006 of Złomrex S.A.
F-2
ZŁOMREX S.A.
For the nine months ended 30 September 2006
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
in PLN thousand Note 2006 2005
(unaudited) (unaudited)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1 416 970 737 696
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 228 584) (671 457)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 386 66 239
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 662 1 645
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21 545) (10 702)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52 763) (29 709)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6 992) (2 728)
Operating profit before financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 748 24 745
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 332 2 584
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25 219) (16 415)
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19 887) (13 831)
Excess of the interest in the net fair value of identifiable assets, liabilities and
contingent liabilities acquired over cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 894 —
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 755 10 914
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (18 887) (2 131)
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 868 8 783
Attributable to:
Equity holders of the parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 129 7 480
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 739 1 303
Basic earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.58 0.16
Diluted earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.58 0.16
The condensed consolidated interim income statement should be read in conjunction with the explanatory notes
constituting part of the condensed consolidated interim financial statements
F-3
ZŁOMREX S.A.
As at 30 September 2006
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
30 September 31 December
(unaudited)
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 443 671 269 011
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 28 668 19 953
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 978 603
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 787 3 508
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 173 2 473
Prepaid perpetual usufruct of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 104 11 959
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 768 10 845
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 149 318 352
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255 780 103 632
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 476 1 976
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 361 153 798
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 576 14 623
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 874 —
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624 067 274 029
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 138 216 592 381
Equity
Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 691 47 691
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 621 86 995
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 994 144 473
Total equity attributable to equity holders of the parent . . . . . . . . . . . . 354 306 279 159
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 982 15 821
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 288 294 980
Liabilities
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 12 142 793 52 653
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 407 1 432
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 314 —
Deferred government grants and other deferred income . . . . . . . . . . . . 1 614 606
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 128 54 691
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 958 29 141
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 12 237 187 129 194
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 1 320
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 765 184
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 322 1 065
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988 708
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 577 80 793
Deferred government grants and other deferred income . . . . . . . . . . . . 1 755 305
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557 800 242 710
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 928 297 401
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 138 216 592 381
The condensed consolidated interim balance sheet should be read in conjunction with the explanatory notes
constituting part of the condensed consolidated interim financial statements
F-4
ZŁOMREX S.A.
For the nine months ended 30 September 2006
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
(unaudited) (unaudited)
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 755 10 914
Adjustments
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 279 16 035
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 298 588
Impairment losses and valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . 83 1 408
Foreign exchange (gains)/losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 (823)
Net gain on disposal of property, plant and equipment . . . . . . . . . . . . . . . . (246) (307)
Interest and dividends, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 882 11 248
Change in trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63 760) (28 995)
Change in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63 853) 28 186
Change in trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 911 (4 557)
Change in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 (954)
Change in employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 602 (154)
Change in deferred government grants and other deferred income . . . . . . . 2 458 1 094
Change in emission rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 209 —
Excess of the interest in the net fair value of identifiable assets, liabilities
and contingent liabilities acquired over cost . . . . . . . . . . . . . . . . . . . . . . (5 894)
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (742) 68
Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 684 33 751
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16 751) (3 096)
Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 933 30 655
Cash flows from investing activities
Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . 761 876
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 635 2 334
Change in loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (402) 496
Acquisition of subsidiary, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . (192 267) (14 436)
Acquisition of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . (20 599) (15 653)
Acquisition of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70) (439)
Prepayment for perpetual usufruct of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6 394) (1 314)
Acquisition of other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60) —
Net cash from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (216 396) (28 136)
Cash flows from financing activities
Receipt of interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . 168 036 52 184
Receipts/(payments) in relation to derivative financial instruments . . . . . . . . . . (208) 342
Payment of finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6 377) (6 711)
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19 852) (15 146)
Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 599 30 669
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 136 33 188
Cash and cash equivalents net of bank overdraft, at 1 January . . . . . . . . . . . . . . (14 518) (31 117)
Cash and cash equivalents net of bank overdraft, at 30 September . . . . . . . (13 382) 2 071
The condensed consolidated interim statement of cash flows should be read in conjunction with the explanatory
notes constituting part of the condensed consolidated interim financial statements
F-5
ZŁOMREX S.A.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the parent
Issued Retained Minority
in PLN thousand capital Reserves earnings Total interest Total equity
Equity as at 1 January 2005 . . . . . . . . . . . . . . . 47 691 13 829 202 335 263 855 13 965 277 820
Transfer of profit . . . . . . . . . . . . . . . . . . . . . . . . . — 73 166 (73 166) — — —
Shares issued to the minority shareholders of
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 291 291
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . — — 7 480 7 480 1 303 8 783
Equity as at 30 September 2005 (unaudited) . . 47 691 86 995 136 649 271 335 15 559 286 894
Equity as at 1 January 2006 . . . . . . . . . . . . . . . 47 691 86 995 144 473 279 159 15 821 294 980
Transfer of profit . . . . . . . . . . . . . . . . . . . . . . . . . — 8 608 (8 608) — — —
Minority interest at subsidiaries’ acquisition
date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 17 422 17 422
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 18 — 18 — 18
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . — — 75 129 75 129 1 739 76 868
Equity as at 30 September 2006 (unaudited) . . 47 691 95 621 210 994 354 306 34 982 389 288
The condensed consolidated interim statement of changes in equity should be read in conjunction with the
explanatory notes constituting part of the condensed consolidated interim financial statements
F-6
ZŁOMREX S.A.
(in PLN thousand, unless stated otherwise)
EXPLANATORY NOTES TO THE CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
1. Reporting entity
Złomrex S.A. (the “Company”) is a company domiciled in Poland. The condensed consolidated interim
financial statements of the Company as at and for the nine months ended 30 September 2006 comprise the
Company and its subsidiaries (together referred to as the “Group”). The basic information about the subsidiaries,
that comprise the Group as at 30 September 2006, is presented in the table below.
Ownership interest Date of obtaining
Name of the entity Seat of entity Core activities and voting rights control
Odlewnia Metali Manufacture of non-
Szopienice Katowice, Poland ferrous metal alloy 100.0% 31 July 2004
Sp. z o.o. products
ZW — Walcownia Manufacture of metal
Zawiercie, Poland 100.0% 13 January 2005
Bruzdowa Sp. z o.o. products
Ferrostal Łabe˛dy Manufacture of metal
Gliwice, Poland 91.2% 19 February 2004
Sp. z o.o. products
ZŁomrex — Finans Poraj, Poland Financial services 100.0% 16 September 2003
Sp. z o.o.
Nowa Jakość — Purchasing, packaging,
Organizacja Odzysku reselling of paper and
Poraj, Poland 100.0% 13 June 2004
S.A. plastic waste for further
production
HSW Huta Stali Stalowa Wola, Manufacture of metal 100.0% 27 January 2006
Jakościowych Sp. z o.o. Poland products
HSW Walcownia Blach Stalowa Wola, Manufacture of metal
100.0% 27 January 2006
Sp. z o.o. Poland products
Centrostal Górnośla˛ski Katowice, Poland Trade in metal products 100.0% 7 March 2006
Sp. z o.o.
Kapitał Sp. z o.o. Cze˛stochowa,
Financial services 51.0% 4 January 2006
Poland
Złomrex China Limited Hong Kong,
Trade in metal products 100.0% 1 March 2006
China
Złomrex Pruszków Purchasing and
Pruszków, Poland 100.0% 29 March 2006
Sp. z o.o. processing of iron scrap
Złomrex Zbrojarnia Processing of metal
Sp. z o.o. products and production
Zawiercie, Poland 100.0% 15 May 2006
of construction metal
products
Centrostal Opole S.A. Opole, Poland Trade in metal products 94.0% 4 July 2006
AB Stahl AG Germany Trade in metal products 100.00% 3 August 2006
Centrostal Gdańsk S.A. Gdańsk, Poland Trade in metal products 50.44% 7 August 2006
Steelco Sp. z o.o. Gdańsk, Poland Holding company 100% 7 August 2006
2. Statement of compliance
The condensed consolidated interim financial statements have been prepared in accordance with
International Financial Reporting Standard IAS 34 Interim Financial Reporting as adopted by the European
Union. They do not include all of the information required for full annual financial statements, and should be
read in conjunction with the consolidated financial statements of the Group as at and for the year ended
31 December 2005.
F-7
ZŁOMREX S.A.
FINANCIAL STATEMENTS (CONTINUED)
2. Statement of compliance (continued)

These condensed consolidated interim financial statements were approved by the Board of Directors on
15 December 2006.
3. Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated interim financial
statements are the same as those applied by the Group in its consolidated financial statements as at and for the
year ended 31 December 2005, prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (“EU IFRS”)
4. Estimates
The preparation of interim financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, equity and
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and
other factors that are believed to be reasonable under the circumstances and the results of which form a basis for
professional judgment on carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made
by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were
the same as those applicable to the consolidated financial statements as at and for the year ended 31 December
2005.
5. Segment reporting
The Group comprises the following main business segments:
1 Scrap Metal — this segment includes the buying, processing, refining and selling of scrap metal to
the Group´s customers.
2 Semi-Finished Products — this segment includes the buying and processing of scrap metal into
steel billets and the sale of these steel billets to the Group´s customers.
3 Finished Products — this segment includes (i) the buying and processing of scrap metal into
billets which are in turn processed into finished products and sold to the Group´s customers,
(ii) the buying of steel billets from third parties and processing them into finished products and
selling them to the Group´s customers and (iii) the buying of finished products and the sale of
those products to the Group´s customers.
4 Other — this includes among others (i) the buying of non-ferrous scrap and selling it to the
Group’s customers, (ii) the processing of non-ferrous scrap into finished products and the sale of
those non-ferrous products to the Group´s customers, (iii) the buying and selling of non-ferrous
products and (iv) recycling materials, including plastic foils, paper and other products.
F-8
ZŁOMREX S.A.
5. Segment reporting (continued)

For the nine months ended 30 September
Scrap Metal Semi-Finished Products Finished Products Other Consolidated
2006 2005 2006 2005 2006 2005 2006 2005 2006 2005
Revenue from external customers . . . . . . . . . . . 168 467 136 854 220 692 180 242 765 161 292 353 262 650 128 247 1 416 970 737 696
Segment result . . . . . . . . . . . . . . . . . . . . . . . . . . 11 044 8 352 11 986 14 224 87 556 3 458 25 446 10 583 136 032 36 617
Unallocated income/expense . . . . . . . . . . . . . . . (26 248) (11 872)
Operating profit before financing costs . . . . . . . 109 748 24 745
F-9
ZŁOMREX S.A.
6. Seasonality of operations
The Group’s Finished Products segment is subject to slight seasonal fluctuations as a result of weather
conditions. In particular, the sales to construction companies are impacted negatively by winter weather
conditions, which occur primarily from November to February.
For the 12 months ended 30 September 2006 the Group generated revenue of PLN 1 655 510 thousand
(12 months ended 30 September 2005: PLN 1 031 521 thousand).
7. Assets held for sale

The prepaid perpetual usufruct of land and buildings of Centrostal Górnośla˛ski Sp. z o.o (previously
Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski) acquired in a business combination during March 2006 as
well as land, buildings and machines of Centrostal Gdańsk S.A. located in Kwidzyń are presented as assets held
for sale following the commitment of the Group’s management to a plan to sell these facilities. Efforts to sell
these assets have commenced and a sale is expected within one year from the acquisition.
8. Acquisitions of subsidiaries
Acquisition of HSW Huta Stali Jakościowych Sp. z o.o. and HSW Walcownia Blach Sp. z o.o.
On 27 January 2006, the Group acquired 100% of the shares in HSW Huta Stali Jakościowych Sp. z o.o.
and HSW Walcownia Blach Sp. z o.o. for PLN 193 000 thousand, including PLN 130 000 thousand paid in cash
on acquisition and PLN 63 000 thousand payable in cash with deferred payment terms i.e. in instalments from
January 2006 to January 2011. The fair value of this consideration was estimated at the acquisition date at PLN
185 710 thousand (including the tax impact of PLN 1 710 thousand). Legal and other fees directly related to the
acquisition amounted to PLN 1 853 thousand. The business acquired comprises manufacturing and processing of
high quality metal products. The acquisition covered two separate legal entities which were acquired within the
scope of the same transaction. The effect of the acquisition was accounted for as related businesses.
For the period from the acquisition date to 30 September 2006, the subsidiaries contributed a net profit of
PLN 26 714 thousand to the consolidated net result for the period ended 30 September 2006.
The acquisition described in the preceding paragraph had the following effect on the Group’s assets and
liabilities.
Recognised
values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 173
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 748
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 810
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 761
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 721
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 933
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2 196)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9 939)
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 081)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47 910)
Net identifiable assets and liabilities (100% of net assets acquired) . . . . . . . 187 563
Total fair value of consideration* including: . . . . . . . . . . . . . . . . . . . . . . . . . 187 563
Consideration paid, satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 803
Consideration payable in the next periods . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 760
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4 933)
Net cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 870
* Include legal fees and other fees amounting to PLN 1 853 thousand.
F-10
ZŁOMREX S.A.
8. Acquisitions of subsidiaries (continued)

As a result of the acquisition, the Group recognised PLN 1 252 thousand as an intangible asset related to
major customer contracts and the related customer relationship.
Acquisition of Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski

On 7 March 2006, the Group acquired all of the shares in Centrostal Górnośla˛ski Sp. z o.o. for PLN
56,000 thousand satisfied in cash. Legal and other fees directly related to the acquisition amounted to PLN 422
thousand. The acquired company’s activities comprise trade in metal products.
For the period since the acquisition date to 30 September 2006, the subsidiary contributed a net profit of
PLN 2 309 thousand to the consolidated net result for the period ended 30 September 2006.
liabilities.
Recognised
values
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 899
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 238
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 198
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 999
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Consideration paid, satisfied in cash* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 422
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9 198)
Net cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 224
* Include legal fees and other fees amounting to PLN 422 thousand.
Acquisition of Centrostal Opole S.A.

Following a series of transactions, the Group obtained control of Centrostal Opole S.A. with a
shareholding of 94.0%. The value of the transactions amounted to PLN 2 920 thousand. The company’s activities
comprise trade in metal products.
PLN 968 thousand to the consolidated net result for the period ended 30 September 2006.
F-11
ZŁOMREX S.A.

liabilities.
Recognised
values
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 102)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 380
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.96%
Net identifiable assets and liabilities acquired . . . . . . . . . . . . . . . . . . . . . . . . 3 177
Excess of the interest in the net fair value of identifiable assets and
liabilities over cost of acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
Consideration paid, satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 920
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56)
Net cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 864
As the statutory financial statements of HSW Huta Stali Jakościowych Sp. z o.o., HSW Walcownia Blach
Sp. z o.o., Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski and Centrostal Opole S.A. were not prepared in
accordance with EU IFRS, it was impracticable to determine the carrying amounts of the assets and liabilities of
those companies immediately prior to the acquisition in accordance with EU IFRS.
Acquisition of Centrostal Gdańsk S.A.

On 7 August 2006, following a series of shares acquisitions (50.44% in total), the Group obtained control
of Centrostal Gdańsk S.A. The value of the transactions amounted to PLN 11 526 thousand satisfied in cash.
Legal and other fees directly related to the acquisition amounted to PLN 68 thousand. The acquired company
activities comprise trade in metal products.
PLN 916 thousand to the consolidated net result for the period ended 30 September 2006.
F-12
ZŁOMREX S.A.

liabilities.
Pre-acquisition Fair value Recognised
carrying amounts adjustments values
Property, plant and equipment . . . . . . . . 14 268 5 241 19 509
Intangible assets . . . . . . . . . . . . . . . . . . . 998 — 998
Investment property . . . . . . . . . . . . . . . . 497 — 497
Other investment . . . . . . . . . . . . . . . . . . 81 — 81
Other receivables . . . . . . . . . . . . . . . . . . 2 095 194 2 289
Prepaid perpetual legal rights . . . . . . . . . 905 5 075 5 980
Deferred tax asset . . . . . . . . . . . . . . . . . . 390 — 390
Inventories . . . . . . . . . . . . . . . . . . . . . . . 19 932 927 20 859
Trade and other receivables . . . . . . . . . . 25 953 — 25 953
Cash and cash equivalents . . . . . . . . . . . 3 713 — 3 713
Assets held for sale . . . . . . . . . . . . . . . . 795 — 795
Interest bearing payables . . . . . . . . . . . . (21 208) — (21 208)
Deferred tax provision . . . . . . . . . . . . . . (274) (2 170) (2 444)
Employee benefits . . . . . . . . . . . . . . . . . (15) — (15)
Trade and other payables . . . . . . . . . . . . (23 235) — (23 235)
Net identifiable assets and liabilities . . . 24 895 9 267 34 162
% of net assets acquired . . . . . . . . . . . . . 50.4%
Net identifiable assets and liabilities
acquired . . . . . . . . . . . . . . . . . . . . . . . 12 547 17 231
Excess of the interest in the net fair
value of identifiable assets and
liabilities over cost of acquisition . . . 5 637
Consideration paid in cash* . . . . . . . . . . 11 594
Cash acquired . . . . . . . . . . . . . . . . . . . . . (3 713)
Net cash outflow . . . . . . . . . . . . . . . . . . 7 881
* Includes legal fees and other fees amounting to PLN 68 thousand.
Other acquisitions
During January 2006, the Group acquired 51% of the shares in Kapitał Sp. z o.o. for PLN 401 thousand
satisfied in cash. The company’s activities include mainly financial and advisory services. As a result of the
acquisition, goodwill of PLN 96 thousand was recognised. For the period from the acquisition date to
30 September 2006 the subsidiary contributed a net profit of PLN 181 thousand to the consolidated net result for
the period ended 30 September 2006.
During March 2006, the Group established Złomrex China Limited by contribution in cash of PLN
1 thousand for 100% of the shares in this entity. The scope of activity of Złomrex China Limited includes trade
in metal products. For the period since incorporation to 30 September 2006 the subsidiary contributed a net loss
of PLN 1 269 thousand to the consolidated net result for the period ended 30 September 2006.
During March 2006, the Group established ZŁomrex — Pruszków Sp. z o.o. by contribution in cash of
PLN 50 thousand for 100% of the shares in this entity. The scope of activity of Złomrex — Pruszków Sp. z o.o.
includes purchasing and processing of iron scrap. Till the end of September 2006 the entity had not started its
operating activity.
During May 2006, the Group established Złomrex Zbrojarnia Sp. z o.o. by contribution in cash of PLN
50 thousand for 100% of shares in this entity. The scope of activity of Złomrex Zbrojarnia Sp. z o.o. includes
F-13
ZŁOMREX S.A.

processing of metal products and production of construction metal products. For the period since incorporation to
30 September 2006 the subsidiary incurred a net loss of PLN 228 thousand.
If all of the above presented acquisitions had occurred on 1 January 2006, the management estimates that
the consolidated revenue would have been PLN 1 536 403 thousand and the consolidated profit for the nine
months ended 30 September 2006 would have been PLN 70 635 thousand.
9. Income tax expense

The Group’s consolidated effective tax rate for the nine months ended 30 September 2006 was 19.6% (for
the nine months ended 30 September 2005: 19.5%).
10. Property, plant and equipment

Acquisitions and disposals
During the nine months ended 30 September 2006, the Group acquired property, plant and equipment at a
cost of PLN 208 833 thousand (nine months ended 30 September 2005: PLN 22 935 thousand), including
property, plant and equipment acquired through business combinations (see note 8) of PLN 176 903 thousand
(nine months ended 30 September 2005: PLN 1 003 thousand). Assets with a net book value of PLN
515 thousand were disposed of during the nine months ended 30 September 2006 (nine months ended
30 September 2005: PLN 569 thousand), resulting in a gain on disposal of PLN 246 thousand (nine months
ended 30 September 2005: gain of PLN 307 thousand).
Capital commitments
The capital commitments, resulting from the contracts signed as at 30 September 2006, were related
mainly to the modernisation of the steelworks equipment and the implementation of a uniform computer system
within the Group. With respect to these contracts, as at 30 September 2006 the Group is committed to incur
capital expenditures of PLN 11 519 thousand (30 September 2005: PLN 3 546 thousand). These commitments
are expected to be settled in the following year.
11. Goodwill
The Group performed its annual impairment testing of goodwill at the end of 2005. As a result of this
testing the recoverable amount of all cash generating units exceeded the carrying amount of the units including
goodwill.
The following business segments have significant carrying amounts of goodwill:
Nine months ended
30 September
2006 2005
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 488 8 488
Semi-Finished Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 887
Finished Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 175 4 751
14 550 14 126
Other units without significant goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 —
Total goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 646 14 126
During the nine months ended 30 September 2006 the Company recognised goodwill of PLN
423 thousand resulted from the acquisition of Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski S.A.
(allocated to finished products unit) and PLN 96 thousand resulted from the acquisition of Kapitał Sp. z o.o.
The Group has not made a detailed impairment calculation as at 30 September 2006 due to the lack of
indications of impairment since the end of 2005, when the last annual impairment testing of goodwill was
performed.
F-14
ZŁOMREX S.A.
12. Interest-bearing loans and borrowings

The increase in interest bearing borrowings is mainly a result of a new loan of PLN 120 000 thousand
drawn at the beginning of 2006 to finance the acquisition of HSW Huta Stali Jakościowych Sp. z o.o. and HSW
Walcownia Blach Sp. z o.o.
According to the aforementioned loan agreement, Złomrex S.A. is obliged to meet certain financial
covenants until the loan repayment date. In a case of non-compliance, the lenders (Bank Handlowy w Warszawie
S.A., Bank Polska Kasa Opieki S.A. and Bank BPH S.A.) (“the Banks”) may request immediate repayment of the
loan. As at 30 September 2006 and for the period ended 30 September 2006, some of these covenants were not
met. However, based on the representation obtained from the Banks by the Management of the Company, the
lenders waived their rights to request immediate repayment of the loan.
13. Contingencies, guarantees and other commitments

Commitments resulting from the share acquisition agreements
Based on the agreements for the share acquisition in HSW Huta Stali Jakościowych Sp. z o.o. and HSW
Walcownia Blach Sp. z o.o. the Company is obliged to make capital expenditures of PLN 55 960 thousand until
31 December 2008. If the Company does not fulfil its commitments, it will be subject to a penalty amounting to
100% of the difference between the actual expenditures and the value of the commitment. The Company is also
obliged to continue the activities of the acquired entities without admitting to the liquidation or sale of the
entities for 5 years, subject to the stipulated penalty of PLN 40 000 thousand, as well as not to decrease the share
capital subject to the stipulated penalty amounting to 100% of such decrease.
Other
Š Bill of exchange guarantee in favour of Huta Łabe˛dy S.A. up to PLN 2.1 million.
Š Contractual commitment to purchase advisory services of PLN 520 thousand from “Prymko”
Krzysztof Walarowski in future periods.
Š Employee claims for benefits of PLN 70 thousand.
14. Related parties

Transactions and balances with companies controlled by the parent Company’s Management Board
members
Transaction value for nine months ended Balance outstanding
30 September 2006 30 September 2005 30 September 2006 31 December 2005
PRYMKO Krzysztof Walarowski
Purchased services . . . . . . . . . . . . 296 503 — —
Trade and other payables . . . . . . . — — — 24
Przedsie˛biorstwo Wiedza i Praca
Sales of goods and services . . . . . 27 13 — —
Interest on loans granted . . . . . . . 181 238 — —
Purchased services . . . . . . . . . . . . 1 560 2 241 — —
Loans granted . . . . . . . . . . . . . . . . — — 4 746 3 776
Trade and other receivables . . . . . — — 14 130
Armaton Polska Sp. z o.o.
Sales of services . . . . . . . . . . . . . . 1 10 — —
Interest on loans granted . . . . . . . 35 62 — —
Loans granted . . . . . . . . . . . . . . . . — — 384* 535*
Trade and other receivables . . . . . — — — 1
* net of impairment loss amounting to PLN 328 thousand
F-15
ZŁOMREX S.A.
14. Related parties (continued)

Transactions with the members of the Management and Supervisory Boards
The remuneration of the Management and Supervisory Boards members was as follows:
Nine months ended

30 September 30 September
2006 2005
Management Board of the parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 012 2 268
Supervisory Board of the parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 249
Management Boards of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 756* 1 121
Supervisory Boards of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134* 69
6 141 3 707
* The remuneration relates to the period from obtaining control of subsidiaries.

Additionally, one of the parent Company’s Management Board members is entitled to an annual bonus
amounting to 1% of the Group’s consolidated net profit, towards which a provision of PLN 500 thousand was
recognised in the income statement.
15. Subsequent events

On 17 October 2006, the Extraordinary Shareholders’ Meeting of Złomrex S.A. resolved to transfer PLN
20,000 thousand from reserve capital to reserve capital for dividend payment.
During October 2006, the Group established Złomrex Finance International, with its seat in France, by
contribution in cash of PLN 893 thousand for 100% of the shares in this entity.
On 13 December 2006, the Supervisory Board of Złomrex S.A. made decision on payment of an interim
dividend for 2006 of PLN 10 000 thousand.
F-16
Audited Consolidated Financial Statements
for years ended 31 December 2005 and 2004 of Złomrex S.A.
F-17
ZŁOMREX S.A.
Report of the Independent Auditor to the shareholders of Złomrex S.A.

We have audited the accompanying consolidated balance sheet of Złomrex S.A. (“the Company”) and its
subsidiaries (“the Group”) as of 31 December 2005 and the related consolidated income statement, consolidated
statement of changes in the shareholders’ equity and consolidated statement of cash flows for the year then
ended. These consolidated financial statements are responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.
Except as described in the following paragraph, we conducted our audit in accordance with International
Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
We did not observe the counting of the physical inventories as of 31 December 2005, because that date
was prior to the time we were engaged as auditors for the Group. We were unable to satisfy ourselves as to
inventory quantities or condition as at 31 December 2005 by other audit procedures. Accordingly, we were not
able to determine whether any adjustments might be necessary to the amounts shown in the consolidated
financial statements as at and for the year ended 31 December 2005 for inventories, cost of sales, income taxes,
net earnings and retained earnings.
In our opinion, except for the effects of such adjustments, if any, as might have been determined to be
necessary to inventories, cost of sales, income taxes, net earnings and retained earnings, shown in the
consolidated financial statements as of 31 December 2005 and for the year then ended, had we been able to
satisfy ourselves as to physical inventory quantities or condition as at 31 December 2005, the consolidated
financial statements present fairly, in all material respects, the financial position of the Group as of 31 December
2005, the results of its operations and its cash flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union.
KPMG Audyt Sp. z o.o.

Warsaw, Poland
17 November 2006
F-18
ZŁOMREX S.A.
Special Purpose Report of the Independent Auditor on the Consolidated Transitional IFRS Financial
Statements
To the Management Board of Złomrex S.A.
We have audited the accompanying consolidated transitional IFRS balance sheet of Złomrex S.A. (“the
Company”) and its subsidiaries (“the Group”) as of 31 December 2004, the related consolidated transitional IFRS
statements of income, changes in equity and cash flows for the year then ended (“the consolidated transitional
IFRS financial statements”). These consolidated transitional IFRS financial statements are the responsibility of
the Company's management. They have been prepared as part of the Company’s conversion to International
Financial Reporting Standards as adopted by the European Union (“EU IFRSs”). Our responsibility is to express
an opinion on these consolidated transitional IFRS financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated transitional
IFRS financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated transitional IFRS financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated transitional IFRS financial statements. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the accompanying consolidated transitional IFRS financial statements as at 31 December
2004 have been prepared, in all material respects, in accordance with the basis set out in Note 1 and Note 30,
which describes how EU IFRSs have been applied under IFRS 1, including the assumptions management has
made about the standards and interpretations effective and the policies adopted, when management prepares its
first complete set of IFRS financial statements as at 31 December 2005.
Without qualifying our opinion, we draw attention to the fact that the Company has prepared the
consolidated transitional IFRS financial statements as at 31 December 2004 to establish the financial position,
results of operations and cash flows of the Group necessary to provide the comparative financial information to
be included in the Group's first complete set of IFRS financial statements as at 31 December 2005. The
consolidated transitional IFRS financial statements do not themselves include comparative financial information
for the prior period.

Warsaw, Poland
17 November 2006
F-19
ZŁOMREX S.A.
For the years ended 31 December 2005 and 2004
CONSOLIDATED INCOME STATEMENTS

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976 236 1 194 898
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (880 748) (1 019 468)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 488 175 430
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3 531 2 772
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15 691) (22 083)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40 598) (36 866)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (4 725) (2 861)
Operating profit before financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 005 116 392
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 815 8 761
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20 852) (17 647)
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (17 037) (8 886)
Excess of the interest in the net fair value of identifiable assets, liabilities and
contingent liabilities acquired over cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 — 101 036
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 968 208 542
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (4 098) (3 659)
Attributable to:
Equity holders of the parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 304 201 963
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 566 2 920
Basic earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 0.32 4.23
Diluted earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 0.32 4.23
The consolidated income statements should be read in conjunction with the explanatory notes
constituting part of the consolidated financial statements
F-20
ZŁOMREX S.A.
As at 31 December 2005 and 2004
CONSOLIDATED BALANCE SHEETS

Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 269 011 258 188
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 19 953 15 040
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 603 603
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3 508 3 800
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 473 1 778
Prepaid perpetual usufruct of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 959 10 364
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 10 845 13 687
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 352 303 460
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 103 632 112 465
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1 976 1 361
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 153 798 149 267
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 14 623 4 442
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 029 267 535
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 381 570 995
Equity
Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 47 691 47 691
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 995 13 829
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 473 202 335
Total equity attributable to equity holders of the parent . . . . . . . . . . . . . . . . . 279 159 263 855
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 821 13 965
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 980 277 820
Liabilities
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 52 653 63 033
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1 432 1 616
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 14
Deferred government grants and other deferred income . . . . . . . . . . . . . . . . . 606 265
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 691 64 928
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 141 35 559
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 129 194 90 711
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 320 —
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 184 358
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1 065 4 320
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 708 954
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 80 793 96 275
Deferred government grants and other deferred income . . . . . . . . . . . . . . . . . 305 70
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 710 228 247
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 401 293 175
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 381 570 995
The consolidated balance sheets should be read in conjunction with the explanatory notes
F-21
ZŁOMREX S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 968 208 542
Adjustments
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 21 306 18 648
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 806 691
Impairment losses and valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . 1 453 11 044
Foreign exchange gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 094) (3 624)
Net gain on disposal of property, plant and equipment . . . . . . . . . . . . . . . . . (337) (174)
Interest and dividends, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 108 11 162
Change in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 865) (8 272)
Change in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 378 (67 914)
Change in trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17 849) (66 075)
Change in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (246) 954
Change in employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (358) (522)
Change in deferred government grants and other deferred income . . . . . . . . 576 335
Excess of the interest in the net fair value of identifiable assets, liabilities
and contingent liabilities acquired over cost . . . . . . . . . . . . . . . . . . . . . . . . 3 — (101 036)
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (701) (1 673)
Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 145 2 086
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (4 500) (14 494)
Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 645 (12 408)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . 873 282
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 406 3 040
Repayment of loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 258 16 069
Acquisition of subsidiary, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (20 409) (60)
Acquisition of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (18 283) (10 023)
Acquisition of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (1 820) (67)
Prepaid perpetual legal rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 371) (124)
Interest-bearing loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (403) (3 100)
Net cash from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36 749) 6 017
Cash flows from financing activities
Receipt of interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 20 23 716 3 749
Proceeds from derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 354 1 035
Payment of finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 (8 538) (7 944)
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18 829) (12 528)
Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 297) (15 688)
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 599 (22 079)
Cash and cash equivalents net of bank overdraft, at 1 January . . . . . . . . . . . . . . . . (31 117) (9 038)
Cash and cash equivalents net of bank overdraft, at 31 December . . . . . . . . . 17 (14 518) (31 117)
The consolidated statements of cash flows should be read in conjunction with the explanatory notes
F-22
ZŁOMREX S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the parent

Issued share Retained Minority
in PLN thousand capital Reserves earnings Total interest Total equity
Equity as at 1 January 2004 . . . . . . . . . . 47 691 338 13 863 61 892 — 61 892
Transfer of profit . . . . . . . . . . . . . . . . . . . . — 13 491 (13 491) — — —
Minority interest at the subsidiaries’
acquisition date . . . . . . . . . . . . . . . . . . . . — — — — 11 045 11 045
Net profit for the period . . . . . . . . . . . . . . . — — 201 963 201 963 2 920 204 883
Equity as at 31 December 2004 . . . . . . . . 47 691 13 829 202 335 263 855 13 965 277 820
Transfer of profit . . . . . . . . . . . . . . . . . . . . — 73 166 (73 166) — — —

Shares issued to the minority shareholders
of subsidiaries . . . . . . . . . . . . . . . . . . . . . — — — — 290 290
Net profit for the period . . . . . . . . . . . . . . . — — 15 304 15 304 1 566 16 870
Equity as at 31 December 2005 . . . . . . . . 47 691 86 995 144 473 279 159 15 821 294 980
The consolidated statements of changes in equity should be read in conjunction with the explanatory notes
F-23
ZŁOMREX S.A.
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Group overview and description of the significant accounting policies

a) Background
Złomrex S.A. (“Złomrex”, “the Company”, “the parent Company”) with its seat in Poraj, Poland, is the
parent Company of the Group. The Company was established as a result of the transformation of a limited
liability company Złomrex Sp. z o.o. into a joint-stock company Złomrex S.A. on 29 June 2004.
The Company is the largest supplier of scrap metal and one of the major producers of finished steel
products in Poland with fully integrated operations spanning the entire steel production process. The Company’s
activities include primarily: providing of scrap with the most extensive network of scrap metal branches,
processing of scrap metal into steel billets and non-ferrous scrap into finished goods, and production of high-
quality finished steel products.
The consolidated financial statements as at and for the year ended 31 December 2005 comprise the parent
Company and its subsidiaries (“the Group”). The basic information about the subsidiaries, that comprise the
Group as at 31 December 2005, is presented in the table below.
Ownership interest and Date of obtaining

Name of the entity Seat of entity Core activities voting rights control
Odlewnia Metali Manufacture of non-
Szopienice Katowice, Poland ferrous metal alloy 100.0% 31 July 2004
Sp. z o.o. products
ZW — Walcownia Manufacture of metal
Zawiercie, Poland 100.0% 13 January 2005
Bruzdowa Sp. z o.o. products
Ferrostal Łabe˛dy Manufacture of metal

Gliwice, Poland 91.2% 19 February 2004
Sp. z o.o. products
Złomrex — Finans Poraj, Poland Financial services 100.0% 16 September 2003

Sp. z o.o.
Nowa Jakość — Purchasing, packaging,
Organizacja Odzysku reselling of paper and
Poraj, Poland 100.0% 13 June 2004
S.A. plastic waste for further
production
b) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (“IFRS EU”).
These consolidated financial statements were approved by the Board of Directors on 17 November 2006.
These financial statements are the first financial statements of the Group which are prepared in
accordance with IFRS EU and to the preparation of which IFRS 1 First-time Adoption of IFRS (“IFRS 1”) was
applied. An explanation of changes resulting from the first-time adoption of IFRS EU and a description of
restatements of comparative periods is presented in Note 30.
IFRS EU contain all International Accounting Standards, International Financial Reporting Standards as
well as related Interpretations except for the below listed Standards and Interpretations which are awaiting
approval of the European Union as well as those Standards and Interpretations which have been approved by the
European Union but are not yet effective.
The Group did not use the option of early adopting of new Standards and Interpretations which have been
published and approved by the European Union and which will come into effect after the balance sheet date.
Moreover, at the balance sheet date the Group had not completed the process of assessing the impact of the new
standards and interpretations, which will come into effect after the balance sheet date, on the consolidated
financial statements of the Group for the period in which they will be applied for the first time.
F-24
ZŁOMREX S.A.
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. Group overview and description of the significant accounting policies (continued)

Standards and Interpretations Effective date
Amendments to IAS 39 Financial instruments: Recognition and Measurement and to IFRS 4 1 January 2006
Financial guarantee contracts.
The amendment requires that the financial guarantees that are not insurance contracts be
measured at fair value in the moment of their initial recognition.
Amendments to IAS 19 Employee Benefits — Actuarial Gains and Losses, Group Plan and 1 January 2006
Disclosures (including the resulting amendments to IAS 1, IAS 24 and IFRS 1).
The amendment includes an option for actuarial gains and losses to be recognized in full in
equity as they arise.
Financial Instruments: Recognition and Measurement — Cash Flow Hedge Accounting of 1 January 2006
Forecast Intragroup Transactions.
The amendment allows the currency risk related to highly probable intragroup transaction to
qualify as a hedge item provided that certain criteria are met.
Amendment to IAS 39 Financial instruments: Recognition and Measurement: 1 January 2006
— Measurement at fair value (including the resulting amendments to IAS 32 and IFRS 1).
The amendment restricts classification of financial instruments as valued “at fair value through
profit and loss account”.
Amendment to IAS 1 Equity Disclosures. 1 January 2006
As a result of the amendment to IFRS 7 (see below), the Standard will introduce extended
disclosure in relation to the Group’s equity.
Amendment to IAS 21 The Effects of Changes in Foreign Exchange — Net investment in a 1 January 2006
Foreign Operation.
The interpretation clarifies in which circumstances a loan may be recognized as part of net
investment in a foreign operation and in which currency this loan should be denominated.
IFRIC 4 Determining whether an Arrangement contains a Lease (including the amendments to 1 January 2006
IFRS 1).
The interpretation requires the recognition of certain agreements as a lease even if they are not
legally classified as a lease.
IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental 1 January 2006
Rehabilitation Funds (including the resulting amendments to IAS39).
IFRIC 8 Scope of IFRS 2 1 May 2006*
The interpretation clarifies that IFRS 2 Share-based payments applies to transactions where an
entity makes share-based payments and in return receives inadequate low or nil consideration.
IFRIC 9 Reassessment of Embedded Derivatives 1 June 2006 *
The interpretation clarifies that the embedded derivatives are accounted for when an entity
becomes a party to the contract and that subsequent reassessment is prohibited unless there is a
change in the terms of the contract that significantly modifies the cash flows resulting from the
contract.
IFRS 7 Financial Instruments: Disclosures 1 January 2007
The standard requires extended disclosure of information with regard to the financial
instruments of the Group. It replaces IAS 30 “Disclosures in the Financial Statements of Banks
and Similar Financial Institutions” and refers to all entities preparing their financial statements
in accordance with IFRS.
F-25
ZŁOMREX S.A.

Standards and Interpretations Effective date
IFRIC 10 Interim Financial Reporting and Impairment 1 November 2006*
The interpretation prohibits the reversal of an impairment loss recognised in a previous
interim period in respect of goodwill, an investment in an equity instrument or a financial
asset measured at cost.
IFRIC 11 IFRS 2 — Group and Treasury Share Transactions 1 March 2007*

The interpretation clarifies that share based payment transactions in which an entity receives
services as consideration for its own equity instruments shall be accounted for as equity
settled. The interpretation clarifies also the accounting for share based payments
arrangements that involve two or more entities within the same Group.
* Not yet endorsed by the EU
c) Basis of preparation of the consolidated financial statements

The financial statements are presented in Polish zloty, being the functional currency and presentation
currency of the parent Company, rounded to the nearest thousand, unless otherwise stated. The financial
statements have been prepared on the historical cost basis with the exception of financial instruments classified
as available for sale, financial instruments measured at fair value through profit or loss and some property, plant
and equipment valued at deemed cost.
The preparation of financial statements in conformity with IFRS EU requires that the Management Board
of the parent Company makes judgments, estimates and assumptions that affect the application of policies and
reported amounts of assets, equity and liabilities, income and expenses with respect to the Group. The estimates
and associated assumptions are based on historical experience and other factors that are believed to be reasonable
under the circumstances and the results of which form a basis for professional judgment on carrying values of
assets and liabilities that are not readily apparent from other sources. The actual results may differ from these
estimates.
estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision affects both current and future periods.
Professional judgments and estimates made by the Management Board of the parent Company while
applying IFRS EU that have a significant effect on the financial statements are discussed in note 29.
The accounting principles set out below have been applied consistently to all periods presented in the
financial statements and in preparation of the IFRS EU opening balances as at 1 January 2004 for the purpose of
transition to IFRS EU.
d) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the parent Company. Control exists when the Company has the
power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are
taken into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
(ii) Associates
Associates are those entities for which the Group has significant influence, but not control, over the
financial and operating policies.
The consolidated financial statements include the Group’s share of the total recognized gains and losses
of associates on an equity accounted basis, from the date that significant influence commences until the date that
F-26
ZŁOMREX S.A.

significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s
carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of an associate.
(iii) Transactions eliminated on consolidation

Intragroup balances, and any unrealized gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from
transactions with associates are eliminated to the extent of the Group’s interest in the entity. Unrealized losses are
eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
e) Foreign currencies
Transactions in foreign currencies are translated into Polish zloty at the foreign exchange rate ruling at the
date of the transaction:
Š applied by the bank whose services the entity uses — in case of foreign currency purchase or sale
transactions;
Š average National Bank of Poland (“NBP”) rate, unless another exchange rate was established in
customs or other binding documents — for other transactions.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
into the Polish currency at an average NBP rate at that date. Foreign exchange differences arising on translation
are recognized in the income statement. Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using NBP average exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to
the Polish zloty at the NBP average exchange rate ruling at the date the fair value was determined.
f) Property, plant and equipment

(i) Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation
and impairment losses. The cost includes the purchase price of the assets (i.e. the amount due to a seller less
deductible VAT and excise tax), taxes and charges (in case of import) and costs directly related to the purchase
and completion of the asset, so that it can be available for use, including the transport, loading, unloading and
storing costs. Rebates, discounts and other similar reductions decrease the cost. The construction cost of
property, plant and equipment or assets under construction includes total cost incurred by the entity in the period
of their construction, assembly, adjustment and modernization till the date of their transfer to use (or up to the
balance sheet date, if the asset was not transferred to use before this date), including non-deductible VAT and
excise tax. The construction cost also includes preliminary estimates of the cost of dismantling and removing the
components of tangible fixed assets and the restoration cost.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
(ii) Subsequent expenditures

The Group recognizes in the carrying amount of an item of property, plant and equipment, the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic benefits
embodied with the item will flow to the Group and the cost can be measured reliably. All other expenditures are
recognized in the income statement as an expense as incurred.
F-27
ZŁOMREX S.A.

(iii) Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of
each component of property, plant and equipment, considering residual values. Land is not depreciated. The
estimated useful lives are as follows:
Š Buildings from 10 to 40 years

Š Machinery and equipment from 2 to 28 years
Š Vehicles from 5 to 22 years
Š Fixtures and fittings from 1 to 3 years
The useful lives, depreciation methods and residual values are reassessed annually.
g) Intangible assets
(i) Goodwill
All business combinations, excluding the businesses which are under common control, are accounted for
by applying the purchase method. In respect of business acquisitions that have occurred after 1 January 2004,
goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable
assets acquired.
In respect of acquisitions prior to this date, goodwill represents the amount recorded under previous GAAP.
The classification and accounting treatment of business combinations that occurred prior to 1 January 2004 has not
been reconsidered in preparing the Group’s opening IFRS balance sheet at 1 January 2004 (see note 30).
Subsequent to initial recognition, goodwill is stated at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units and is no longer amortized but is tested annually for impairment
(see point l Impairment, below). In respect of associates, the carrying amount of goodwill is included in the
carrying amount of the investment in the associate.
The excess of the interest in the net fair value of identifiable assets, liabilities and contingent liabilities
over cost arising on an acquisition is recognized directly in profit or loss.
(ii) Research and development

Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognized in the income statement as an expense as incurred.
Expenditures on development activities, whereby research findings are applied to a plan or design for the
production of new or substantially improved products and processes, are capitalized if the product or process is
technically feasible, economically justified and the Group has sufficient resources to complete development. The
capitalized expenditures include: the cost of materials, direct labour and an appropriate proportion of overheads.
Other development expenditures are recognized in the income statement as incurred. Capitalized
development expenditures are recognized as intangible assets at cost less accumulated amortization (see below) and
impairment losses (see point l below).
(iii) Emission rights

Emission rights received from the government are measured at cost less impairment losses (see point l
below). The cost in case of emission rights which were acquired in a business combination is their fair value. The
liability arising in an emission rights scheme from producing pollution are measured based on the carrying
amount of allowances held to the extent that the Group holds sufficient allowances to satisfy its current
obligations.
(iv) Other intangible assets

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortization
(see below) and impairment losses (see point l below).
Expenditures on internally generated goodwill and brands are recognized in the income statement as
expense as incurred.
F-28
ZŁOMREX S.A.

(v) Subsequent expenditures
Subsequent expenditures on capitalized intangible assets are capitalized only when they increase the
future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognized
in the income statement as incurred.
(vi) Amortization
Amortization is charged to the income statement on a straight-line basis over the estimated useful lives of
intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful life are
systematically tested for impairment at each balance sheet date. Other intangible assets are amortized from the
date they are available for use. The estimated useful lives are as follows:
Š Capitalized development costs 5 years

Š Other 2 years
h) Investments
(i) Investment in debt and equity instruments
Financial instruments held for trading are classified as financial instruments at fair value through the profit
or loss. Any resultant gains and losses are recognized in the income statement.
Where the Group has the positive intent and ability to hold bonds to maturity, they are stated at amortized
cost less impairment losses (see point l below).
(ii) Investment property

Investment properties are properties which are held either to earn rental income or for capital appreciation
or for both. Investment properties are stated at fair value. The fair values are based on market values, being the
estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and
a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion.
Any gain or loss arising from a change in fair value is recognised in the income statement. Rental income
from investment property is accounted for as described in accounting policies.
When an item of property, plant and equipment is transferred to investment property following a change
in its use, any differences arising at the date of transfer between the carrying amount of the item immediately
prior to transfer and its fair value is recognised directly in equity if it is a gain. Upon disposal of the item the gain
is transferred to retained earnings. Any loss arising in this manner is recognised immediately in the income
statement.
If an investment property becomes owner-occupied, it is reclassified as property, fixtures and fittings and
its fair value at the date of reclassification becomes its cost for accounting purposes of subsequent recording.
When the Group begins to redevelop an existing investment property for continued future use as investment
property, the property remains an investment property, which is measured based on the fair value model, and is
not reclassified as property, plant and equipment during the redevelopment.
A property interest under an operating lease is classified and accounted for as an investment property on a
property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such
property interest under an operating lease classified as an investment property is carried at fair value. Lease
payments are accounted for as described in accounting policies.
i) Trade and other receivables

Trade and other receivables are non-derivative financial assets and financial assets not quoted in an active
market with fixed or determinable payments. They are initially recognized at fair value and are subsequently
measured at amortized cost less impairment losses (see point l below).
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ZŁOMREX S.A.

j) Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs of completion and selling expenses.
The cost of inventories is determined based on the first in, first out principle. The costs include
expenditure incurred in acquiring the inventories. In the case of finished goods and work in progress, costs
include an appropriate share of overheads based on normal operating capacity.
k) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term bank deposits. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management are included as a component of
cash and cash equivalents for the purpose of the statement of cash flows.
l) Impairment
The carrying amount of the Group’s assets, other than inventories (see point j) and deferred tax assets (see
point v), is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any
such indication exists, the assets recoverable amount is estimated (see point l (i)).
For goodwill and intangible assets that have an indefinite useful life and intangible assets that are not yet
available for use, the recoverable amount is estimated at each balance sheet date.
An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount.
Impairment losses recognized in respect of a cash-generating unit (or a group of units) are allocated first
to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or a group of units) and
then, to reduce the carrying amount of the other assets in the unit (or a group of units) on a pro rata basis.
Impairment losses are recognized in the income statement.
When a decline in the fair value of an available-for-sale financial asset has been recognized directly in
equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized
directly in equity is recognized in the income statement even though the financial asset has not been
derecognized. The amount of the cumulative loss that is recognized in the income statement is the difference
between the acquisition cost and current fair value, less any impairment loss on that financial asset previously
recognized in the income statement.
(i) Calculation of recoverable amount

The recoverable amount of the Group’s investments in held to maturity securities and receivables carried
at amortized cost is calculated as the present value of estimated future cash flows, discounted at the original
effective interest rate. Short-term receivables are not discounted.
The recoverable amount of other assets is the greater of their net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For an asset which does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
(ii) Reversal of impairment

An impairment loss in respect of a held-to-maturity security or receivable carried at amortized cost is
reversed through profit or loss if the subsequent increase in recoverable amount can be related objectively to an
event occurring after the impairment loss was recognized.
An impairment loss in respect of an investment in an equity instrument classified as available for sale is
not reversed. If the fair value of a debt instrument classified as available-for-sale increases and the increase can
F-30
ZŁOMREX S.A.

be objectively related to an event occurring after the impairment loss was recognized in the income statement, the
impairment loss shall be reversed, with the amount of the reversal recognized in the income statement.
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had
been recognized.
m) Equity
(i) Issued share capital
The share capital of the parent Company constitutes the share capital of the Group.
(ii) Dividends
Dividends are recognized as a liability in the period in which they are declared.
n) Interest bearing loans and borrowings

Interest–bearing loans and borrowings are recognized initially at fair value less attributable transaction
costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortized cost with any
difference between cost and redemption value being recognized in the income statement over the period of the
borrowings on an effective interest basis.
o) Employee benefits
(i) Defined benefits plan — retirement awards
The Group recognises provisions for retirement and pension benefits (employee benefits) based on the
actuarial valuation as at the balance sheet date prepared by an independent actuary. The basis for the calculation
of the provisions for the employee benefits is set by the Group’s internal regulations, the Collective Labour
Agreement for the Group’s employees and the legal regulations in force.
Provisions for employee benefits are determined with the use of actuary techniques and assumptions in
conformity with the requirements of IFRS EU and in particular IAS 19 ‘Employee Benefits’. Provisions are
measured on the basis of the present value of the Group’s future obligations with regard to employee benefits.
Provisions are calculated using an individual method, separately for each employee. The basis for the calculation
of the provision for an employee is the projected amount of the benefit that the Group commits to pay pursuant to
the regulations described above. The projected amount of the benefit is calculated till it is vested with an
employee, considering the projected amount of the basis of the benefit, projected increase in the benefit and the
length of service of a given employee. The calculated amount is discounted actuarially to the balance sheet date.
p) Provisions
A provision is recognized in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risk specific to the liability.
q) Trade and other payables

Trade and other payables are stated at cost. Current liabilities are not discounted.
F-31
ZŁOMREX S.A.

r) Deferred government grants and other deferred income
Government grants are recognised in the balance sheet at fair value initially as deferred income when
there is reasonable certainty that they will be received and that the Group will comply with the conditions
attaching to them. Grants that compensate the Group for expenses incurred are recognised as revenue in the
income statement on a systematic basis in the same periods in which the expenses are incurred. Grants that
compensate the Group for the cost of an asset are recognised in the income statement as other income on a
systematic basis over the useful life of the asset.
s) Revenue
(i) Goods sold and services rendered
Revenue from the sale of goods is recognized in the income statement when the significant risks and
rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognized in the
income statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage
of completion is assessed by reference to surveys of work performed. No revenue is recognized if there are
significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of
goods, or continuing management involvement with the goods.
(ii) Rental income

Rental income from investment property is recognised in the income statement on a straight-line basis
over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income.
t) Costs
(i) Research and development costs
Research and development costs are recognized in the income statement as incurred. Development costs
are recognized as intangible assets when the criteria set out in IAS 38 “Intangible assets” are met and when it is
probable that the future economic benefits will flow to the Group (see point g (ii)).
(ii) Operating lease payments

Payments made under operating leases are recognized in the income statement on a straight-line basis
over the term of the lease. Lease incentives received are recognized in the income statement as an integral part of
the total lease expense.
(iii) Finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
(iv) Net financing costs and revenues

Net financing costs comprise interest payable on borrowings calculated using the effective interest rate
method, interest receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and
losses on hedging instruments that are recognized in the income statement.
Interest income is recognized in the income statement as it accrues, using the effective interest method.
Dividend income is recognized in the income statement on the date the entity’s right to receive payments is
established. The interest expense component of finance lease payments is recognized in the income statement
using the effective interest rate method.
u) Financial instruments
(i) Financial instruments
Financial instruments are classified in the following categories: held-to-maturity financial assets,
financial assets measured at fair value through profit or loss, available-for-sale financial assets, loans and
F-32
ZŁOMREX S.A.

receivables. Management determines the classification of its investments at initial recognition and re-evaluates
this classification at each reporting date. Acquisition and sale of financial assets is recognized at the transaction
date. Financial assets are recognized initially at fair value, including transaction costs.
Held-to-maturity financial assets

Held-to-maturity financial assets include assets with fixed or determinable payments and fixed maturities
that the Group has the positive intention and ability to hold to maturity.
Held-to-maturity financial assets are valued at amortized cost calculated using the effective interest rate
method.
Assets in this category are recognized as non-current assets, if the realization date exceeds 12 months
from the balance sheet date.
Financial assets measured at fair value through profit or loss

Financial assets acquired for the purpose of generating a profit from short-term price fluctuations are
classified as financial assets measured at fair value through profit or loss.
They are valued at fair value, without transaction costs, and considering the market value as at balance
sheet date. Changes in fair value are recognized in the income statement.
Assets in this category are classified as current assets, if the management of the Group has the positive
intention to realize them within 12 months of the balance sheet date.
Available-for-sale financial assets

All other financial assets that are not loans or receivables are classified as available-for-sale financial
assets.
Available-for-sale financial assets are valued at fair value without transaction costs, considering the
market value as at balance sheet date. If the financial assets are not listed on a stock exchange and if there are no
alternative ways to verify their fair value, available-for-sale financial assets are valued at costs less any
impairment loss.
Gains or losses, except for impairment losses, calculated as the difference between the fair value and the
cost, net of deferred tax, if there is a market price established by the regulated market or for which the fair value
may be established in a reliable way, are recognized directly in equity. A decline in the value of the
available-for-sale financial assets resulting from impairment loss is recognized in the profit and loss account as a
financial cost.
Loans and receivables

Loans and receivables are valued at amortized cost.
(ii) Derivative financial instruments

The Group uses derivative financial instruments to hedge its exposure to foreign exchange risk arising
from operational, financing and investment activities.
Derivative financial instruments that do not qualify for hedge accounting are accounted for as trading
instruments.
Derivative financial instruments are recognized initially at cost. Subsequent to initial recognition,
derivatives are valued at fair value. The gains or losses on remeasurement to fair value are recognized
immediately in the income statement.
The fair value of forward exchange contracts is the quoted market price at the balance sheet date, being
the present value of the forward quoted price.
F-33
ZŁOMREX S.A.

v) Income tax
Corporate income tax, as presented in the profit and loss account, comprises current and deferred tax.
Income tax is recognized in the income statement except to the extent that it relates to items recognized directly
in equity, in which case it is recognized in equity.
Current tax is the expected tax payable on the taxable income for the year and any adjustment to tax
payable in respect of previous years.
Deferred tax is calculated using the balance sheet liability method, based on temporary differences
between the carrying amounts of assets and liabilities for accounting purposes and the amounts used for tax
purposes. The following temporary differences are not included in the calculation of deferred tax: goodwill not
deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable
profit, and differences relating to investments in subsidiaries to the extent that they are not likely to reverse in the
foreseeable future. The amount of deferred tax recognized in the balance sheet is based on the expectation as to
the realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
available against which temporary differences can be utilised. A deferred tax asset is reduced to the extent that it
is no longer probable that the related tax benefit will be realized.
Additional income tax that arise on distribution of dividends is recognized at the same time when the
liability to pay the dividend is recognized.
Business segments
Primary segment information is presented in respect of the Group’s business. Business segments are
based on the Group’s management and internal reporting structure.
Inter-segment pricing in 2004 was determined based on the arm’s length conditions.
In 2005, the prices of scrap in the inter-segment transactions were determined based on the purchase
prices of scrap on no-loss, no-gain basis. The inter-segment pricing of semi-finished products was based were
established based on costs plus 12% margin.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and revenue,
interest-bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period.
The Group comprises the following main business segments:
1 Scrap Metal — this segment includes the buying, processing, refining and selling of scrap metal to
the Group’s customers.
2 Semi-Finished Products — this segment includes the buying and processing of scrap metal into
steel billets and the sale of these steel billets to the Group’s customers.
3 Finished Products — this segment includes (i) the buying and processing of scrap metal into
billets which are in turn processed into finished products and sold to the Group’s customers,
(ii) the buying of steel billets from third parties and processing them into finished products and
selling them to the Group’s customers and (iii) the buying of finished products and the sale of
those products to the Group’s customers.
4 Other — this segment includes among others (i) the buying of non-ferrous scrap and selling it to
the Group’s customers, (ii) the processing of non-ferrous scrap into finished products and the sale
of those non-ferrous products to the Group’s customers, (iii) the buying and selling of non-ferrous
products and (iv) recycling materials, including plastic foils, paper and other products.
F-34
ZŁOMREX S.A.
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers.
The Group is not able to split the capital expenditures into geographical segments as the same fixed assets are used for the production of goods dedicated for both
segments.
Business segments
Scrap Metal Semi-Finished Products Finished Products Other Eliminations Consolidated
2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
Revenue from external
customers . . . . . . . . . . . . . . . . . 187 987 353 409 237 261 225 689 368 601 471 173 182 387 144 627
Inter-segment revenue . . . . . . . . . 244 822 236 222 397 630 476 887 35 165 127 807 19 905 14 642
Total revenue . . . . . . . . . . . . . . . . 432 809 589 631 634 891 702 576 403 776 598 980 202 292 159 269 (697 522) (855 558) 976 246 1 194 898
F-35
Cost of sales to external

customers . . . . . . . . . . . . . . . . . (177 236) (324 958) (214 061) (209 608) (358 495) (436 704) (160 149) (129 662)
Inter-segment cost of sales . . . . . . (245 172) (199 075) (370 437) (436 617) (35 905) (123 942) (16 815) (14 460)
Total cost of sales . . . . . . . . . . . . . (422 408) (524 033) (584 498) (646 225) (394 400) (560 646) (176 964) (144 122) 697 522 855 558 (880 748) (1 019 468)
Other income . . . . . . . . . . . . . . . . 1 285 — 16 — 470 — — — — — 1 771 —
Distribution and administrative
expenses . . . . . . . . . . . . . . . . . . (16 752) (25 380) (4 870) (4 058) (6 324) (2 629) (4 042) (575) — — (31 988) (32 642)
Segment result . . . . . . . . . . . . . . . (5 066) 40 218 45 539 52 293 3 522 35 705 21 286 14 572 — — 65 281 142 788
Unallocated income/expenses . . . . (27 276) (26 396)
Operating profit . . . . . . . . . . . . . . 38 005 116 392
Net financing costs . . . . . . . . . . . . (17 037) (8 886)
Excess of the interest in the net
fair value of identifiable assets,
liabilities and contingent
liabilities acquired over cost . . . — 101 036
Income tax expense . . . . . . . . . . . (4 098) (3 659)
Profit for the period . . . . . . . . . . . 16 870 204 883
ZŁOMREX S.A.

Semi-Finished
Scrap Metal Products Finished Products Other Consolidated
2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 035 91 759 260 832 253 655 124 395 123 700 43 609 29 261 470 871 498 375
Unallocated assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 510 72 620
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 381 570 995
Segment liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 159 19 921 26 861 20 772 25 726 22 442 10 151 6 633 73 897 69 768
Unallocated liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 504 223 407
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 401 293 175
Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 630 20 767 10 346 1 657 1 455 1 130 1 971 951 21 402 24 505
F-36
Major non-cash items:

Excess of the interest in the net fair value of identifiable
assets, liabilities and contingent liabilities acquired over
cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 90 026 — 10 003 — 1 007 — 101 036
Depreciation/amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8 532) (7 914) (10 676) (8 949) (1 531) (1 435) (1 106) (678) (21 845) (18 976)
Impairment losses and valuation allowances . . . . . . . . . . . . . (810) (1 728) (99) (790) (297) (7 758) (121) (31) (1 327) (10 276)
Total unallocated major non-cash items . . . . . . . . . . . . . . . . . (393) (1 131)
Total major non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . (23 565) 70 653
Geographical segments
Poland Other countries Unallocated Consolidated
2005 2004 2005 2004 2005 2004 2005 2004
Revenue from external customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823 189 965 163 153 047 229 735 — — 976 236 1 194 898
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 223 100 996 21 303 13 030 469 885 456 969 592 381 570 995
ZŁOMREX S.A.
3. Acquisitions of subsidiaries
Acquisition of Zakład Walcowniczy “Walcownia Bruzdowa” Sp. z o.o.
On 13 January 2005, the Group acquired all the shares in Zakład Walcowniczy “Walcownia Bruzdowa”
Sp. z o.o. for PLN 5 thousand, satisfied in cash. The company is engaged in processing of metal products for the
parent entity. For the period since the acquisition date to 31 December 2005, the subsidiary contributed a net loss
of PLN 4,665 thousand to the consolidated net result for the year.
Effect of acquisition:
liabilities.
Fair value of the acquiree’s net assets at the acquisition date

Recognised
values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,003
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,233
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,150
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,610)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,894)
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,899
Consideration paid, satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5)
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
Cash acquired following the acquisition of a subsidiary, net of cash paid . . . . 325
Goodwill has arisen on the acquisition of Zakład Walcowniczy “Walcownia Bruzdowa” Sp. z o.o. and
comprises production and technological know-how that did not meet the criteria for recognition as a separate
intangible asset at the date of acquisition.
Acquisition of “Odlewnia Metali Szopienice” Sp. z o.o.

On 31 July 2004, the Group acquired all the shares in “Odlewnia Metali Szopienice” Sp. z o.o. for
PLN 440 thousand, satisfied in cash. The company deals with manufacturing of non-ferrous metal alloys
products. For the period since the acquisition date to 31 December 2004 and for 2005, the subsidiary contributed
net profit of PLN 287 thousand and PLN 1,677 thousand to the consolidated net results respectively.
liabilities.
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ZŁOMREX S.A.

Recognised values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,643
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,792
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Interest bearing payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,200)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (266)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,865)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,452
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Excess of the interest in the net fair value of identifiable assets and
liabilities over cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,008
Consideration paid, satisfied in cash* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (444)
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (240)
After reassessment of the identification and measurement of the acquiree’s identifiable assets, liabilities
and contingent liabilities and the measurement of the cost of the acquisition, the excess of the acquirer’s interest
in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost was
recognised immediately in the consolidated net result of the Group for 2004.
Acquisition of “Ferrostal Łabe˛dy” Sp. z o.o.

On 19 February 2004, the Group acquired 82.6% of the shares in “Ferrostal Łabe˛dy” Sp. z o.o. for PLN
18,069 thousand including PLN 500 thousand paid in cash and PLN 17,569 thousand payable in cash with
deferred payment terms i.e. in instalments from March 2005 to December 2005. Legal and other fees directly
connected with the acquisition amounted to PLN 788 thousand.
On 5 May 2004, the Group acquired an additional 8.84% of the shares in “Ferrostal Łabe˛dy” Sp. z o.o. for
PLN 1,932 thousand payable in cash with deferred payment terms i.e. in instalments from March 2005 to
December 2005. Legal and other fees directly connected with the acquisition amounted to PLN 20 thousand.
As the payable for the shares is an interest bearing liability, the fair value of this deferred consideration
approximates its nominal value.
For the period since the acquisition date to 31 December 2004 and for 2005, the subsidiary contributed a
net profit of PLN 19,193 thousand and PLN 17,108 thousand to the consolidated net results respectively.
liabilities.
F-38
ZŁOMREX S.A.

Acquisition of shares as at Acquisition of shares as
19 February 2004 at 5 May 2004
Recognised values Recognised values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,528 209,048
Prepaid perpetual legal rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,286 4,297
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,074 3,973
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608 608
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,822 23,921
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,455 26,886
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,488 1,138
Interest bearing payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61,265) (81,410)
Deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,545) (3,160)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,230) (2,210)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67,273) (44,479)
Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2 159) (3,099)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . 131,789 135,513
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,60% 8,84%
Net identifiable assets and liabilities acquired . . . . . . . . . . . . . . . . 108,858 11,979
Excess of the interest in the net fair value of identifiable assets
and liabilities over cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,001 10,027
Fair value of consideration* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,857) (1,952)
Total fair value of consideration (19 February and 5 May 2004),
including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,809)
Consideration paid in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,308)
Consideration payable in next periods . . . . . . . . . . . . . . . . . . . . . . (19,501)
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,488
Cash acquired following the acquisition of a subsidiary, net of
cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
* Include legal fees and other fees amounting to PLN 788 thousand as at 19 February 2004 and PLN 20
thousand as at 5 May 2004.
After reassessment of the identification and measurement of the acquiree’s identifiable assets, liabilities
and contingent liabilities and the measurement of the cost of the acquisition, the excess of acquirer’s interest in
the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost was
recognised immediately in the consolidated net result of the Group for 2004.
If all of the acquisitions that took place in 2004 had occurred on 1 January 2004, management estimates
that consolidated revenue would have been PLN 1,209,174 thousand and consolidated profit for 2004 would have
been PLN 204,234 thousand.
As the financial statements of Zakład Walcowniczy “Walcownia Bruzdowa” Sp. z o.o., Odlewnia Metali
Szopienice Sp. z o.o. and Ferrostal Łabe˛dy Sp. z o.o. were not maintained in accordance with IFRS, it was
impracticable to determine the carrying amounts of the assets and liabilities of those companies immediately
prior to the acquisition in accordance with IFRS.
Other acquisitions:
On 15 June 2004, the Group established Nowa Jakość — Organizacja Odzysku S.A. by contribution in
cash of PLN 900 thousand for 90% of the shares in this entity. The scope of activity of Nowa Jakość —
Organizacja Odzysku S.A. includes purchasing, packaging and reselling of paper and plastic waste for further
F-39
ZŁOMREX S.A.

production. For the period since incorporation to 31 December 2004 the subsidiary contributed a net loss of PLN
124 thousand to the consolidated net result for the year.
In January 2005, the Group acquired 10% of the shares of Nowa Jakość — Organizacja Odzysku S.A. for
PLN 101 thousand satisfied in cash, increasing its investment in this entity to 100% of its share capital. For 2005
the subsidiary contributed a net loss of PLN 1,435 thousand to the consolidated net result for the year.
In January 2005, the Group acquired 94.8% of the shares in Złomrex Finans Sp. z o.o. for PLN
159 thousand satisfied in cash, increasing its investment in this entity to 100% of the share capital. The
company’s scope of activity includes mainly financial and advisory services. For the period since the acquisition
date to 31 December 2005 the subsidiary’s net loss amounted to PLN 32 thousand.
4. Other income
2005 2004
Release of unused accruals for other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 1 209
Compensations and penalties received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 448
Surpluses in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 489 19
Insurance indemnities losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 463
Forgiven liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 75
Reimbursed of cost of court proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 150
Net gain on disposal of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 337 116
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 292
3 531 2 772
5. Other expenses
2005 2004
Bad debt expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (126) (409)
Impairment of property, plant and equipment under construction . . . . . . . . . . . . . . . . . . (639) —
Other accrued costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (855) —
Cost related to listing of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (965) (794)
Inventory shortages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (243) (247)
Costs of court proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (286) (315)
Contractual penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (207) (491)
Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (847) (54)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (557) (551)
(4 725) (2 861)
6. Personnel expenses
2005 2004
Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29 130) (20 497)
Compulsory social security contributions and other benefits . . . . . . . . . . . . . . . . . . . . . . (6 692) (4 641)
Decrease/(increase) in liability for retirement awards . . . . . . . . . . . . . . . . . . . . . . . . . . . (54) 377
Decrease/(increase) in liabilities related to unused holiday leave . . . . . . . . . . . . . . . . . . (791) 190
(36 667) (24 571)
F-40
ZŁOMREX S.A.
7. Net financing costs

2005 2004
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 743 3 844
Net foreign exchange gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 811
Forgiven financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 1 879
Other investments:
Net gain on disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 1 039
Net gain on remeasurement of financial instruments at fair value through profit or
loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 119
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 69
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 815 8 761
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16 851) (15 006)
Bank fees and commissions (settled using the effective interest rate method) . . . . . . . . . (1 962) (2 153)
Net foreign exchange loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 546) —
Impairment loss on other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (328)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (493) (160)
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20 852) (17 647)
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17 037) (8 886)
8. Income tax expense

Recognised in the income statement
2005 2004
Current tax expense
Current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 245) (18 814)
Deferred tax expense
Origination and reversal of temporary differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2 853) 15 155
Total income tax expense in the income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4 098) (3 659)
Reconciliation of effective tax rate
2005 2005 2004 2004

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 20 968 100% 208 542
Income tax using the domestic corporation tax rate . . . . . . . . . (19.0)% (3 984) (19.0)% (39 623)
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.8)% (390) (0.0)% (126)
Tax exempt revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 276 11.4% 23 963
Effect of tax losses previously not recognised . . . . . . . . . . . . . — — 5.8% 12 127
(19.5)% (4 098) (1.8)% (3 659)
Tax exempt revenues in 2004 relate to excess of interest in the net fair value of identifiable assets and
liabilities over cost of the acquisition (refer to note 3)
9. Current tax assets and liabilities

The current tax payable of PLN 1,065 thousand (2004: PLN 4,320 thousand) represents the amount due to
the tax authorities with regard to the income tax liabilities for the current and prior year less prepayments.
F-41
ZŁOMREX S.A.

Plant and Fixtures Under
Land Buildings equipment Vehicles and fittings construction Total
Cost
Balance at 1 January 2004 . . . . . . . . 488 7 889 23 712 11 885 433 — 44 407
Acquisitions through business
combinations . . . . . . . . . . . . . . . . . 165 57 353 151 320 123 1 265 559 210 785
Other acquisitions . . . . . . . . . . . . . . . — — 9 878 8 372 — 10 055 28 305
Transfer from fixed assets under
construction . . . . . . . . . . . . . . . . . . 62 3 795 4 420 326 1 377 (9 980) —
Disposals . . . . . . . . . . . . . . . . . . . . . . — — (180) (229) (626) — (1 035)
Balance at 31 December 2004 . . . . . 715 69 037 189 150 20 477 2 449 634 282 462
Balance at 1 January 2005 . . . . . . . . 715 69 037 189 150 20 477 2 449 634 282 462
Acquisitions through business
combinations . . . . . . . . . . . . . . . . . — — — 12 — 991 1 003
Other acquisitions . . . . . . . . . . . . . . . — — 6 534 7 192 293 18 505 32 524
Transfer from fixed assets under
construction . . . . . . . . . . . . . . . . . . 27 1 590 7 805 483 82 (9 987) —
Disposals . . . . . . . . . . . . . . . . . . . . . . — (172) (881) (571) (62) — (1 686)
Balance at 31 December 2005 . . . . . 742 70 455 202 608 27 593 2 762 10 143 314 303
Depreciation and impairment

losses
Balance at 1 January 2004 . . . . . . . . — (574) (3 490) (2 220) (112) — (6 396)
Depreciation charge for the year . . . . — (2 488) (11 995) (3 651) (514) — (18 648)
Disposals . . . . . . . . . . . . . . . . . . . . . . — — 108 36 626 — 770
Balance at 31 December 2004 . . . . . — (3 062) (15 377) (5 835) — — (24 274)
Balance at 1 January 2005 . . . . . . . . — (3 062) (15 377) (5 835) — — (24 274)

Depreciation charge for the year . . . . — (3 073) (13 285) (4 759) (189) — (21 306)
Impairment losses . . . . . . . . . . . . . . . — — — — — (639) (639)
Disposals . . . . . . . . . . . . . . . . . . . . . . — 34 613 236 44 — 927
Balance at 31 December 2005 . . . . . — (6 101) (28 049) (10 358) (145) (639) (45 292)
Carrying amounts
At 1 January 2004 . . . . . . . . . . . . . . . 488 7 315 20 222 9 665 321 — 38 011
At 31 December 2004 . . . . . . . . . . . . 715 65 975 173 773 14 642 2 449 634 258 188
At 1 January 2005 . . . . . . . . . . . . . . . 715 65 975 173 773 14 642 2 449 634 258 188
At 31 December 2005 . . . . . . . . . . . . 742 64 354 174 559 17 235 2 617 9 504 269 011
Leased plant and machinery

The Group leases certain production equipment and vehicles under a number of finance lease agreements.
At the end of each of the leases the Group has the option to purchase the equipment at a beneficial price. At
31 December 2005, the net carrying amount of leased plant and machinery was PLN 34,230 thousand (2004:
PLN 30,885 thousand). The leased equipment secures lease obligations (see note 20).
Collaterals
At 31 December 2005, property, plant and equipment with a carrying value of PLN 159,879 thousand
(2004: PLN 174,455 thousand) were provided as collateral for bank loans and overdrafts.
Property, plant and equipment under construction
The major investment presented as fixed assets under construction at 31 December 2005 relates to the
modernisation of a furnace aimed at a reduction in energy consumption and decreasing waste gas production.
Total expenses capitalised on this project at 31 December 2005 amounted to PLN 6.1 million.
Impairment loss
During 2005 the Group recognised impairment losses of PLN 639 thousand related to abandoned projects
under construction.
F-42
ZŁOMREX S.A.
11. Intangible assets

Development Software and
Goodwill costs other Total
Cost
Balance at 1 January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 11 259 — 277 11 536
Acquisitions through business combinations . . . . . . . . . . . . — 5 067 162 5 229
Other acquisitions — internally developed . . . . . . . . . . . . . — — 67 67
Balance at 31 December 2004 . . . . . . . . . . . . . . . . . . . . . . . 11 259 5 067 506 16 832
Balance at 1 January 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . 11 259 5 067 506 16 832

Acquisitions through business combinations . . . . . . . . . . . . 3 899 — — 3 899
Other acquisitions — internally developed . . . . . . . . . . . . . — 1 617 203 1 820
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (171) (171)
Balance at 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . 15 158 6 684 538 22 380
Amortisation and impairment losses

Balance at 1 January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . (1 032) — (69) (1 101)
Amortisation for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . — (505) (186) (691)
Balance at 31 December 2004 . . . . . . . . . . . . . . . . . . . . . . . (1 032) (505) (255) (1 792)
Balance at 1 January 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . (1 032) (505) (255) (1 792)

Amortisation for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . — (624) (182) (806)
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 171 171
Balance at 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . (1 032) (1 129) (266) (2 427)
Carrying amounts
At 1 January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 227 — 208 10 435
At 31 December 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 227 4 562 251 15 040
At 1 January 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 227 4 562 251 15 040

At 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 126 5 555 272 19 953
Amortisation and impairment charge

The amortisation and impairment charge is recognised in the following line items in the income
statement:
2005 2004
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (764) (646)
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) (11)
Administration expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (34)
(806) (691)
Impairment tests for cash-generating units containing goodwill

The following units have significant carrying amounts of goodwill:
2005 2004
Scrap metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,488 8,488
Semi-Finished Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 887
Finished Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,751 852
14,126 10,227
F-43
ZŁOMREX S.A.
11. Intangible assets (continued)

The scrap metal unit represents the activity of the Group connected with the purchase and re-sale of scrap
metals and is primarily associated with the previous operations of POSW Złomrex — a business acquired by the
Group in 2003. The acquisition resulted in generation of goodwill of PLN 11,259 thousand (net value at
31 December 2004 and 31 December 2005) including PLN 8,488 thousand allocated to the scrap metal unit.
The recoverable amount of the scrap metal unit is based on the value in use calculations. Those
calculations use cash flow projections based on actual operating results and the five-year business plan. Cash
flows for a further 5 -year period are extrapolated based on the cash flows from the fifth year of projection and
represent the remaining useful life of tangible fixed assets of this unit. A pre-tax discount rate of 10% per cent
has been used in discounting the projected cash flows.
The recoverable amount of the unit calculated on the basis of the above test is higher than its carrying
amount including goodwill associated with this unit.
The semi-finished products unit represents the activity of the Group connected with the purchase and
processing of scrap metal into steel billets. This unit mainly represents the operations of Ferrostal
Łabe˛dy Sp. z o.o. — the subsidiary acquired in 2004. The goodwill allocated to this unit represents the portion of
goodwill associated with the acquisition of POSW Złomrex which reflects the benefits obtained by the semi
finished products unit as a result of the POSW Złomrex acquisition.
The recoverable amount of the semi-finished products unit is based on the value in use calculations.
Those calculations use cash flow projections based on actual operating results and the five-year business plan.
Cash flows for a further 15-year period are extrapolated based on the cash flows from the fifth year of projection
and represent the remaining useful life of the tangible fixed assets of this unit. A pre-tax discount rate of 10% per
cent has been used in discounting the projected cash flows.
The finished products unit represents the activity of the Group connected with the purchase and
processing of scrap metal into steel billets which are subsequently re-processed into steel rods and steel sheets.
This unit represents the operations of two subsidiaries: Ferrostal Łabe˛dy Sp. z o.o. acquired in 2004 and Zakłady
Walcownicze “Walcownia Bruzdowa” Sp. z o.o. acquired in 2005. The goodwill allocated to this unit mainly
represents goodwill recognised on acquisition of Zakłady Walcownicze “Walcownia Bruzdowa” Sp. z o.o. of
PLN 3,899 thousand and the portion of goodwill associated with the acquisition of POSW Złomrex which
reflects the benefits obtained by the finished products unit as a result of the POSW Złomrex acquisition.
The recoverable amount of the finished products unit is based on the value in use calculations. Those
calculations use cash flow projections based on actual operating results and the five-year business plan. Cash
flows for a further 15-year period are extrapolated based on the cash flows from the fifth year of projection and
represent the remaining useful life of the tangible fixed assets of this unit. A pre-tax discount rate of 10% per
cent has been used in discounting the projected cash flows.
12. Investment property

2005 2004
Balance at 1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 —
Acquisitions through business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 608
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5)
Balance at 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 603
F-44
ZŁOMREX S.A.
13. Other investments

2005 2004
Non-current investments
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 349 3 773
Prepayment for shares acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974 —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 27
3 508 3 800
Current investments
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 769 1 200
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 161
1 976 1 361
An impairment loss amounting to PLN 328 thousand in respect of non-current loans granted was
recognised in 2004 due to financial difficulties of the borrower.
14. Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
2005 2004 2005 2004 2005 2004
Property, plant and equipment . . . . . . . . . . . . . . . . 1 100 — (14 006) (12 851) (12 906) (12 851)
Investment property . . . . . . . . . . . . . . . . . . . . . . . . 75 75 — — 75 75
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . 62 62 (79) (59) (17) 3
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 2 023 — — 395 2 023
Trade and other receivables . . . . . . . . . . . . . . . . . . 72 122 (90) (172) (18) (50)
Interest bearing loans and borrowings . . . . . . . . . . 4 609 4 950 (472) (760) 4 137 4 190
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 500 402 — — 500 402
Deferred government grants . . . . . . . . . . . . . . . . . . 173 — — — 173 —
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 181 — — 135 181
Trade and other payables . . . . . . . . . . . . . . . . . . . . 2 501 599 (2) — 2 499 599
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 371 (22) (4) (10) 367
Tax value of loss carry-forwards recognised . . . . . 15 882 18 748 — — 15 882 18 748
Tax assets/(liabilities) . . . . . . . . . . . . . . . . . . . . . . . 25 516 27 533 (14 671) (13 846) 10 845 13 687
Set off of tax assets/liabilities . . . . . . . . . . . . . . . . . (14 671) (13 846) 14 671 13 846 — —
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . 10 845 13 687 — — — —
Movement in temporary differences during the year

Recognised
Balance Recognised in business Balance
1 Jan 04 in income combinations 31 Dec 04
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3 687) (1 530) (7 634) (12 851)
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 75 — 75
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) 24 — 3
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 023 — 2 023
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (128) 78 — (50)
Interest bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . 3 745 1 259 (814) 4 190
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 402 — 402
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 181 — 181
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 510 — 599
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6 361 367
Tax value of loss carry-forwards expected to be utilised . . . . . . . . . 23 12 127 6 598 18 748
21 15 155 (1 489) 13 687
F-45
ZŁOMREX S.A.
14. Deferred tax assets and liabilities (continued)

Recognised Balance
Balance Recognised in business 31 Dec
1 Jan 05 in income combinations 05
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12 851) (55) — (12 906)
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 — — 75
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (20) — (17)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 023 (1 628) — 395
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50) 32 — (18)
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . 4 190 (53) — 4 137
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 98 — 500
Deferred government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 173 — 173
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 (46) — 135
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599 1 900 — 2 499
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367 (388) 11 (10)
Tax value of loss carry-forwards expected to be utilised . . . . . . . . 18 748 (2 866) — 15 882
13 687 (2 853) 11 10 845
Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:
2005 2004
Tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,435 131
The tax losses are related to subsidiary — Nowa Jakość — Organizacja Odzysku S.A. The tax losses
expire in 2009 (PLN 131 thousand) and 2010 (PLN 1,304 thousand). Deferred tax assets have not been
recognised in respect of these items because it is not probable that future taxable profit will be available against
which the subsidiary can utilise the benefits therefrom.
15. Inventories
2005 2004
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 744 29 216
Semi-finished goods and work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 597 343
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 498 15 910
Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 793 66 996
103 632 112 465
Inventories are presented net of allowances amounting to PLN 1,807 thousand (2004: PLN 10,649
thousands). Allowances related mainly to merchandises and finished goods with the net realisable value below
cost. The write-down and reversal are included in cost of sales.
As at 31 December 2005, inventories with a carrying value of PLN 84,476 thousand (2004: PLN 67,250
thousand) were subject to pledges as collateral for bank loans and overdrafts.
16. Trade and other receivables

2005 2004
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 526 114 026
Bills of exchange receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 360 11 706
Statutory receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 078 17 169
Other receivables and prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 834 6 366
153 798 149 267
Trade receivables are presented net of allowances for doubtful debts amounting to PLN 7,344 thousand
(2004: PLN 9,870 thousand). The allowances were recognised due to expected difficulties with the collection of
amounts due.
F-46
ZŁOMREX S.A.
16. Trade and other receivables (continued)

At 31 December 2005, receivables with a carrying value of PLN 20,000 thousand (2004: PLN 56,400
thousand) were provided as collateral for bank loans and overdrafts.
At 31 December 2005, other receivables and prepayments include prepayments of PLN 1,470 thousand
(2004: PLN 482 thousand) relating to fixed assets under construction.
At 31 December 2005, other receivables and prepayments include prepayments of PLN 2,276 thousand
(2004: PLN 1,544 thousand) relating to future deliveries of inventories.
17. Cash and cash equivalents
2005 2004
Cash in bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 619 3 075
Cash in hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 367
Short-term bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 500 1 000
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 623 4 442
Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29 141) (35 559)
Cash and cash equivalents in the statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . (14 518) (31 117)
At 31 December 2005, a bank deposit of PLN 500 thousand (2004: nil) was provided as collateral for a
bank loan.
18. Capital and reserves

Issued share capital
At 31 December 2005, the parent Company’s share capital comprised 47,691,000 ordinary shares (2004:
47,691,000) with a nominal value of PLN 1 each.
At 31 December 2005 and 31 December 2004, the parent Company was wholly-owned by
Mr. Przemysław Sztuczkowski.
19. Earnings per share

Basic earnings per share
The calculation of basic earnings per share at 31 December 2005 was based on the profit attributable to
ordinary shareholders of PLN 15,304 thousand (2004: PLN 201,963 thousand) and a weighted average number of
ordinary shares outstanding during the year ended 31 December 2005 of 47,691,000 (2004: 47,691,000).
As at 31 December 2005 and 31 December 2004 there were no factors that would result in dilution of
earnings per share.
F-47
ZŁOMREX S.A.
20. Interest-bearing loans and borrowings

This note provides information about the contractual terms of the Group’s interest-bearing loans and
borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see
note 24.
2005 2004
Non-current liabilities
Secured bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 911 40 615
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 097 19 773
Other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 645 2 645
52 653 63 033
Current liabilities
Current portion of secured bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 750 64 590
Current portion of finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 682 6 619
Factoring liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 730 18 783
Other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 719
129 194 90 711
Repayment schedule of secured bank loans and other borrowings

Less than one Between one Between three More than
Total year and three years and five years five years
Secured bank loans . . . . . . . . . . . . . . . . . . . . . . 119 661 91 750 17 193 10 718 —
Other borrowings . . . . . . . . . . . . . . . . . . . . . . . 2 677 32 2 645 — —
122 338 91 782 19 838 10 718 —
Finance lease liabilities

Finance lease liabilities are payable as follows:
Minimum Minimum
lease lease
payments Interest Principal payments Interest Principal
2005 2005 2005 2004 2004 2004
Less than one year . . . . . . . . . . . . . . . . . . . 9 834 1 152 8 682 7 855 1 236 6 619
Between one and five years . . . . . . . . . . . . 23 444 1 347 22 097 21 344 1 571 19 773
33 278 2 499 30 779 29 199 2 807 26 392
There are no contingent rentals payable under the terms of the lease agreements.
21. Employee benefits

2005 2004
Liability for retirement awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 616 1 974
Total employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 616 1 974
Balance at 1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 974 —

Employee benefits in acquired entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 496
Provisions raised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 199
Provisions utilised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (412) (145)
Provisions released during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83) (576)
Balance at 31 December 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 616 1 974
F-48
ZŁOMREX S.A.
21. Employee benefits (continued)

The expense is recognised in the following line items in the income statement:
2005 2004
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (137) 280
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 97
(54) 377
22. Provisions
2005 2004
Balance at 1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954 —
Provisions in acquired entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 159
Provisions raised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678 4
Provisions utilised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (498) —
Provisions released during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (426) (1 209)
Balance at 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 954
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 954
The provisions, among others include penalties of PLN 350 thousand for excessive emission of polluting
gases. These are under dispute with the authorities.
23. Trade and other payables

2005 2004
Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 405 67 443
Statutory payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 501 2 027
Bills of exchange payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 750
Payables in relation to acquisition of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 20 752
Other non-trade payables and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 887 2 303
80 793 96 275
24. Financial instruments

Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s business.
Credit risk
Financial instruments that potentially subject the Group to concentrations of credit risk consist principally
of cash and cash equivalents and receivables. The Group places its cash and cash equivalents in financial
institutions with high credit ratings. The credit risk related to receivables is limited as the Group’s customer base
is wide, thus the concentration of credit risk is insignificant.
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure
to credit risk is represented by the carrying amount of each financial asset in the balance sheet.
Foreign currency risk

The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in
a currency other than the Polish zloty. The currency giving rise to this risk is primarily the euro.
In relation to significant transactions denominated in foreign currency the Group uses forward exchange
contracts to hedge its foreign currency risk. As at 31 December 2005, the exposure to foreign currency cash flow
risk was not hedged.
F-49
ZŁOMREX S.A.
24. Financial instruments (continued)

Interest rate risk
In managing interest rate risk the Group aims to reduce the impact of short-term fluctuations on the
Group’s earnings. Over the longer-term, however, permanent changes in interest rates would have an impact on
consolidated earnings.
The Group uses derivative financial instruments to hedge its exposure to interest rate risk arising from
operational, financing and investment activities. The net fair value of interest swaps as at 31 December 2005 was
PLN 207 thousand (2004: PLN 119 thousand) comprising of assets of PLN 207 thousand (2004: PLN 119
thousand). These amounts were recognised as fair value derivatives.
At 31 December 2005, it is estimated that a general increase of one percentage point in interest rates
would decrease the Group’s profit before tax by approximately PLN 2,017 thousand (2004: PLN 1,484
thousand).
Fair values
The following are details of the fair values of the financial instruments for which it is practicable to
estimate such value:
Š Cash and cash equivalents, short-term bank deposits and short-term bank loans. The carrying amounts
approximate fair value because of the short term nature of these instruments.
Š Trade and other receivables, bills of exchange, trade and other payables and accrued liabilities. The
carrying amounts approximate fair value because of the short-term nature of these instruments.
Š Interest bearing loans and borrowings. The carrying amounts approximate fair value due to the
variable nature of the related interest rates.
F-50
ZŁOMREX S.A.
24. Financial instruments (continued)
Effective interest rates and repricing analysis

In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and
the periods in which they reprice.
2005 2004
Effective Less than 1-2 2-5 More than Effective Less than 1-2 2-5 More than
interest rate Total 1 year years years 5 years interest rate Total 1 year years years 5 years
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 118 1 769 1 200 700 449 4 973 1 200 1 200 1 900 673
PLN fixed rate loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00% 3 266 1 366 1 200 700 — 8.00% 4 300 1 200 1 200 1 900 —
PLN fixed rate loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.00% 449 — — — 449 11.00% 673 — — — 673
PLN fixed rate loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00% 403 403 — — — — — — — —
Cash and cash equivalents: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 119 14 119 — — — 4 075 3 985 — — —
Cash in bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~0.21% 3 619 3 619 — — — ~0.14% 3 075 2 985 — — —
PLN short-term bank deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.59% 500 500 — — — 4.6% 1 000 1 000 — — —
PLN short-term bank deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1% 10 000 10 000 — — — — — — — —
F-51
Secured bank loans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 661 119 661 — — — 105 205 105 205 — — —
PLN floating rate loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35% 5 962 5 962 — — — 7.31% 24 858 24 858 — — —
PLN floating rate loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10% 22 548 22 548 — — — 8.16% 22 872 22 872 — — —
EUR floating rate loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.49% 3 262 3 262 — — — 5.65% 77 77 — — —
CHF floating rate loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20% 1 551 1 551 — — —
Factoring liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 730 28 730 — — — 18 783 18 783 — — —
PLN floating rate factoring liabilities . . . . . . . . . . . . . . . . . . . . . . . 5.60% 3 423 3 423 — — — 8.16% 3 454 3 454 — — —
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 779 8 682 15 571 6 526 — 26 392 6 619 12 491 7 282 —
CHF fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 2.43%-3.66% 16 387 3 721 7 747 4 919 — 2.43%-3.66% 6 738 1 458 3 006 2 274 —
CHF fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 3.66%-4.91% 7 851 2 846 4 171 834 — 3.66%-4.91% 10 572 2 803 5 714 2 055 —
CHF fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 4.91%-6.17% 5 869 1 770 3 340 759 — 4.91%-6.17% 7 748 1 682 3 259 2 807 —
CHF fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 6.17%-6.80% 67 67 — — — 6.17%-6.80% 112 34 78 — —
CHF fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 12.68%-13.35% 45 45 — — — 12.68%-13.35% 203 109 94 — —
EUR fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 17.46%-18.16% 441 142 299 — — 17.46%-18.16% 581 127 308 146 —
PLN fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 10.03%-10.69% 48 20 14 14 — 12.68%-13.35% 32 32 — — —
PLN fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 12.68%-13.35% 45 45 — — — 17.46%-18.16% 62 30 32 — —
PLN fixed rate finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . 17.46%-18.16% 26 26 — — — 38.48%-39.29% 344 344 — — —
Other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.85% 2 677 32 — 2 645 — 6.89% 3 364 719 — 2 645 —
ZŁOMREX S.A.
25. Capital commitments

During 2004, the Group entered into a contract to purchase services relating to the modernisation of the
furnace. With respect to this contract, as at 31 December 2005 the Group was committed to incur capital
expenditures of EUR 284 thousand (2004: EUR 855 thousand). This commitment is expected to be settled in the
following financial year.
26. Contingencies, guarantees and other commitments

The Group has following contingent liabilities, guarantees and other commitments:
Contingencies
Š Employees claims for benefits of PLN 188 thousand.
Guarantees
Guarantee in favour of HSW Walcownia Blach Sp. z o.o. up to PLN 681 thousand.
Bill of exchange guarantee in favour of Huta Łabe˛dy S.A. up to PLN 2.1 million.
Other commitments
Š Conditional contract to purchase shares in HSW Huta Stali Jakościowych Sp. z o.o. concluded with
HSW Zakład Metalurgiczny Sp. z o.o. amounting to PLN 160 million. The realisation of suspension
clauses commenced on 27 January 2006.
Š Conditional contract to purchase shares in HSW Walcownia Blach Sp. z o.o. concluded with HSW
Zakład Metalurgiczny Sp. z o.o. amounting to PLN 33 million. The realisation of suspension clauses
commenced on 6 January 2006.
Š Contractual commitment to purchase advisory services of PLN 700 thousand from “Prymko”
Krzysztof Walarowski in future periods.
27. Related parties

Identity of related parties
The Group has a related party relationship with the companies controlled by the parent Company’s
Management Board members and with the members of the Management and Supervisory Boards of the Group
entities.
Transactions and balances with the companies controlled by the parent Company’s Management Board
members
2005 2004
PRYMKO
Purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 351
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 —
Przedsie˛biorstwo Wiedza i Praca
Sales of goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18
Interest on loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 243
Purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 855 6 493
Fixed assets purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 26
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 266 4 300
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 —
Armaton Polska Sp. z o.o.
Sales of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 14
Interest on loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 88
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449* 673*
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1
* net of impairment loss amounting to PLN 328 thousand
F-52
ZŁOMREX S.A.
27. Related parties (continued)

Przedsie˛biorstwo Wiedza i Praca and Armaton Polska Sp. z o.o. represent companies wholly-owned by
Mr. Przemysław Sztuczkowski, the parent Company’s sole-shareholder and the President of the Management
Board. The main scope of co-operation with Wiedza i Praca is related to purchase of administration,
management, cleaning, security and other services by the Group.
The loan granted to Przedsie˛biorstwo Wiedza i Praca is subject to a fixed 8% interest rate and the
principal is to be repaid in monthly installments of PLN 100 thousand.
The loan granted to Armaton Polska Sp. z o.o. is subject to fixed 10,8% interest rate and the principal is
to be repaid until 2012. The impairment write-off of PLN 328 thousand recognised as at 31 December 2005 is a
result of the management assessment as to the financial condition of the borrower taking into consideration the
planned liquidation of this entity in the future.
PRYMKO is wholly-owned by Mr. Krzysztof Walarowski, the parent Company’s Management Board
member. The main scope of co-operation with this entity is related to the purchase of consulting services by the
Group.
Transactions with the members of the Management and Supervisory Boards

The remuneration of the Management and Supervisory Boards members was as follows:
2005 2004
Management Board of the parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 954 3 779
Supervisory Board of the parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 110
Management Boards of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 592 798*
Supervisory Boards of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 104*
5 962 4 791
* The remuneration relates to the period starting from obtaining control of subsidiaries.
Additionally, one of the parent Company’s Management Board members is entitled to an annual bonus
amounting to 1% of the Group’s consolidated net profit, towards which a provision of PLN 150 thousand was
recognised in the income statement.
28. Subsequent events

Acquisition of HSW Huta Stali Jakościowych Sp. z o.o. and HSW Walcownia Blach Sp. z o.o.
In January 2006, the Group acquired all of the shares in HSW Huta Stali Jakościowych Sp. z o.o. and
HSW Walcownia Blach Sp. z o.o. for PLN 193,000 thousand, including PLN 130,000 thousand paid in cash on
acquisition and PLN 63,000 thousand payable in cash with deferred payment terms i.e. in instalments from
January 2006 to January 2011. Legal and other fees directly connected with the acquisition amounted to PLN
1,853 thousand. The business acquired is involved in manufacturing and processing of high quality metal
products. The acquisition covered two separate legal entities which were acquired within the scope of the same
transaction. The effect of acquisition was accounted for as related businesses.
The payable for the shares is an interest-free liability and the fair value of this consideration was
estimated at the acquisition date at PLN 185,710 thousand (including the deferred tax impact of PLN 1,710
thousand).
liabilities.
F-53
ZŁOMREX S.A.
28. Subsequent events (continued)

Acquiree’s net assets at the acquisition date
Recognised
values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,173
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,748
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,810
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,761
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,721
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,933
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,196)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,939)
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,081)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,910)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,563
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Total fair value of consideration* including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (187,563)
Consideration paid, satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (136,653)
Consideration payable in the next periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,910)
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,933
Cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (131,720)
* Include legal fees and other fees amounting to PLN 1,853 thousand.
In order to finance the acquisition of HSW Huta Stali Jakościowych Sp. z o.o. and HSW Walcownia
Blach Sp. z o.o. the Group has drawn a loan of PLN 120,000 thousand. The loan facility was arranged in 2005
with a consortium of three banks including Bank Przemysłowo Handlowy S.A., Bank Polska Kasa Opieki S.A.
and Bank Handlowy w Warszawie S.A.
Acquisition of Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski

In March 2006, the Group acquired all of the shares in Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski for
PLN 56,000 thousand satisfied in cash. Legal and other fees directly connected with the acquisition amounted to
PLN 422 thousand. The company acquired is involved in trading in metal products.
liabilities.
F-54
ZŁOMREX S.A.

Acquiree’s net assets at the acquisition date
Recognised
values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,069
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,899
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,238
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,198
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,519)
Government grants and deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,999
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Consideration paid, satisfied in cash* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,422)
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,198
Cash outflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,224)
As the financial statements of HSW Huta Stali Jakościowych Sp. z o.o., HSW Walcownia Blach
Sp. z o.o. and Przedsie˛biorstwo Państwowe Centrostal Górnośla˛ski were not maintained in accordance with
IFRS, it was impracticable to determine the carrying amounts of the assets and liabilities of those companies
immediately prior to the acquisition in accordance with IFRS.
Other acquisitions:
On 7 August 2006, following a series of shares acquisitions (50.44% in total), including the acquisition of
SteelCo Sp. z o.o., which holds the shares in Centrostal Gdańsk S.A., the parent Company obtained control of
Centrostal Gdańsk S.A. The value of the transactions amounted to PLN 10.5 million. Centrostal Gdańsk S.A. is
involved in trading in metal products. SteelCo Sp. z o.o. does not conduct any business activities. As at the date
of this reporting, the Group has not established the fair value of the net identifiable assets and liabilities and
contingent liabilities acquired. As the financial statements of Centrostal Gdańsk S.A. were not maintained in
accordance with IFRS, it was impracticable to determine the carrying amounts of the assets and liabilities of
those companies immediately prior to the acquisition in accordance with IFRS.
Following a series of transactions, the Parent Company obtained control of Centrostal Opole S.A. with a
shareholding of 94.0%. The value of the transactions amounted to PLN 2.8 million. The company acquired deals
with trading of metal products. As at the date of this reporting, the Group has not established the fair value of the
net identifiable assets and liabilities and contingent liabilities acquired. As the financial statements of Centrostal
Opole S.A. were not maintained in accordance with IFRS, it was impracticable to determine the carrying
amounts of the assets and liabilities of this company immediately prior to the acquisition in accordance with
IFRS.
On 4 January 2006, the Group acquired 51% of the shares in Kapitał Sp. z o.o. for PLN 401 thousand
satisfied in cash. The company’s scope of activity includes mainly financial and advisory services. As a result of
the acquisition, goodwill of PLN 96 thousand was recognised.
On 1 March 2006, the Group established Złomrex China Limited by contribution in cash of PLN
1 thousand for 100% of the shares in this entity. The scope of activity of Złomrex China Limited includes trading
in metal products.
On 29 March 2006, the Group established Złomrex — Pruszków Sp. z o.o. by contribution in cash of
PLN 50 thousand for 100% of the shares in this entity. The scope of activity of Złomrex — Pruszków Sp. z o.o.
includes purchasing and processing of iron scrap.
F-55
ZŁOMREX S.A.

On 15 May 2006, the Group established Złomrex Zbrojarnia Sp. z o.o. by contribution in cash of PLN
50 thousand for 100% of the shares in this entity. The scope of activity of Złomrex Zbrojarnia Sp. z o.o. includes
processing of metal products and production of metal products for construction.
On 3 August 2006, the Group established AB Stahl AG. by contribution in cash of EUR 50 thousand for
100% of the shares in this entity with the purpose of trading in iron scrap in Germany. Until the date of this
reporting the entity was not registered and did not conduct any activities.
29. Accounting estimates and judgements

Employee benefits
Liabilities for retirement payments were calculated by an independent actuary based on following
assumptions:
2005 2004
Discount rate as at 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0% 5.8%
Future salary increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1% 2%
For significant assumptions and estimates applied for impairment tests for cash-generating units
containing goodwill please refer to note 11.
30. Explanation of transition to IFRS

As stated in note 1(b), these are the Group’s first consolidated financial statements prepared in
accordance with IFRS EU.
The accounting policies set out in note 1 have been applied in preparation of the consolidated financial
statements for the financial year ended 31 December 2005, the comparative information presented in these
financial statements for the year ended 31 December 2004 and in the preparation of the opening balance at
1 January 2004 in accordance with the IFRS EU (the Group’s date of transition).
In preparing its opening IFRS balance sheet, the Group has adjusted amounts reported in the previous
financial statements which were prepared in accordance with the Polish accounting principles. The explanation of
the impact of the transition to IFRS EU from the former accounting principles on the Group’s financial
statements, profitability and cash flows is set out in the following tables and the notes that accompany the tables.
Reconciliation of equity
Effects of Effects of
transition to IFRS IFRS transition to IFRS
PAS* EU EU PAS* IFRS EU EU
Note 1 January 2004 31 December 2004
Assets
Property, plant and equipment . . . . . . . . . . a, b 44 160 (6 149) 38 011 269 034 (10 846) 258 188
Intangible assets . . . . . . . . . . . . . . . . . . . . . c, d 10 436 — 10 436 10 918 4 122 15 040
Investment property . . . . . . . . . . . . . . . . . . — — — 603 — 603
Other investments . . . . . . . . . . . . . . . . . . . e 939 — 939 4 711 (911) 3 800
Other receivables . . . . . . . . . . . . . . . . . . . . d 1 774 — 1 774 3 274 (1 496) 1 778
Prepaid perpetual usufruct of land . . . . . . . a — 6 149 6 149 — 10 364 10 364
Deferred tax assets . . . . . . . . . . . . . . . . . . . g 230 (209) 21 22 584 (8 897) 13 687
Total non-current assets . . . . . . . . . . . . . 57 539 (209) 57 330 311 124 (7 664) 303 460
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . h 39 612 (7 219) 32 393 114 009 (1 544) 112 465
Other investments . . . . . . . . . . . . . . . . . . . e 17 357 — 17 357 1 319 42 1 361
Income tax receivable . . . . . . . . . . . . . . . . 397 — 397 — — —
Trade and other receivables . . . . . . . . . . . . b, d, e, h, i, j 94 925 17 432 112 357 137 378 11 889 149 267
Cash and cash equivalents . . . . . . . . . . . . . e, j, k 12 812 (10 631) 2 181 16 304 (11 862) 4 442
Total current assets . . . . . . . . . . . . . . . . . 165 103 (418) 164 685 269 010 (1 475) 267 535
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 222 642 (627) 222 015 580 134 (9 139) 570 995
F-56
ZŁOMREX S.A.
30. Explanation of transition to IFRS (continued)

Effects of
transition Effects of
to IFRS transition to IFRS
PAS* IFRS EU EU PAS* IFRS EU EU
Note 1 January 2004 31 December 2004
Equity
Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 691 — 47 691 47 691 — 47 691
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338 — 338 13 829 — 13 829
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c, e, f, l 13 863 — 13 863 104 501 97 834 202 335
Total equity attributable to equity holders of the
parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 892 — 61 892 166 021 97 834 263 855
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, f — — — 13 600 365 13 965
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 892 — 61 892 179 621 98 199 277 820
Negative goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l — — — 93 868 (93 868) —
Liabilities
Interest-bearing loans and borrowings . . . . . . . . . . . . . . f 15 418 — 15 418 66 606 (3 573) 63 033
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 1 616 — 1 616
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 14 — 14
Deferred government grants and other deferred
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 265 — 265
Deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . f, g 209 (209) — 8 133 (8 133) —
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . 15 627 (209) 15 418 76 634 (11 706) 64 928
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . m — 11 219 11 219 — 35 559 35 559
Interest-bearing loans and borrowings . . . . . . . . . . . . . . e, f, i 76 956 (11 526) 65 430 127 954 (37 243) 90 711
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n 37 (37) — 502 (144) 358
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 4 320 — 4 320
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . e, k 68 130 (74) 68 056 96 211 64 96 275
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 954 — 954
Deferred government grants and other deferred
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 70 — 70
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 145 123 (418) 144 705 230 011 (1 764) 228 247
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 750 (627) 160 123 306 645 (13 470) 293 175
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . 222 642 (627) 222 015 580 134 (9 139) 570 995
F-57
ZŁOMREX S.A.

Reconciliation of profit for 2004
Effect of
transition to
Note PAS* IFRS EU IFRS EU
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, o 1 414 971 (220 073) 1 194 898
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, o, p (1 227 694) 208 226 (1 019 468)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 277 (11 847) 175 430
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 772 — 2 772
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p (39 337) 17 254 (22 083)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, p (21 000) (15 866) (36 866)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c, e, l (14 283) 11 422 (2 861)
Operating profit before financing costs . . . . . . . . . . . . . . . . . . . 115 429 963 116 392
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e 8 760 1 8 761

Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, f (17 392) (255) (17 647)
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8 632) (254) (8 886)
Excess of the interest in the net fair value of identifiable assets,

liabilities and contingent liabilities acquired over cost . . . . . . . l, f 3 994 97 042 101 036
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 791 97 751 208 542
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e, f (3 710) 51 (3 659)

Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 081 97 802 204 883
Attributable to:
Equity holders of the parent . . . . . . . . . . . . . . . . . . . . . . . . . . 104 129 97 834 201 963
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 952 (32) 2 920
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 081 97 802 204 883
Basic earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.18 2.05 4.23
Diluted earnings per share (PLN) . . . . . . . . . . . . . . . . . . . . . . . . . 2.18 2.05 4.23
* – figures include the effect of change in the accounting policy regarding the valuation of finished goods
according to FIFO method
PAS — Polish Accounting Act dated 29 September 1994
Explanations to the reconciliation of equity as at 1 January and 31 December 2004 and the profit for 2004
Effects of transition to IFRS EU
(a) Presentation of perpetual usufruct of land — the adjustment relates to prepaid perpetual usufruct of
land which under PAS was presented within property, plant and equipment. Under IFRS UE it is presented under
a separate caption in the balance sheet.
(b) Presentation of prepayments for fixed assets — the adjustment relates to prepayments for property,
plant and equipment which under PAS were presented within property, plant and equipment and under IFRS UE
under trade and other receivables.
(c) Reversal of goodwill amortization of PLN 1,126 thousand — in accordance with IFRS UE, goodwill
recognised as at the date of transition into IFRS UE is not amortized but instead is tested for impairment.
Consequently, the amortization of goodwill recognised in the financial statements under PAS for 2004 was
reversed.
(d) Presentation of development costs — according to IFRS UE, development costs are recognised as
intangibles assets and under PAS they are recognised within trade and other receivables.
F-58
ZŁOMREX S.A.

(e) Consolidation of Nowa Jakość — Organizacja Odzysku S.A., previously excluded from consolidation
due to insignificant influence on the financial statements.
(f) Valuation of low-interest loan received by Ferrostal Łabe˛dy Sp. z o.o. (subsidiary) from a government
institution — under PAS, loans were recognised at nominal value, while according to IFRS UE interest-bearing
borrowings are stated at amortized cost with any difference between cost and redemption value being recognized
in the income statement over the period of the borrowings on an effective interest basis.
(g) Set-off of deferred tax assets and liability — according to IFRS UE, deferred tax assets and deferred
tax liability should be offset if the entity has a legally enforceable right to offset current tax liabilities and assets,
and the deferred tax liabilities and assets relate to income taxes levied by the same tax authority.
(h) Presentation of prepayments for inventory — the adjustment is related to prepayments for inventory
which under IFRS UE are recognised within trade and other receivables.
(i) Valuation of loans and borrowings at amortised cost — under PAS, loans were recognised at nominal
value while according to IFRS UE, loans are financial liabilities which, at the date of initial recognition, should
be measured at fair value and subsequently at amortised cost using the effective interest rate.
(j) Elimination of social fund which is not controlled by the entity.
(k) Presentation of bills of exchange receivable which were classified as cash equivalents under PAS.
(l) Recognition in the income statement of the excess of the interest in the net fair value of identifiable
assets, liabilities and contingent liabilities over cost, arising on the acquisition of subsidiaries. According to PAS
this excess should be presented as a separate element of equity and liabilities and recognised as income, firstly in
the periods the acquiring entity anticipates to incur losses and costs due to the business combination and the
remaining amount of the excess proportionally over the period being the weighted average economic useful life
of property, plant and equipment acquired in the business combination. Under IFRS UE this excess after
additional re-assessment of measurement and recognition of assets, liabilities and contingent liabilities should be
recognised as income in the period the business combination occured.
(m) Separate presentation of bank overdrafts.
(n) Presentation of unused holiday leave accruals.
(o) De-recognition of revenues (and corresponding cost of sales) from the sales of semi-finished products
to ZW — Walcownia Bruzdowa Sp. z o.o. that were repurchased after processing. The adjustment is due to the
fact that the substance of these transactions was processing services.
(p) Presentation changes in order to ensure the consistency in the classification of costs (reclassification
between cost of sales, distribution expenses and administration expenses for 2004).
Explanation of material adjustments to the statement of cash flows for 2004

Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management
were classified as financing cash flows under the previous accounting principles and are reclassified as cash and
cash equivalents under IFRS EU. There are no other material differences between the cash flow statement
presented under IFRS EU and the cash flow statement presented under previous accounting principles.
F-59
Pro Forma Financial Information
for the year ended 31 December 2005
and for the nine months ended
30 September 2006 of Złomrex S.A.
F-60
Assurance Report on Pro Forma Financial Information
To the Management Board of Złomrex S.A.
We report on the pro forma financial information, which has been compiled on the basis described in the
Note 1 “Introduction”. The pro forma financial information has been prepared, for illustrative purposes only, to
provide information about how the acquisitions of HSW-Huta Stali Jakościowych Sp. z o.o. and HSW-
Walcownia Blach Sp. z o.o., which were completed during the first quarter of 2006, and the anticipated
acquisition of the voestalpine Stahlhandel GmbH Group to be completed during the first quarter of 2007 might
have affected the consolidated balance sheets of the Company and its subsidiaries (“the Group”) as at 31
December 2005 and 30 September 2006 and consolidated income statements for the year ended 31 December
2005 and for the nine month period ended 30 September 2006 presented on the basis of the accounting policies of
the Group. Because of its nature, the pro forma financial information addresses a hypothetical situation and
therefore does not represent the Company’s actual financial position or results had the transaction or event
occurred at the beginning of the reporting periods.
It is management’s responsibility to compile the pro forma financial information in accordance with the
requirements of European Commission Regulation 2004-809 (“ the EU Regulation”) and the Committee of
European Securities Regulator’s (“CESR”) Level 3 guidance.
It is our responsibility to express an opinion required by Annex II item 7 of the EU Regulation, as to the
proper compilation of the pro forma financial information. In providing this opinion we are not updating or
refreshing any reports or opinions previously made by us or any other auditor on any financial information used
in the compilation of the pro forma financial information, nor do we accept responsibility for our reports or
opinions beyond that owed to those to whom those reports or opinions were addressed at the dates of their issue.
Except as discussed in the paragraphs below, we performed our work in accordance with International
Standard on Assurance Engagements 3000, Assurance engagements other than audits or reviews of historical
financial information. The work that we performed for the purpose of making this report, which involved no
independent examination of any of the underlying financial information, including their adjustment to the
Company’s accounting policies nor of the pro forma assumptions stated in the pro forma notes consisted
primarily of comparing the unadjusted financial information with the source documents, considering the evidence
supporting the adjustments and discussing the pro forma financial information with the management of the
Company. We planned and performed our work so as to obtain all the information and explanations we
considered necessary in order to provide us with reasonable assurance that the pro forma financial information
has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of
the Group.
assets (except for inventories), liabilities and contingent liabilities of the voestalpine Stahlhandel GmbH Group
for the accounting for the anticipated business combination, which would be required under IFRS 3 Business
Combinations. Therefore, it was assumed that the carrying amounts of assets, other than inventories, and
liabilities presented in the balance sheet of the voestalpine Stahlhandel GmbH Group represent their fair values.
We were not able to determine the impact of this matter on the pro forma financial information.
Due to the limited information available it was impracticable to adjust the valuation of inventories held by
the voestalpine Stahlhandel GmbH Group which is made using weighted average cost principle to the first in first
out basis, which is a basis for inventory valuation applied by the Złomrex Group. We were unable to determine
the impact of this matter on the pro forma financial information.
The historical consolidated financial statements of the voestalpine Stahlhandel GmbH Group as at and for
the year ended 31 December 2005 and as at and for the nine month period ended 30 September 2006 that were
used in the compilation of the pro forma financial information did not include the financial statements of all
subsidiaries. The sum of total assets of subsidiaries accounted at cost in the historical consolidated financial
statements, before consolidation adjustments as at 31 December 2005 or 31 March 2006 (depending on their
financial year end) and 30 September 2006, amounted to approximately Euro 24.2 million and Euro 43.6 million,
respectively. Due to limited information available, it was impracticable to include the financial statements of
these subsidiaries in the pro forma financial information. We were unable to determine the impact of this matter
on the pro forma financial information.
F-61
In our opinion, except for the effect of such adjustments, if any, as might have been determined to be
necessary had sufficient information been available in order to estimate fair value adjustments to the carrying
amounts of assets, other than inventories, and liabilities of the voestalpine Stahlhandel GmbH Group, the
adjustment to the valuation of inventories held by the voestalpine Stahlhandel GmbH Group to the first in first
out basis, and the adjustment to include the financial statements of those subsidiaries that were accounted at cost
in the historical consolidated financial statements of the voestalpine Stahlhandel GmbH Group, the pro forma
financial information has been properly compiled on the basis stated; and that basis is consistent with the
accounting policies of the Company as described in the notes to the consolidated financial statements of the
Company for period ended 31 December 2005.
This report is required by Annex II item 7 of the EU Regulation and is given for the purpose of
complying with that Regulation and for no other purpose.

Warsaw, 13 January 2007
F-62
ZŁOMREX S.A.
Pro Forma Financial Information
1. Introduction
1.1 Background
The Transaction
On 27 January 2006, Złomrex Group (“the Group”) acquired 100% of shares in HSW Huta Stali
Jakościowych Sp. z o.o. (“HSW HSJ”) and HSW Walcownia Blach Sp. z o.o. (“HSW WB”) for PLN
193,000 thousand, including PLN 130,000 thousand paid in cash at the acquisition date and PLN
63,000 thousand payable in cash in instalments from January 2006 to January 2011 (“the Transaction”). The fair
value of the consideration was estimated at the acquisition date at PLN 185,710 thousand (including the deferred
tax impact of PLN 1,710 thousand). Legal and other fees directly attributable to the acquisition amounted to PLN
1,853 thousand. The Transaction covered two separate legal entities. The effect of the acquisition was accounted
for as one business combination.
The Transaction had the following effect on the Group’s assets and liabilities at the acquisition date.
Recognised
values
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,173
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,748
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,810
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,761
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,721
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,933
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,196)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,939)
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,081)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,910)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,563
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Total fair value of consideration* including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (187,563)
Consideration paid, satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (131,853)
Consideration payable in the next periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,710)
* Include legal fees and other fees amounting to PLN 1,853 thousand.
As a result of the acquisition, the Group recognised PLN 1,252 thousand as an intangible asset related to
major customer contracts and the related customer relationship.
The probable Transaction

On 20 December 2006, the Group concluded a share purchase agreement of 100% shares in voestalpine
Stahlhandel GmbH Group that is anticipated to be effective in the first quarter of 2007 (“the probable
Transaction”). The transfer of 74.9% share in voestalpine Stahlhandel GmbH Group is anticipated in the first
quarter of 2007 (“expected acquisition date”) while the transfer of the remaining part of 25.1% will be made at
the exercise date of put/call option set in the period between 1 January 2009 and 31 December 2010. The
Management assumed the realisation of the option.
The fair value of consideration was estimated at Euro 54,350 thousand (PLN 216,497 thousand) including
Euro 11,785 thousand (PLN 46,946 thousand) to be paid in cash at the expected acquisition date, Euro
11,960 thousand (PLN 47,643 thousand) representing deferred payment (Euro 6,000 thousand payable as at
31 March 2009 and Euro 5,960 thousand payable at the exercise date of the put/call option) and payment of
dividends from profits for the period ended 31 December 2006 and from retained profits of Euro 30,124 thousand
in total (PLN 119,993 thousand). Additionally, in accordance with the share purchase agreement the Group is
obliged to repay net debt to voestalpine AG estimated at Euro 44,500 thousand as at the expected acquisition
date. Legal and other fees directly attributable to the acquisition amounted to Euro 481 thousand (PLN 1,915
thousand).
F-63
ZŁOMREX S.A.
Pro Forma Financial Information (continued)
1. Introduction (continued)
The probable Transaction is expected to have the following effect on the Group’s assets and liabilities.
Recognised
values(***)
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,803
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,026
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,342
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221,892
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,032
Other short term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,451
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,434
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,532)
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (246,495)
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,515)
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,143)
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,604)
Provision for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,494)
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (156,361)
Net identifiable assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,301
% of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Total fair value of consideration** including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . (216,497)
Consideration to be paid, to be satisfied in cash . . . . . . . . . . . . . . . . . . . . . . . . . . (168,854)
Consideration payable in the next periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,643)
Goodwill*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,196
** include payment of dividends from profits for the period ended 31 December 2006 and from retained
profits of Euro 30,124 thousand in total (PLN 119,993 thousand) as well as legal fees and other fees
amounting to PLN 1,915 thousand.
*** presented calculation in PLN was based on the EUR/PLN exchange rate as at 30 September 2006.
The pro forma financial information has been prepared to illustrate the effect of the Transaction and the
probable Transaction on the balance sheet and income statement of the Group as at and for the year ended
31 December 2005 and as at and for the nine month period ended 30 September 2006 as if the Transaction and
the probable Transaction had occurred on 31 December 2004. The pro forma financial information has been
prepared for illustrative purposes only and cannot give a true picture of the results of operations and financial
position which would have been reported had the Transaction and the probable Transaction in fact occurred on
the above date.
This memorandum contains all the relevant information available to the management and the Directors of
Złomrex S.A. which is significant to an understanding of the pro forma financial information.
The pro forma financial information set out in this memorandum is the sole responsibility of the
management and the Directors of Złomrex S.A. and was authorised by the Directors on 13 January 2007.
1.2 Basis of preparation

The pro forma financial information has been prepared on the following basis:
Pro forma balance sheet and income statement
The pro forma balance sheet as at 31 December 2005 and income statement for the year then ended are
derived from the historical consolidated financial statements of Złomrex S.A. as of and for the year ended
31 December 2005 prepared in accordance with International Financial Reporting Standards as adopted by the
European Union (“IFRS EU”) which were audited by KPMG Audyt Sp. z o.o., historical financial statements of
HSW Huta Stali Jakościowych Sp. z o.o. and HSW Walcownia Blach Sp. z o.o. as at and for the year ended
F-64
ZŁOMREX S.A.
31 December 2005 prepared in accordance with the Act of 29 September 1994 on Accounting, which were
audited by Doradca Zespół Doradców Finansowo-Ksie˛gowych Sp. z o.o. and historical consolidated financial
statements of voestalpine Stahlhandel GmbH Group as at and for the year ended 31 December 2005 prepared in
accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS EU”)
which were reviewed by Grant Thornton Wirtschaftsprufungs- und Steuerberatungs- GmbH.
The pro forma balance sheet as at 30 September 2006 and income statement for the nine month period
then ended are derived from the historical consolidated financial statements of Złomrex S.A. as of and for the
nine month period ended 30 September 2006 prepared in accordance with International Financial Reporting
Standard for interim financial reporting as adopted by the European Union (“IFRS EU”) which were reviewed by
KPMG Audyt Sp. z o.o., historical income statement of HSW Huta Stali Jakościowych Sp. z o.o. for the one
month period ended 31 January 2006 prepared in accordance with the Act of 29 September 1994 on Accounting
and historical consolidated financial statements of voestalpine Stahlhandel GmbH Group as at and for the nine
month period ended 30 September 2006 prepared in accordance with International Financial Reporting Standards
as adopted by the European Union (“IFRS EU”) which were reviewed by Grant Thornton Wirtschaftsprufungs-
und Steuerberatungs- GmbH.
For the purpose of the pro forma financial information, the historical financial statements of HSW Huta
Stali Jakościowych Sp. z o.o. and HSW Walcownia Blach Sp. z o.o. as at and for the year ended 31 December
2005 and income statement of HSW Huta Stali Jakościowych Sp. z o.o. for the one month ended 31 January 2006
were adjusted to ensure the presentation of financial information consistent with IFRS EU, i.e. accounting
policies adopted by the Group in preparation of its consolidated financial statements.
The explanation of pro forma adjustments is discussed in Section 1.3, ‘Significant assumptions’ below.
Accounting policies
Except for issues described below the accounting polices adopted in preparation of the pro forma
financial information, which are consistent with those adopted by the Group in the preparation of its financial
statements, are detailed in the audited consolidated financial statements of Złomrex S.A. as at and for the year
ended 31 December 2005.
assets (except for inventories), liabilities and contingent liabilities of voestalpine Stahlhandel GmbH Group for
the accounting of business combination. Therefore it was assumed that carrying amounts of assets and liabilities
(except for inventories) presented in the balance sheet of voestalpine Stahlhandel GmbH Group represent their
fair values.
Due to limited information available it was impracticable to adjust valuation of inventories held by
voestalpine Stahlhandel GmbH Group to FIFO, which is a basis for inventories valuation in ZŁomrex Group.
The historical consolidated financial statements of voestalpine Stahlhandel GmbH Group as at and for the
year ended 31 December 2005 and as at and for the nine month period ended 30 September 2006 that were used
in the preparation of the pro forma financial information did not include financial statements of certain
subsidiaries. The sum of total assets of these subsidiaries as at 31 December 2005 or 31 March 2006 (depending
on their fiscal year end) and 30 September 2006 (before consolidation adjustments) amounted to approximately
Euro 24.2 million and Euro 43.6 million, respectively. Due to limited information available, it was impracticable
to include financial statements of these subsidiaries in the pro forma financial information.
1.3 Significant assumptions

The following significant assumptions and adjustments were made for the purpose of preparation of the
pro forma financial information:
1 Total equity of HSW HSJ and HSW WB at the date of the Transaction and total equity of
voestalpine Stahlhandel GmbH Group at the date of the probable Transaction (pre-acquisition
equity) was eliminated.
F-65
ZŁOMREX S.A.
2 For HSW HSJ and HSW WB the difference between the estimated fair value of the net assets
acquired at 31 December 2004 and the fair value of the net assets actually acquired was recorded
as an adjustment to retained earnings. Similarly, the difference between the discounted value of
deferred consideration at 31 December 2004 and actual discounted value of deferred consideration
at the acquisition date was recorded as an adjustment to retained earnings.
3 For anticipated acquisition of voestalpine Stahlhandel GmbH Group, the Management assumed
the realisation of the share purchase option (described in section 1.1 above). Therefore 100%
control was assumed over the voestalpine Stahlhandel GmbH Group.
4 The goodwill arising on the anticipated acquisition of voestalpine Stahlhandel GmbH Group was
calculated using book values of the net assets of voestalpine Stahlhandel GmbH Group as of
30 September 2006 (except for inventories described in point 16). Due to limited information it
was impracticable to determine the fair values of the identifiable assets (except for inventories),
liabilities and contingent liabilities of voestalpine Stahlhandel GmbH Group as of this date,
therefore it was assumed that carrying amounts of assets and liabilities (except for inventories)
presented in the balance sheet of voestalpine Stahlhandel GmbH Group as of 30 September 2006
represent their fair values. The difference between book value of net assets as of 31 December
2004 and the values adopted for calculation of goodwill was recorded as an adjustment to retained
earnings.
5 Prepayments for acquisition of shares in HSW HSJ and HSW WB which were presented as “Other
investments” in the Group’s historical financial statements were eliminated in the pro forma
financial information.
6 It was assumed that cash consideration for the acquisition of HSW HSJ and HSW WB was
financed with interest bearing loan. Additional interest expense from 1 January 2005 to 31 January
2006 was calculated based on the terms and conditions of the loan agreements actually utilised in
the Transaction.
7 It was assumed that cash consideration for the acquisition of voestalpine Stahlhandel GmbH
Group and repayment of loans to the companies of voestalpine AG Group at the expected
acquisition date was financed with the issuance of the Notes in the amount of Euro 87 million.
Additional interest expense from 1 January to 31 December 2005 and from 1 January to
30 September 2006 was calculated based on the anticipated nominal interest rate of Notes of 9%
adjusted by transactional costs to the effective interest rate of 9.6%.
8 It was assumed that total loans to voestalpine AG Group were repaid as at 31 December 2004 and
there were no other borrowings from voestalpine AG Group during 2005 and the nine month
period ended 30 September 2006. Total interest actually paid to voestalpine AG Group were
eliminated in the pro forma financial information. The excess of inflows from Notes issuance
drawn for the purpose of the repayment of loans to voestalpine AG Group outstanding as at the
expected acquisition date, over actual net debt to voestalpine AG Group during 2005 or nine
months ended 30 September 2006 was assumed to be utilised for payment of financial liabilities of
Złomrex Group. Savings were calculated based on the actual terms and conditions of the loans
utilised by the Group.
9 Deferred consideration for the acquisition of HSW HSJ, HSW WB and voestalpine Stahlhandel
GmbH Group was stated at 1 January 2005 at its present value at this date. Subsequent to initial
recognition, deferred consideration was stated at amortized cost with any difference between cost
and redemption value being recognized in the pro forma income statement over the term of the
borrowing on an effective interest rate basis.
10 It was assumed that the contribution of intangible assets and property, plant and equipment to
HSW HSJ and HSW WB by their previous shareholders with corresponding increase in share
capital, which in fact occurred in November 2005, had occurred prior to 31 December 2004.
11 As result, the rental and licence fees for the period January-November 2005 which related to the
contributed assets (as discussed above) to HSW HSJ and HSW WB in November 2005 were
eliminated from the income statement. Instead, depreciation and amortisation related to these
F-66
ZŁOMREX S.A.
assets were charged for the period from 1 January 2005 to 30 November 2005. The rental and
licence fees paid were recorded as prepayments made to third party.
12 Other intangible assets resulting from the Transaction include major customer contracts and the
related customer relationship. These assets were recorded at 1 January 2005 in the pro forma
financial information based on estimated fair value at this date and were amortised on a straight-
line basis over their estimated useful life.
13 The intangible assets representing CO2 emission rights recognised on acquisition of HSW HSJ
and HSW WB were recorded at 1 January 2005 in the pro forma financial information based on
the fair value established at the acquisition date of HSW HSJ and HSW WB.
14 Property, plant and equipment of HSW HSJ and HSW WB were recorded at 1 January 2005 in the
pro forma financial information based on the fair value determined at the acquisition date and
adjusted for events of 2005 and nine month period ended 30 September 2006. They were
depreciated in 2005 on a consistent basis with the Group’s current depreciation policy.
15 Prepaid perpetual usufruct of land disclosed by HSW HSJ and HSW WB was recorded at
1 January 2005 in the pro forma financial information based on the fair value determined at the
acquisition date and adjusted for events of 2005 and nine month period ended 30 September 2006.
16 Inventories of finished goods and merchandise were recorded at 1 January 2005 in the pro forma
financial information at their fair value representing selling prices less the costs to complete,
including the costs of disposal and a reasonable profit margin for the selling effort. Similarly,
inventories of work-in-progress were recorded at selling prices less the costs to complete,
including the cost of disposal and a reasonable profit margin for the selling effort.
17 Due to limited information available it was impracticable to adjust valuation of inventories held
by voestalpine Stahlhandel GmbH Group to FIFO, which is a basis for inventories valuation in
Złomrex Group.
18 Employee benefits which were guaranteed to the employees of HSW HSJ and HSW WB on the
acquisition date were recorded at 1 January 2005 in the pro forma financial information at the
value actually granted and were disclosed as current liabilities at 31 December 2005.
19 Intragroup balances, and any unrealized gains and losses or income and expenses arising from
intragroup transactions were eliminated in preparing the pro forma financial information.
20 Dividends which were distributed by HSW HSJ, HSW WB and voestalpine Stahlhandel GmbH
Group to their previous shareholders in 2005 and in the nine month period ended 30 September
2006 were recorded as prepayments made to third party.
21 The deferred tax impact relating to proforma adjustments, where applicable, was calculated based
on the current income tax rate of 19% enacted in Poland, except for the temporary differences that
shall be realized by voestalpine Stahlhandel GmbH Group which were calculated based on the
current income tax rate binding under the Austrian tax law of 25%.
F-67
ZŁOMREX S.A.
2. Pro Forma Financial Information as at and for the year ended 31 December 2005
2.1. Pro Forma Income Statement
For the year ended 31 December 2005
Unaudited
(A) (B) (C) (D=A+B+C) (E) (F=D+E) G (H=F+G) (I) (J=H+I)
2005 2005 2005
Total historical Pro forma 2005 Total with 2005
2005 2005 2005 without without Voestalpine Voestalpine Pro forma with
Złomrex Group HSW HSJ HSW WB Voestalpine Pro forma Assumption Voestalpine Stahlhandel Stahlhandel Pro forma Assumption Voestalpine
in PLN thousand historical historical* historical* Stahlhandel adjustments (Note) Stahlhandel historical historical adjustments (Note) Stahlhandel
Revenue . . . . . . . . . . . . . . . . . . . 976 236 351 211 98 087 1 425 534 (80 063) 1 345 471 1 254 327 2 599 798 — 2 599 798
Cost of sales . . . . . . . . . . . . . . . . (880 748) (298 431) (85 887) (1 265 066) 80 965 11, 14, 15, 19 (1 184 101) (1 091 917) (2 276 018) (17 489) 16 (2 293 507)
Gross profit . . . . . . . . . . . . . . . . 95 488 52 780 12 200 160 468 902 161 370 162 410 323 780 (17 489) 306 291
Other income . . . . . . . . . . . . . . . 3 531 903 153 4 587 (23) 19 4 564 11 758 16 322 — 16 322
Distribution expenses . . . . . . . . . (15 691) (2 270) (347) (18 308) — (18 308) (102 217) (120 525) — (120 525)
F-68
Administrative expenses . . . . . . (40 598) (11 699) (2 539) (54 836) 2 770 11, 12 (52 066) (30 446) (82 512) — (82 512)
Other expenses . . . . . . . . . . . . . . (4 725) (5 199) (761) (10 685) 23 19 (10 662) (5 275) (15 937) — (15 937)
financing costs ** . . . . . . . . . 38 005 34 515 8 706 81 226 3 672 84 898 36 230 121 128 (17 489) 103 639
Financial income . . . . . . . . . . . . 3 815 2 464 679 6 958 (70) 19 6 888 6 789 13 677 23 055 7, 9 36 732
Financial expenses . . . . . . . . . . . (20 852) (2 465) (724) (24 041) (10 867) 6, 9, 19 (34 908) (9 888) (44 796) (28 446) 7, 8, 9 (73 242)
Net financing costs *** . . . . . . . (17 037) (1) (45) (17 083) (10 937) (28 020) (3 099) (31 119) (5 391) (36 510)
Share of profit of associates . . . . — — — — — — (314) (314) — (314)
Profit before tax . . . . . . . . . . . . 20 968 34 514 8 661 64 143 (7 265) 56 878 32 817 89 695 (22 880) 66 815
Income tax expense . . . . . . . . . . (4 098) (6 801) (1 664) (12 563) 1 381 21 (11 182) (15 903) (27 085) 5 126 21 (21 959)
Profit for the period . . . . . . . . . 16 870 27 713 6 997 51 580 (5 884) 45 696 16 914 62 610 (17 754) 44 856
Attributable to:
Equity holders of the parent . . . . 15 304 27 713 6 997 50 014 (5 884) 44 130 14 101 58 231 (17 754) 40 477
Minority interest . . . . . . . . . . . . . 1 566 — — 1 566 — 1 566 2 813 4 379 — 4 379
Profit for the period . . . . . . . . . 16 870 27 713 6 997 51 580 (5 884) 45 696 16 914 62 610 (17 754) 44 856
* — adjusted to ensure the presentation of financial information consistent with IFRS EU

** — depreciation and amortisation charges included in pro forma operating costs amounted to PLN 43.7 million.
***—include interest income of PLN 11.9 million and interest expense of PLN 66.4 million.
ZŁOMREX S.A.
2. Pro Forma Financial Information as at and for the year ended 31 December 2005 (continued)
2.2. Pro Forma Balance Sheet
As at 31 December 2005
Unaudited
(A) (B) (C) (D=A+B+C) (E) (F=D+E) (G) (H) (I=F+G+H)
2005 2005 2005
Złomrex 2005 2005 Total without Voestalpine
Group HSW HSJ HSW WB 2005 Pro forma Assumption Voestalpine Stahlhandel Pro forma Assumption Total pro
in PLN thousand historical historical* historical* Total adjustments (Note) Stahlhandel historical adjustments (Note) forma
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . 269 011 120 362 22 860 412 233 (20 506) 10, 11, 14 391 727 139 806 — 531 533
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 953 1 354 453 21 760 8 006 10, 12, 13 29 766 1 224 60 265 4 91 255
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 — — 603 — 603 — — 603
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 508 — 543 4 051 (972) 5 3 079 — — 3 079
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 16 624 — 16 624
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 473 — — 2 473 — 2 473 — — 2 473
Prepaid perpetual usufruct of land . . . . . . . . . . . . . . . . . . . 11 959 1 270 188 13 417 1 370 15 14 787 — — 14 787
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 845 2 096 560 13 501 (932) 12 569 3 609 753 21 16 931
F-69
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . 318 352 125 082 24 604 468 038 (13 034) 455 004 161 263 61 018 677 285
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 632 26 707 5 520 135 859 105 16 135 964 157 709 — 17 293 673
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 976 — — 1 976 — 1 976 17 296 37 575 7 56 847
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 310 — 310 — 310 — — 310
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . 153 798 46 524 14 270 214 592 13 524 11, 19, 20 228 116 136 808 20 726 20 385 650
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . 14 623 2 661 1 810 19 094 — 19 094 16 393 (421) 20 35 066
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 029 76 202 21 600 371 831 13 629 385 460 328 206 57 880 771 546
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 381 201 284 46 204 839 869 595 840 464 489 469 118 898 1 448 831
Equity
Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 691 116 895 20 481 185 067 (137 376) 1, 10 47 691 20 762 (20 762) 1 47 691
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 995 13 380 5 777 106 152 (19 157) 1, 10 86 995 18 466 (18 466) 1 86 995
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 473 27 712 6 997 179 182 (29 887) 1, 2, 6, 19, 11, 12, 149 295 91 493 (102 727) 1, 4, 7, 8, 9, 138 061
16, 18, 20, 21 16, 20, 21
Foreign exchange translation differences . . . . . . . . . . . . . — — — — — — (6 840) (3 604) (10 444)
Total equity attributable to equity holders of the
parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 159 157 987 33 255 470 401 (186 420) 283 981 123 881 (145 559) 3 262 303
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 821 — — 15 821 — 15 821 16 782 — 3 32 603
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 980 157 987 33 255 486 222 (186 420) 299 802 140 663 (145 559) 294 906
*—adjusted to ensure the presentation of financial information consistent with IFRS EU

ZŁOMREX S.A.
2. Pro Forma Financial Information as at and for the year ended 31 December 2005 (continued)
2.2. Pro Forma Balance Sheet (continued)
As at 31 December 2005
Unaudited
(A) (B) (C) (D=A+B+C) (E) (F=D+E) (G) (H) (I=F+G+H)
2005 2005 2005
Złomrex 2005 2005 Total without Voestalpine
Group HSW HSJ HSW WB 2005 Pro forma Assumption Voestalpine Stahlhandel Pro forma Assumption Total pro
in PLN thousand historical historical* historical* Total adjustments (Note) Stahlhandel historical adjustments (Note) forma
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . 52 653 — 613 53 266 99 900 6 153 166 11 888 381 967 7 547 021
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 432 7 165 1 836 10 433 — 10 433 25 988 — 36 421
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 44 345 2 44 345 — — 44 345
Provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 1 637 — 1 637
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 6 214 — 6 214
Deferred government grants and other deferred income . . . . . . . . . . 606 — — 606 — 606 — — 606
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 691 7 165 2 449 64 305 144 245 208 550 45 727 381 967 636 244
F-70
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 141 1 495 — 30 636 — 30 636 — (10 087) 8 20 549

Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . 129 194 — — 129 194 27 072 6 156 266 168 878 (107 423) 8, 9 217 721
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 320 — — 1 320 — 1 320 — — 1 320
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 2 308 198 2 690 — 2 690 — — 2 690
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 065 — — 1 065 — 1 065 6 427 — 7 492
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 188 402 1 298 — 1 298 5 404 — 6 702
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 793 32 141 9 900 122 834 15 698 2, 9, 18, 19 138 532 122 370 — 260 902
Deferred government grants and other deferred income . . . . . . . . . . 305 — — 305 — 305 — — 305
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 710 36 132 10 500 289 342 42 770 332 112 303 079 (117 510) 517 681
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 401 43 297 12 949 353 647 187 015 540 662 348 806 264 457 1 153 925
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 381 201 284 46 204 839 869 595 840 464 489 469 118 898 1 448 831
*—adjusted to ensure the presentation of financial information consistent with IFRS EU

ZŁOMREX S.A.
3. Pro Forma Financial Information as at and for nine month period ended 30 September 2006
3.1. Pro Forma Income Statement
For nine month period ended 30 September 2006
Unaudited
(A) (B) (C=A+B) (D) (E=C+D) F (G=E+F) (H) (I=G+H)
1.01.2006-
30.09.2006 1.10.2005- 1.01.2006- 1.01.2006-
1.01.2006- Total 30.09.2006 1.01.2006- 30.09.2006 30.09.2006
30.09.2006 1.01.2006- historical Pro forma 30.09.2006 Total with Pro forma
Złomrex 31.01.2006 without without Voestalpine Voestalpine with
Group HSW HSJ Voestalpine Pro forma Assumption Voestalpine Stahlhandel Stahlhandel Pro forma Assumption Voestalpine
in PLN thousand historical historical* Stahlhandel adjustments (Note) Stahlhandel historical historical adjustments (Note) Stahlhandel
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 416 970 29 682 1 446 652 (7 488) 19 1 439 164 964 997 2 404 161 — 2 404 161
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 228 584) (25 150) (1 253 734) 13 002 16, 19 (1 240 732) (838 506) (2 079 238) — (2 079 238)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 386 4 532 192 918 5 514 198 432 126 491 324 923 — 324 923
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 662 2 2 664 — 2 664 11 477 14 141 — 14 141
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (21 545) (147) (21 692) — (21 692) (71 464) (93 156) — (93 156)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . (52 763) (682) (53 445) (10) 12 (53 455) (19 292) (72 747) — (72 747)
F-71
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6 992) (259) (7 251) — (7 251) (3 992) (11 243) — (11 243)
Operating profit before financing costs** . . . . . . . . 109 748 3 446 113 194 5 504 118 698 43 220 161 918 — 161 918
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 332 45 5 377 — 5 377 3 616 8 993 — 8 993
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25 219) (47) (25 266) — (25 266) (6 761) (32 027) (34 441) 7, 8, 9 (66 468)
Net financing costs*** . . . . . . . . . . . . . . . . . . . . . . . . (19 887) (2) (19 889) — (19 889) (3 145) (23 034) (34 441) (57 475)
Share of profit of associates . . . . . . . . . . . . . . . . . . . . . — — — — — 2 264 2 264 — 2 264
liabilities acquired over cost . . . . . . . . . . . . . . . . . . . 5 894 — 5 894 — 5 894 — 5 894 — 5 894
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 755 3 444 99 199 5 504 104 703 42 339 147 042 (34 441) 112 601
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18 887) (1 079) (19 966) (915) 21 (20 881) (11 023) (31 904) 6 301 21 (25 603)
Profit for the period Attributable to: 76 868 2 365 79 233 4 589 83 822 31 316 115 138 (28 140) 86 998
Equity holders of the parent . . . . . . . . . . . . . . . . . . . . . 75 129 2 365 77 494 4 589 82 083 27 689 109 772 (28 140) 81 632
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 739 — 1 739 — 1 739 3 627 5 366 — 5 366
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . 76 868 2 365 79 233 4 589 83 822 31 316 115 138 (28 140) 86 998

** — depreciation and amortisation charges included in pro forma operating costs amounted to PLN 35.4 million
***—include interests income of PLN 4.5 million and interest expense of PLN 46.9 million
ZŁOMREX S.A.
3. Pro Forma Financial Information as at and for nine month period ended 30 September 2006 (continued)
3.2. Pro Forma Balance Sheet
Unaudited
(A) (B) (C=A+B) (D) (E) (F=C+D+E)
2006 2006 Total 2006
Złomrex without voestalpine
Group Pro forma Assumptions Voestalpine Stahlhandel Pro forma Assumptions Total pro
in PLN thousand historical adjustments (Note) Stahlhandel historical adjustments (Note) forma
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443.671 — 443.671 143.799 — 587.470
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.668 (10) 12 28.658 4.027 62.196 4 94.881
Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.978 — 1.978 — — 1.978
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.787 — 1.787 4.705 — 6.492
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 14.639 14.639
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.173 — 3.173 — — 3.173
Prepaid perpetual usufruct of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.104 — 27.104 — — 27.104
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.768 (1.643) 21 6.125 4.238 7.055 21 17.418
F-72
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514.149 (1.653) 512.496 171.408 69.251 753.155

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255.780 — 255.780 206.795 — 17 462.575
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.476 — 4.476 17.452 38.779 7 60.707
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329.361 20.090 11 349.451 208.033 35.349 20 592.833
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.576 — 27.576 11.433 (421) 20 38.588
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.874 — 6.874 — — 6.874
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624.067 20.090 644.157 443.713 73.707 1.161.577
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.138.216 18.437 1.156.653 615.121 142.958 1.914.732
Equity
Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.691 — 47.691 20.762 (20.762) 1 47.691
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.621 — 95.621 18.466 (18.466) 1 95.621
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.994 11.465 2, 6, 11, 12, 14, 222.459 106.218 (118.399) 1, 4, 7, 8, 9, 16, 210.278
16, 21 20, 21
Foreign exchange translation differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (2.097) (1.673) (3.770)
Total equity attributable to equity holders of the parent . . . . . . . . . . . . . . . . 354.306 11.465 365.771 143.349 (159.300) 3 349.820
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.982 — 34.982 18.532 2.159 3, 20 55.673
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389.288 11.465 400.753 161.881 (157.141) 405.493

ZŁOMREX S.A.
3. Pro Forma Financial Information as at and for nine month period ended 30 September 2006 (continued)
3.2. Pro Forma Balance Sheet (continued)
Unaudited
(A) (B) (C=A+B) (D) (E) (F=C+D+E)

2006 2006 Total 2006
Złomrex without voestalpine
Group Pro forma Assumptions Voestalpine Stahlhandel Pro forma Assumptions Total pro
in PLN thousand historical adjustments (Note) Stahlhandel historical adjustments (Note) forma
Liabilities
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.793 — 142.793 25.554 394.208 7 562.555
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.407 — 10.407 29.515 — 39.922
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.314 — 36.314 — — 36.314
Provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 825 — 825
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 7.142 — 7.142
Deferred government grants and other deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . 1.614 — 1.614 — — 1.614
F-73
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191.128 — 191.128 63.036 394.208 648.372

Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.958 — 40.958 — (4.572) 8 36.386
Interest-bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237.187 6.972 6 244.159 220.941 (89.537) 8, 9 375.563
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 — 248 — — 248
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.765 — 2.765 — — 2.765
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.322 — 2.322 8.604 — 10.926
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988 — 988 4.669 — 5.657
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271.577 — 271.577 155.990 — 427.567
Deferred government grants and other deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . 1.755 — 1.755 — — 1.755
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557.800 6.972 564.772 390.204 (94.109) 860.867
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748.928 6.972 755.900 453.240 300.099 1.509.239
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.138.216 18.437 1.156.653 615.121 142.958 1.914.732

Pro Forma
Income Statement
for the twelve months
ended 30 September 2006
of Złomrex S.A.
F-74
ZŁOMREX S.A.
Pro Forma Financial Information as at and for twelve month period ended 30 September 2006 (continued)
Pro Forma Income Statement
For the 12 months ended 30 September 2006
(A) (B) (C) (D=A+B+C) (E) (F=D+E) (G) (H=F+G) (I) (J=H+I)
1.10.2005- 1.10.2005-
30.09.2006 1.10.2005- 1.10.2005- 30.09.2006 1.10.2005- 1.10.2005- 1.10.2005-
Złomrex 31.01.2006 31.12.2005 1.10.2005- Pro forma 30.09.2006 30.09.2006 30.09.2006
Group HSW HSJ HSW WB 30.09.2006 Pro forma without VA Total with Pro forma Pro forma
in PLN thousand historical historical* historical* Total adjustments VA historical VA adjustments with VA
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 655 510 112 953 23 422 1 791 885 (34 760) 1 757 125 1 244 734 3 001 859 — 3 001 859
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1 437 875) (95 781) (21 131) (1 554 787) 34 912 (1 519 875) (1 088 481) (2 608 356) (4 168) (2 612 524)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 635 17 172 2 291 237 098 152 237 250 156 253 393 503 (4 168) 389 335
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 548 856 129 5 533 — 5 533 13 636 19 169 — 19 169
Distribution expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26 534) (567) (85) (27 186) — (27 186) (94 766) (121 952) — (121 952)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63 652) (3 618) (749) (68 019) 119 (67 900) (26 274) (94 174) — (94 174)
F-75
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8 989) (2 976) (613) (12 578) — (12 578) (3 941) (16 519) — (16 519)
Operating profit before financing costs . . . . . . . . . . . . . . . . . 123 008 10 867 973 134 848 271 135 119 44 908 180 027 (4 168) 175 859
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 563 885 139 7 587 — 7 587 5 276 12 863 — 12 863
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29 656) (811) (103) (30 570) (3 635) (34 205) (8 802) (43 007) (34 664) (77 671)
Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23 093) 74 36 (22 983) (3 635) (26 618) (3 526) (30 144) (34 664) (64 808)
Share of profit of associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 1 861 1 861 — 1 861
Excess of the interest in the net fair value of identifiable assets,
liabilities and contingent liabilities acquired over cost . . . . . 5 894 — — 5 894 — 5 894 — 5 894 — 5 894
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 809 10 941 1 009 117 759 (3 364) 114 395 43 243 157 638 (38 832) 118 806
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20 854) (1 729) 113 (22 470) 639 (21 831) (11 031) (32 862) 7 338 (25 524)
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 955 9 212 1 122 95 289 (2 725) 92 564 32 212 124 776 (31 494) 93 282
Attributable to:
Equity holders of the parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 953 9 212 1 122 93 287 (2 725) 90 562 28 013 118 575 (31 494) 87 081
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 002 — — 2 002 — 2 002 4 199 6 201 — 6 201
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 955 9 212 1 122 95 289 (2 725) 92 564 32 212 124 776 (31 494) 93 282

Unaudited Interim Consolidated Financial Statements
for the six months ended 30 September 2006
of voestalpine Stahlhandel GmbH
F-76
VOESTALPINE STAHLHANDEL GMBH
for the six-month period ended September 30, 2006
Income Statement in Cost of Sales Format (IFRS)
in 1.000
IAS/IFRS CONSOLIDATED CONSOLIDATED

HBI Adj. IFRS CONSOLIDATION IFRS IFRS
Income Statement in Cost of 2006.09 2006.09 2006.09 2006.09 2006.09 2005.09
Sales Format (IFRS) ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL
SALES . . . . . . . . . . . . . . . 178.490,2 0,0 178.490,2 -6.441,3 172.048,9 158.121,7
Cost of Sales . . . . . . . . . . -154.196,4 -59,9 -154.256,3 6.388,5 -147.867,9 -139.571,5
GROSS MARGIN . . . . . 24.293,8 -59,9 24.233,9 -52,9 24.181,0 18.550,1
Other operating
income . . . . . . . . . . . . . 1.157,5 6,3 1.163,8 -43,4 1.120,4 1.897,7
Distribution Costs . . . . . . -12.423,8 0,0 -12.423,8 0,0 -12.423,8 -11.888,4
Administration Costs . . . . -3.728,8 160,9 -3.567,9 52,9 -3.515,0 -3.516,3
Other operating
expenses . . . . . . . . . . . . -615,9 345,8 -270,1 36,4 -233,7 -347,2
EARNINGS BEF.
INTEREST &
TAXES . . . . . . . . . . . . 8.682,8 453,1 9.135,9 -7,0 9.128,9 4.695,9
Result from shares . . . . . . 113,2 0,0 113,2 465,4 578,6 284,7
Interest income . . . . . . . . . 469,5 -156,6 312,9 -26,8 286,1 374,3
Interest payments . . . . . . . -1.298,6 161,2 -1.137,3 26,8 -1.110,5 -926,3
Income shares and
loans . . . . . . . . . . . . . . . 1,5 0,0 1,5 0,0 1,5 26,3
Other financial result . . . . 0,0 3,4 3,4 0,0 3,4 9,6
FINANCIAL
RESULT . . . . . . . . . . . -714,3 8,0 -706,3 465,4 -240,9 -231,3
EARNINGS BEFORE
TAX (EBT) . . . . . . . . . 7.968,5 461,2 8.429,6 458,4 8.888,0 4.464,6
Extraordinary result . . . . . 0,0 0,0 0,0 0,0 0,0 0,0
Income tax expense . . . . . -1.449,4 -565,6 -2.014,9 0,0 -2.014,9 -65,8
PROFIT/LOSS FOR
THE PERIOD . . . . . . . 6.519,1 -104,4 6.414,7 458,4 6.873,1 4.398,8
thereof Profit/Loss due to
third parties . . . . . . . . . 0,0 0,0 0,0 -773,4 -773,4 -580,3
F-77
Consolidated Financial Statements as of September 30, 2006
Balance Sheet (IFRS)
in 1.000
CONSOL- CONSOL- CONSOL-

IAS/IFRS CONSOL- IDATED IDATED IDATED
HBI Adj. IFRS IDATION IFRS IFRS IFRS
2006.09 2006.09 2006.09 2006.09 2006.09 2005.09 2004.09
Balance Sheet (IFRS) ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL
Property, plants and equipment . . . . . 36.078,5 21,1 36.099,6 0,0 36.099,6 36.102,4 40.083,2
Investment properties . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Goodwill . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Other intangible assets . . . . . . . . . . . . 1.010,6 0,0 1.010,6 0,0 1.010,6 334,0 607,5
AT EQUITY INVESTMENT . . . . . . 0,0 0,0 0,0 1.180,9 1.180,9 756,7 584,2
Other financial assets non-current . . . 12.642,1 294,8 12.936,9 -9.262,2 3.674,7 3.658,3 3.679,2
Deferred tax assets . . . . . . . . . . . . . . . 0,0 1.064,2 1.064,2 0,0 1.064,2 944,4 3.054,2
NON-CURRENT ASSETS . . . . . . . 49.731,2 1.380,1 51.111,3 -8.081,3 43.030,0 41.795,8 48.008,3
Inventories . . . . . . . . . . . . . . . . . . . . . 51.846,1 46,2 51.892,3 20,9 51.913,2 44.345,8 49.212,4
Trade receivables . . . . . . . . . . . . 49.834,2 97,7 49.931,9 -969,3 48.962,5 41.740,7 41.964,0
Other receivables . . . . . . . . . . . . 3.829,6 -496,2 3.333,4 -72,3 3.261,1 3.517,9 1.990,6
Trade and other receivables . . . . . . . . 53.663,8 -398,5 53.265,3 -1.041,6 52.223,7 45.258,6 43.954,6
Current tax assets . . . . . . . . . . . . . . . . 296,0 0,0 296,0 -296,0 0,0 17,4 0,0
Financial assets current . . . . . . . . . . . 4.287,6 0,0 4.287,6 93,1 4.380,7 1.648,5 0,0
Cash and cash equivalents . . . . . . . . . 2.870,3 0,0 2.870,3 0,0 2.870,3 2.235,4 1.908,8
CURRENT ASSETS . . . . . . . . . . . . 112.963,7 -352,3 112.611,5 -1.223,6 111.387,8 93.505,8 95.075,9
TOTAL ASSETS . . . . . . . . . . . . . . . 162.694,9 1.027,8 163.722,8 -9.304,9 154.417,9 135.301,6 143.084,2
EQUITY . . . . . . . . . . . . . . . . . . . . . . 48.851,7 -1.118,8 47.732,9 -7.094,6 40.638,3 36.038,7 34.220,2
Financial liabilities non-current . . . . . 6.415,4 0,0 6.415,4 0,0 6.415,4 3.284,7 4.841,7
Provisions and other employee
obligations . . . . . . . . . . . . . . . 7.409,4 0,0 7.409,4 0,0 7.409,4 6.613,8 7.686,2
Other long-term provisions . . . . 207,4 0,0 207,4 0,0 207,4 420,9 42,6
Deferred tax liabilities . . . . . . . . 127,0 1.666,1 1.793,1 0,0 1.793,1 1.621,6 2.152,9
Provisions non-current . . . . . . . . . . . . 7.743,9 1.666,0 9.409,9 0,0 9.409,9 8.656,3 9.881,7
NON-CURRENT LIABILITIES . . 14.159,3 1.666,0 15.825,3 0,0 15.825,3 11.941,0 14.723,4
Financial liabilities current . . . . . . . . 55.382,7 0,0 55.382,7 81,1 55.463,8 41.297,4 46.689,1
Provisions current . . . . . . . . . . . . . . . 1.171,9 0,0 1.171,9 0,0 1.171,9 1.532,3 3.253,6
Tax liabilities current . . . . . . . . . . . . . 1.967,7 488,3 2.456,0 -296,0 2.160,0 1.652,4 43,4
Trade liabilities . . . . . . . . . . . . . 34.737,7 -7,7 34.730,0 -1.101,7 33.628,4 31.650,4 31.144,4
Other liabilities . . . . . . . . . . . . . 6.423,9 6.423,9 -893,8 5.530,1 11.189,4 13.010,0
Trade and other liabilities . . . . . . . . . 41.161,6 -7,7 41.153,9 -1.995,4 39.158,5 42.839,8 44.154,4
CURRENT LIABILITIES . . . . . . . 99.684,0 480,6 100.164,6 -2.210,4 97.954,2 87.321,9 94.140,5
TOTAL EQUITY AND
LIABILITIES . . . . . . . . . . . . . . . . 162.694,9 1.027,8 163.722,8 -9.304,9 154.417,9 135.301,6 143.084,2
F-78
for the six-month period ended September 30, 2006 (Continued)
Cash Flow (IFRS)
in 1.000
CONSOL- CONSOL-
IAS/IFRS CONSOLIDA- IDATED Other IDATED
HBI Adj. IFRS TION IFRS adjustments IFRS
2006.09 2006.09 2006.09 2006.09 2006.09 Prev. Period 2006.09
Cash Flow (IFRS) ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL
KFIAS015 NET INC./LOSS AFTER TAX INCL. MINORITY . . . . . . . . . . . . . . . . . . . . 6.519,1 -104,4 6.414,7 458,4 6.873,1 0,0 6.873,1
KFIAS020 Deprec./Appreciat. to fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.448,6 -3,4 1.445,2 0,0 1.445,2 0,0 1.445,2
KFIAS030 Book value of asset sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,3 0,0 53,3 0,0 53,3 0,0 53,3
KFIAS040 Increase (decrease) long provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -250,6 0,0 -250,6 0,0 -250,6 0,0 -250,6
KFIAS041 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 78,2 78,2 0,0 78,2 0,0 78,2
KFIAS045 Other non-cash income/expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 -478,0 -478,0 0,0 -478,0
KFIAS060 Income from the sales of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28,0 0,0 -28,0 0,0 -28,0 0,0 -28,0
KFIAS080 Change in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14.822,2 1.022,0 -13.800,3 -1.167,2 -14.967,5 0,0 -14.967,5
KFIAS090 Operative cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7.079,8 992,4 -6.087,5 -1.186,9 -7.274,3 0,0 -7.274,3
KFIAS120 Expense to investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.675,1 0,0 -1.675,1 0,0 -1.675,1 0,0 -1.675,1
F-79
KFIAS125 Change scope of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS176 Increase minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS150 Income from the sales of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,0 0,0 28,0 0,0 28,0 0,0 28,0
KFIAS155 Changes of receivables from financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521,5 0,0 521,5 -196,7 324,8 0,0 324,8
KFIAS160 Cash flow from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.125,7 0,0 -1.125,7 -196,7 -1.322,4 0,0 -1.322,4
KFIAS180 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.565,1 -991,6 -4.556,7 1.958,1 -2.598,6 0,0 -2.598,6
KFIAS174 Dividends minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 -586,1 -586,1 0,0 -586,1
KFIAS215 Own shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS175 Capital increase/ shareholder contribut. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS155H Changes in financial credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.618,1 0,0 13.618,1 10,4 13.628,5 0,0 13.628,5
KFIAS177 Transfers/Reorganisation equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS230 Other changes Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS179 Cash flow financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.053,0 -991,6 9.061,4 1.382,5 10.443,9 0,0 10.443,9
KFIAS190 Changes in liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.847,5 0,8 1.848,3 -1,1 1.847,2 0,0 1.847,2
KFIAS200 Liquidity opening values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.038,2 0,0 1.038,2 0,0 1.038,2 0,0 1.038,2
KFIAS190 Changes in liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.847,5 0,8 1.848,3 -1,1 1.847,2 0,0 1.847,2
KFIAS178 Currency differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -72,0 0,7 -71,3 1,7 -69,6 0,0 -69,6
KFIAS173 Currency differences Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,6 -1,5 55,1 -0,6 54,5 0,0 54,5
KFIAS220 Liquidity closing values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.870,3 0,0 2.870,3 0,0 2.870,3 0,0 2.870,3
-0,0000001 -0,0000001
and for the six-month period then ended
Equity development (IFRS)

in 1.000
Steel Trade Group

2006.09 — ACTUAL
Equity (Group) Minorities Equity

Opening Balance (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.419,5 4.475,8 36.895,3
Net loss/Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.099,7 773,4 6.873,1
Dividend distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.598,6 -586,1 -3.184,6
Currency conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,4 -10,8 54,5
Hedge Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Corr. Adjustment Hedge Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Social capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Correction Adjustment Social Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Adj.m. item for IC balance consol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
First consolidation/End consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Acturial Gain/Loss Severance Paym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.986,0 4.652,3 40.638,3
Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
F-80
and for the six-month period then ended
Key Figures (IFRS)

in 1.000
2006.09 2005.09
Key Figures (IFRS) ACTUAL ACTUAL
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172.048,9 158.121,7
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.128,9 4.695,9
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.577,5 6.367,0
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.762,0 44.164,5
Investment (including shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.641,6 1.377,7
Operative cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7.274,3 14.887,0
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.598,6 -1.093,2
Net financial debt (closing value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.109,2 39.638,7
OM (operating margin) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,3% 3,0%
Sales/Capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,7 1,9
ROCE (Return on capital employed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,2% 5,6%
WC in % of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,9% 27,9%
Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,2% 110,0%
F-81
and for the six-month periods then ended (continued)
Interim report First Half 2006/2007 1 April 2006-30 September 2006 of voestalpine Stahlhandel GmbH
voestalpine Stahlhandels Group key figures

1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,0 158,1 8,8
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,6 6,4 66,1
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,1 4,0
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,1 4,7 94,4
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,3 3,0
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,9 4,5 99,1
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 4,4 56,2
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,6 1,4 19,2
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,4 1,7 -13,3
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,6 36,0 12,8
Net financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,1 39,6 31,5
Net financial debt in % of equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,2 110,0 16,6
Employees excl. Apprentices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453 441 2,7
Capital Employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,8 83,7 18,0
Highlights as of 30 September 2006:

Š About the same excellent operating result as in 2004/05, which was a boom year
Š Sales increased by 8.8%, while operating result rose by 94.4% compared to the first half of 2005/06
Š Significant improvement of the operating result for voestalpine Stahlhandel GmbH and voestalpine
Spol. S.r.o. compared to the previous year
Š Better operating results for Köllensperger Stahlhandel and Veting compared to the previous year
Š Neptun Stahlhandel fell slightly below the figures for the previous year
Š Continued stable development of prices and quantities
Š Profit margins and quantities in the Stahlhandels Group over budget
Verbal explanation of the semi-annual result in the voestalpine Stahlhandels Group:

Š Revenue increased by 8.8% from EUR 158.1 million to EUR 172.0 million.
Š EBITDA (earnings before interest, taxes, depreciation, and amortisation) rose by 66.1% from EUR
6.4 million to EUR 10.6 million. The EBITDA margin was 6.1% compared to 4.0%.
Š EBIT (profit from operations) reached EUR 9.1 million, corresponding to an increase of 94.4% (EUR
4.7 million). Thus, the EBIT margin improved from 3.0% to 5.3%.
Š The result after taxes (profit for the period) rose from EUR 4.4 million to EUR 6.9 million.
Š The increase of the acquisition prices and, associated with that, of the sales prices in general, as well
as, in particular, the continuing excellent level of demand for steel products have contributed to a
substantial improvement of the operating result in the Stahlhandels Group.
Š The operating result improved in comparison to the previous year for all companies with the exception
of Neptun Stahlhandel.
The Group’s EBIT margin as of 30 September 2006 came to 5.3%.
Details about:
voestalpine Stahlhandel GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8%

Neptun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2%
Köllensperger Stahlhandel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2%
voestalpine Spol. S.r.o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5%
veting d.o.o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5%
F-82
Š Compared to the same period of the previous year, the supply quantities were up. During the period
under review, the Stahlhandels Group sold 250,000 tonnes. Compared to the previous year, this means
an increase of 6.3%.
Š We would like to highlight the fact that the favorable development of our subsidiary in the Czech
Republic, where the sales of the hot-rolled hollow sections were expanded across the entire
Stahlhandels Group.
The first half of the current business year was characterized by a good level of demand at increasing
procurement prices. Especially during the second quarter, the positive market situation resulted in a very good
operating result. Toward the end of the second quarter, there was a definite trend toward a division of the market
according to products. In the sector of beams and non-ferrous alloys, there continues to be a high demand at good
price levels, while the market for the other product groups appears to be cooling.
The development of the gross earnings is also very gratifying, and the budget was surpassed by 36.2%.
Details about voestalpine Stahlhandel GmbH
1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,8 92,6 7,8
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,3 2,2 95,3
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,4 2,4 81,2
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,8 1,6 130,9
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,8 1,8 114,2
Employees (excl. Apprentices) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 210 -4,3
Details about Köllensperger Stahlhandel

1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,5 12,4 9,2
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,1 1,6 28,6
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,6 13,2 17,8
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,9 1,5 32,2
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,2 11,7 21,1
Employees (excl. Apprentices) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 44 0,0
During the period under review, the economic environment developed favorably and showed a very
satisfactory trend that should be continuing, at least until the end of the year.
The customers in Tyrol have a full backlog of orders and some have work scheduled beyond the winter
period.
The availability of materials was enabled by timely procurement of inventory — in particular of flat
rolled products — and led to a growing number of orders.
The increase in acquisition prices could be passed on to customers.
During the current year, another competitor (ÖAG Kontinentale) entered the market and is moving very
aggressively.
Details about Neptun Stahlhandel
1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,9 24,1 15,6
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,7 0,8 -18,3
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,4 3,4 -29,3
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,6 0,8 -19,0
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,2 3,2 -29,9
Employees (excl. Apprentices) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 51 -4
F-83
The anticipated positive development of the sales quantities is being sustained. As of 30 September 2006,
sales are at 47,725 tonnes, that is, 14.7% above the budget.
The average increase of the purchase prices for reinforcing material, matting, and rods has been more
than EUR 170.00 per ton. Since October, the prices for matting and rods have been stable to slightly falling.
The sales prices are under pressure because of competition, and the higher price for replacements is being
largely ignored.
The price situation is unsatisfactory in the entire sales sector.
We continue to see aggressive competition in the steel industry and in project-related business for cut and
bent material and the market is harshly competitive; the current market situation and the delivery of orders placed
in the spring of 2006 are placing significant pressure on the margin.
Despite the difficult market situation, a positive result was generated.
Details about Veting voestalpine d.o.o.
1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,2 11,7 -12,8
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,7 0,5 22,5
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,5 4,6 40,4
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,6 0,5 23,1
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,5 3,9 41,2
Demand is higher than anticipated. However, the shortage of certain materials is noticeable. Gradually,
the customers’ liquidity situation and payment performance is improving.
Seen cumulatively, 52% of sales were flat products and 48% of sales were long products, whereby in
September, the flat products generated 68% of sales. 17.5% of sales were derived from export, by direct
deliveries to Bosnian customers.
Of the total volume, the share of track sales declined from 18.2% in the comparable period of the
previous year to 6.2%.
We expect that business will drop because of the approaching winter months. Price reductions have been
announced for cold-rolled and galvanized plates. Sarajevo has had higher gross earnings (13.5%) and EBIT
margins (8.3%), however, the liquidity on the Bosnian market is lower than in Croatia.
Details about voestalpine Stahlhandel spol.s.r.o.
1 H 2006/07 1 H 2005/06 Change
(in Mio. EUR) 01.04.-30.09.2006 01.04.-30.09.2005 in %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,0 19,8 36,2
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,8 1,1 150,1
EBITDA-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,4 5,7 83,7
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,3 0,7 249,2
EBIT-margin (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,5 3,3 156,5
During the first half of the business year, the results were similar to the 2004/05 business year. Both the
figures of the previous year and the budget were surpassed.
Overall, the development here is very positive.
The main warehouse in Vyskov (near Brno) stores the largest inventory of hot-rolled hollow sections of
all the bordering Central and Eastern European countries.
The focus of this company is solely on storing inventory and pre-processing.
F-84
Acquisitions/Investments
Currently, negotiations are ongoing regarding the acquisition of the remaining shares (40%) of Veting
voestalpine d.o.o. The acquisition of these shares should be completed by December.
During the first half of 2006/07, the investments of the voestalpine Stahlhandels Group came to EUR 1.6
million.
Details about investments as of 30 September 2006:
voestalpine Stahlhandel GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 0.40 million

Neptun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 0.01 million
Köllensperger Stahlhandel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 0.14 million
voestalpine Spol. S.r.o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 0.92 million
veting d.o.o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR 0.17 million
The investments at voestalpine Stahlhandel GmbH were primarily for the new ERP system Microsoft
Navision.
At the subsidiary voestalpine Spol. s.r.o., the major part of the investments were for the Amada cutter, the
Kaltenbach saw, including cranes and longitudinal machine in Vyskov.
For the remaining companies, the investments were solely for replacements.
Outlook voestalpine Stahlhandels Group

As opposed to the first two quarters, the third quarter will be less robust. The procurement prices (with
the exception of beams and non-ferrous alloys) will decline by about EUR 20.00 to 30.00/ton and the market
prices will go down at the same rate. In accordance with the season, demand will continue to remain at a good
level. We anticipate the sales figures to be as budgeted; the gross earnings will be above budget despite the
slightly yielding prices.
The focus of the marketing measures will continue to be on selective customer support.
F-85
Financial data as of 30 September 2006

according to International Financial Reporting Standards (IFRS)
(in millions of euros) 09/30/2006 09/30/2005

ASSETS
A. Non-Current Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,1 36,1
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,0 0,3
Investments in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,2 0,8
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,6 3,7
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,1 0,9
43,0 41,8
B. Current Assets
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,9 44,3
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,2 46,9
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,4 0,0
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,9 2,2
111,4 93,5
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,4 135,3
EQUITY AND LIABILITIES
A. Equity
Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,1 5,1
Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,5 4,5
Retained earnings and other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,4 22,2
Equity attributable to equity holders of the parent . . . . . . . . . . . . . . . . . . . . . . . . . 36,0 31,8
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,7 4,2
40,6 36,0
B. Non-Current Liabilities
Pensions and other employee obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,4 6,6
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,2 0,4
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,8 1,6
Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,4 3,3
15,8 11,9
C. Current Liabilities
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,7 1,6
Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,5 41,3
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,8 44,5
98,0 87,3
TOTAL EQUITY AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,4 135,3
F-86
Consolidated income statement
(in millions of euros) 1/4-30/9/2006 1/4-30/9/2005

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,0 158,1
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -147,9 -139,6
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,2 18,6
Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,1 1,9
Distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12,4 -11,9
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,5 -3,5
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0,2 -0,3
Profit from operations (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,1 4,7
Share of profit of associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,5 0,2
Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,4 0,5
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,1 -0,9
Profit before tax (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,9 4,5
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,0 -0,1
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 4,4
Consolidated cash flow statement

Operating activities
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 4,4
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,8 -1,0
Changes in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15,0 11,5
Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7,3 14,9
Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,3 4,9
Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,4 -19,7
Net decrease/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 1,8 0,2
Changes in Equity

Equity at April 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,9 38,4
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 4,4
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,2 -1,9
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,1 0,1
Other changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5,0
Equity at September 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,6 36,0
Appended information pursuant to IAS 34

IAS 34.16
a) The annual financial statement was prepared in accordance with the principles of proper
accounting and the general standards so as to provide as exact a presentation as possible of the
Company’s assets and liabilities, financial standing, and earnings.
When preparing the annual financial statement, the principle of completeness was complied with.
The valuation assumed the continuation of the operation of the company.
The accounting and valuation principles were the same as the ones used for the annual financial
statement as of 31 March 2006.
F-87
b) Generally, in the steel industry, the first half of the year is stronger compared to the second half.
Especially in the building industry (Neptun), lower sales figures can be expected during the winter
months.
The first half of the year was characterized by an increase in prices in all the major product
groups.
c-e) does not apply
IAS 34.16
f) As of 30 September 2006, voestalpine Stahlhandel GmbH paid the amount of EUR 1.5 million
(paid in accordance with the HGB accounting rules) to voestalpine Stahl GmbH. (EUR 0.0 million
EUR as of 30 September 2005)
g) Segments
Czech
Austria Republic Croatia Total Group
In thousands of euros 30.09.2006 30.09.2006 30.09.2006 30.09.2006
External revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136.758,9 25.057,4 10.232,7 172.048,9
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.520,0 42.335,8 18.562,1 154.417,9
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551,6 915,5 174,5 1.641,6
h) The only major effect after the balance sheet date is the planned acquisition of the remaining
shares of Veting (40%). This process should be completed by the end of December.
i) During the period under review, there were no company mergers and no changes in the
consolidated companies.
j) There were no changes in the contingent debts and the contingent claims as of the last balance
sheet date.
IAS 34.17
a-c) does not apply
d) The investments at voestalpine Stahlhandel GmbH were primarily for the new ERP system
Microsoft Navision.
At the subsidiary voestalpine Spol.s.r.o., the major part of the investments were for the Amada
cutter, the Kaltenbach saw, including cranes and longitudinal machine in Vyskov.
For the remaining companies, the investments were solely for replacements. No major property,
plant and equipment were disposed of.
e-j) does not apply
Executive Management
Johannes Kasticky Jürgen Glück
Linz, November 2006
F-88
Audited Consolidated Financial
Statements for the year ended
31 March 2006 of voestalpine
Stahlhandel GmbH
F-89
Auditor’s report in accordance with Article 274 HGB (Austrian Commercial Code):
We have audited the accompanying consolidated financial statements of voestalpine Stahlhandel GmbH
Group, Linz, for the fiscal year from April 1st, 2005 to March 31st, 2006 as parts of the consolidated financial
statements of voestalpine AG Group, Linz, for the same period. The company’s management is responsible for
the preparation and the content of the consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit and to state whether the management report (“Lagebericht”)
for the group is in accordance with the consolidated financial statements. The audit of the different financial
statements which form part of the consolidated financial statements of the voestalpine Stahlhandel Group has
been performed by other auditors, only the audit of the consolidation work was part of our duty. Our audit result
for these financial statements is entirely based on the certification we received from the other auditors.
We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian
Standards on Auditing and also taking into account the International Standards on Auditing (ISA). Those
standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated
financial statements are free from material misstatement. In determining the audit procedures we considered our
knowledge of business, the economic and legal environment of the Group as well as expected occurrence of
errors. An audit involves procedures to obtain evidence about amounts and other disclosures in the consolidated
financial statements predominantly on a sample basis. An audit also includes assessing the accounting principles
used and significant estimates made by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis of our opinion.
Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the
consolidated financial statements are in accordance with legal requirements and present fairly, in all material
respects, the financial position of the voestalpine Stahlhandel Group as of March 31st, 2006, and of the results of
its operations and its cash flows for the fiscal year from April 1st, 2005, to March 31st, 2006, in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU. The management report for the group
is in accordance with the consolidated financial statements.
Vienna, May 16th, 2006
Grant Thornton
Wirtschaftsprüfungs- und Steuerberatungs-GmbH
Univ. Doz. Dr. Walter Platzer Dr. Franz Schiessel

Auditor and Tax Consultant
F-90
Income statement 31.03.2006
in cost of sales format
In TEUR
Notes 31.03.2006 31.03.2005

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 303.817,8 332.641,4
Cost of Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -269.563,0 -275.766,2
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.254,8 56.875,2
Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4.257,6 3.356,1
Distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23.655,6 -26.544,9
Administration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6707,8 -9.212,5
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 -1.119,0 -1599,6
Profit from operations (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.030,1 22.874,2
Share of profit of associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 216,8 11,9
Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.406,5 1.733,1
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 -2.038,1 -3.282,6
Earnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.615,3 21.336,6
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 -866,6 -7.055,1
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.748,7 14.281,5
Thereof profit/loss due to third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 878,9 1.520,6
F-91
Balance sheet 31.03.2006
In TEUR
Notes 31.03.2006 31.03.2005

Assets
A. Non-current assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 36.107,7 41.990,7
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 851,8 545,1
Investments in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 702,9 538,0
Investments in other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.704,9 3.950,8
Deffered tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.059,4 905,8
42.426,7 47.930,4
B. Current assets
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 45.083,1 51.133,3
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 40.136,9 45.367,8
Investments in other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.571,5 777,3
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.038,2 2.068,2
90.829,7 99.346,6
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.256,4 147.277,0
Equity and liabilities
Equity
Issued capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.087,0 5.087,0
Share premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.527,3 4.527,3
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.805,2 24.368,4
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.475,8 4.380,1
15 36.895,3 38.362,8
Non-current liabilities
Pensions and other employee obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.660,0 7.194,4
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 208,9 421,6
Deffered tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.708,9 2.204,2
Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.275,9 3.711,5
11.853,7 13.531,7
Current liabilities
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.513,8 3.038,6
Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 45.569,9 53.766,7
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 37.423,7 38.577,1
84.507,4 95.382,4
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.256,4 147.277,0
F-92
Consolidated Financial Statements for the year ended 31 March 2006
Cash Flow (IFRS)
in 1.000
CONSOL- CONSOL-
IAS/IFRS CONSOL- IDATED Other IDATED
HBI Adj. IFRS IDATION IFRS adjustments IFRS
2006.03 2006.03 2006.03 2006.03 2006.03 Prev. Period 2006.03
Cash Flow (IFRS) ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL
KFIAS015 NET INC./LOSS AFTER TAX INCL. MINORITY . . . . . . . . . . . . . . . . . . . . 4.855,9 2.370,8 7.226,6 -1.478,0 5.748,6 0,0 5.748,6
KFIAS020 Deprec./Appreciat. to fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.854,6 29,1 2.883,7 344,1 3.227,8 0,0 3.227,8
KFIAS030 Book value of asset sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.333,5 17,1 6.350,6 0,0 6.350,6 -5.966,1 384,5
KFIAS040 Increase (decrease) long provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,7 -1.444,7 -1.196,0 15,1 -1.180,8 1.291,2 110,4
KFIAS041 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,5 -296,0 -222,5 -84,8 -307,3 0,0 -307,3
KFIAS045 Other non-cash income/expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 -230,2 -230,2 -942,9 -1.173,1
KFIAS060 Income from the sales of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7.662,8 300,2 -7.362,6 0,0 -7.362,6 6.909,0 -453,6
KFIAS080 Change in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.763,0 120,2 9.883,2 -395,5 9.487,7 -4.294,0 5.193,7
KFIAS090 Operative cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.466,3 1.096,7 17.563,0 -1.829,3 15.733,7 -3.002,8 12.730,9
F-93
KFIAS120 Expense to investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.529,1 0,0 -3.529,1 0,0 -3.529,1 0,0 -3.529,1
KFIAS125 Change scope of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 5.211,8 5.211,8
KFIAS176 Increase minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 7,3 7,3 -7,3 0,0
KFIAS150 Income from the sales of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.662,8 -300,2 7.362,6 0,0 7.362,6 -6.909,0 453,6
KFIAS155 Changes of receiveables from financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.139,5 5,6 -3.133,9 -207,6 -3.341,5 0,0 -3.341,5
KFIAS160 Cash flow from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 994,3 -294,6 699,7 -200,3 499,4 -1.704,5 -1.205,1
KFIAS180 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.830,6 -1.093,3 -3.923,9 2.830,6 -1.093,2 0,0 -1.093,2
KFIAS174 Dividends minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 -759,0 -759,0 0,0 -759,0
KFIAS215 Own shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS175 Capital increase/shareholder contribut. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS155H Changes in financial credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10.658,8 0,0 -10.658,8 0,0 -10.658,8 0,0 -10.658,8
KFIAS177 Transfers/Reorganisation equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.993,8 293,8 -4.700,0 -7,3 -4.707,3 4.707,3 0,0
KFIAS230 Other changes Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
KFIAS179 Cash flow financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18.483,2 -799,5 -19.282,7 2.064,4 -17.218,3 4.707,3 -12.511,0
KFIAS190 Changes in liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.022,7 2,6 -1.020,0 34,8 -985,3 0,0 -985,3
KFIAS200 Liquidity opening values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.068,2 0,0 2.068,2 0,0 2.068,2 0,0 2.068,2
KFIAS190 Changes in liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.022,7 2,6 -1.020,0 34,8 -985,3 0,0 -985,3
KFIAS178 Currency differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -434,2 0,1 -434,2 -21,8 -456,0 0,0 -456,0
KFIAS173 Currency differences Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426,8 -2,7 424,1 -12,9 411,2 0,0 411,2
KFIAS220 Liquidity closing values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.038,2 0,0 1.038,2 0,0 1.038,2 0,0 1.038,2
0,0000000 0,0000000 0,0000000
Equity development (IFRS)
in 1.000
2006.03 — ACTUAL
Equity (Group) Minorities Equity

Opening Balanced (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.982,7 4.380,1 38.362,8
Net loss/Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.869,7 878,9 5.748,6
Dividend distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.093,2 -759,0 -1.852,2
Currency conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397,5 13,7 411,2
Hedge Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Corr. Adjustment Hedge Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Social capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Correction Adjustment Social Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.025,7 -45,3 -1.071,0
Adj.m. item for IC balances consol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,4 0,0 8,4
First consolidation/End consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7,3 7,3 0,0
capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Acturial Gain/Loss Severance Paym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12,5 0,0 -12,5
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.700,0 0,0 -4.700,0
Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.419,5 4.475,8 36.895,3
Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
F-94
Key Figures (IFRS)
in 1.000
2006.03 2005.03
Key Figures (IFRS) ACTUAL ACTUAL
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303.817,8 332.641,4
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.030,1 22.874,2
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.209,0 26.528,4
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.700,7 55.470,5
Investment (including shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.496,6 6.097,5
Operative cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.730,9 10.370,7
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.093,2 -1.002,4
Net financial debt (closing value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.859,6 53.249,1
OM (operating margin) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,3% 6,9%
Sales/Capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,6 3,2
ROCE (Return on capital employed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,4% 22,2%
WC in % of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,4% 16,7%
Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,0% 138,8%
F-95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2005/06
A. General information and nature of operations
The principal activities of voestalpine Stahlhandel GmbH (VASTH) and its subsidiaries (hereinafter
referred to as the “Group”) is the trade of materials made from steel.
voestalpine Stahlhandel GmbH is the Group’s ultimate parent company which prepares consolidated
financial statements. It is incorporated and domiciled in Linz, Austria. The address of voestalpine Stahlhandel
GmbH registered office is Lunzerstrasse 105, 4020 Linz, Austria. VASTH Group is part of the voestalpine AG
Group.
The consolidated financial statements for the year ended March 31, 2006 (including the comparatives for
the year ended March 31, 2005) have been prepared in accordance with International Financial Reporting
Standards (IFRS) as published by the International Accounting Standard Board (IASB) and adopted by the
European Union. The Group applies IAS 19.93A retrospectively. The figures for the prior year have been
adjusted accordingly.
The consolidated financial statements are presented in euros (functional currency of the parent company).
The consolidated income statement is prepared based on the cost-of-sales procedure.
In 2005/06 VASTH outsourced its business activities of “Grobblech-Anarbeitung” to voestalpine
Anarbeitung GmbH, a subsidiary of voestalpine Stahl GmbH. Therefore, comparability of the figures 2005/06 to
2004/05 is limited.
B. Summary of accounting policies
Consolidation methods
The financial statements of all subsidiaries are prepared in accordance with standard accounting practices
and valuation methods. For entities consolidated using the equity method, local reporting and valuation methods
are maintained if the relevant amounts are immaterial.
Where subsidiaries are consolidated for the first time, the assets and liabilities and contingent liabilities
are assessed at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recognized as goodwill. Any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired is credited to profit and loss in the period of
acquisition. Hidden reserves or charges attributable to minority shareholders are also disclosed.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Foreign currency translation
In accordance with IAS 21, the annual financial statements of foreign companies included in the
consolidated financial statements are translated into euros using the functional currency method. The relevant
national currency is the functional currency in all cases since these entities operate independently from a
financial, economic and organizational perspective. Assets and liabilities have been translated into Euros at the
closing rate at the balance sheet date. Income and expenses have been converted into Euros at the average rates
over the reporting period.
Equity items are valued at historical exchange rates. Goodwill from acquisitions of foreign entities has
been calculated in Euros following initial consolidation.
Any currency translation differences have been directly charged or credited to the currency translation
reserve in equity.
In the separate financial statements of the consolidated entities, foreign currency transactions are
translated into the functional currency of the individual entity using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of remaining balances at year-end exchange rates are recognized in the consolidated income
statement.
Estimates
The preparation of consolidated financial statements in conformity with IFRS requires estimates and
assumptions that affect the reported amounts of assets and liabilities, and/or income and expenses. Actual results
may differ from these estimates. Estimates are made with the intention of adhering to the “true and fair view”
principle.
F-96
estimates are recognized in the period in which the estimate is revised.
Recognition of revenues and expenses

Revenues arising from the provision of goods and services are realized when all major risks and
opportunities arising from the delivered object have been transferred to the buyer. Operating expenses are
recognized when a service is rendered or a delivery is received, or at the point such liability is incurred.
Borrowing costs
All borrowing costs are expensed as incurred.
Property, plant and equipment

Property, plant and equipment are stated at acquisition cost or manufacturing cost less accumulated
depreciation and any impairment losses.
The cost of self-constructed assets includes the cost of materials, direct labor and an appropriate
proportion of production overheads. Costs of borrowing are recognized in the consolidated income statement in
the period in which they are incurred.
Depreciation is charged on a straight-line basis over the estimated useful lives. Land is not depreciated.
The estimated useful lives are as follows:
Š Buildings 2.0% – 5.0%
Š Plant and equipment 10.0% – 25.0%
Š Fixtures and fittings 10.0% – 25.0%
Investment property is recognized at depreciated cost.
Leasing
Leases are classified as finance leases when these are viewed commercially as asset purchases with long-
term finance. All other leases are classified as operating leases. Rentals payable under operating leases are
recognized as expenses in the consolidated income statement.
Assets held under finance leases are initially recognized as assets of the Group at their fair value or, if
lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The
corresponding liability to the lessor is included in the consolidated balance sheet as a finance lease obligation.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as
comparable acquired assets or, where shorter, over the term of the relevant lease. The Group does not act as a
lessor.
Goodwill
All corporate acquisitions are accounted for by applying the purchase method.
There is no goodwill. Therefore, none is capitalized.
Other intangible assets

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognized as an expense as incurred. In accordance with IAS 38.57,
development expenditure is capitalized if the relevant criteria are met. Expenditure on internally generated
goodwill and brands is immediately recognized as an expense as incurred.
Other intangible assets that are acquired by the Group are stated at cost less accumulated scheduled and
unscheduled amortization. Amortization is charged to the income statement on a straight-line basis over the
estimated useful lives of the asset (3 to 5 years).
Impairment testing of goodwill, other intangible assets and property, plant and equipment
Individual assets or cash-generating units that include goodwill and other intangible assets with an
indefinite useful life are tested for impairment at least annually. All other individual assets or cash-generating
units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
F-97
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). In particular, goodwill is allocated to those cash-
generating units that are expected to benefit from synergies of the related business combination and represent the
lowest level within the Group at which the management controls the related cash flows.
An impairment loss is recognized for the amount by which the asset’s or cash-generating unit’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of net selling price and the value
in use. Impairment losses recognized in respect of cash-generating units, to which the goodwill has been
allocated, reduce the carrying amount of goodwill initially. Any remaining impairment loss reduces pro rata the
carrying amount of the assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment
loss previously recognized may no longer exist.
Investments in associates
The results and assets and liabilities of associates (entities controlled by voestalpine Stahlhandel GmbH
(and their subsidiaries) and companies over which significant influence is exercised), which are not of minor
importance, are incorporated in the consolidated financial statements using the equity method.
Other financial assets
Investments in subsidiaries and associates, which are not incorporated in these consolidated financial
statements using the full, proportionate or equity consolidation method, are reported under “Other financial
assets” at acquisition cost or their lower market value.
Securities are stated at acquisition cost or at fair value and serve mainly to cover severance payments and
pensions.
Taxation
Income tax expense represents the sum of the tax currently payable and of my deferred tax. The tax
currently payable is based on the taxable profit of the year and is calculated using tax rates that have been
enacted at the balance sheet date.
In accordance with IAS 12, all temporary valuation and reporting differences between tax values and
consolidated financial statements are included in the deferred taxes. Deferred tax assets on losses carried forward
are capitalized to the extent that they will be reversed within a foreseeable period.
The calculation of deferred taxes is based on the respective local tax rates. Fixed future tax rates are also
taken into account for deferred values.
Inventories
Inventories are stated at the lower of the cost and net realizable value. Net realizable value represents the
estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and
distribution.
Where inventories are comparable, costs are determined by the weighted average method or similar
methods. Costs include directly attributable expenses and all proportionate cost of materials and production
overheads, based on normal capacity usage. Interest charges and selling and administrative expenses are not
capitalized.
Trade and other receivables
Trade and other receivables are stated at nominal value. Individually identifiable risks are reflected in
credit insurances. Non-interest or low-interest-bearing receivables with in a remaining term in excess of one year
are recorded at a discounted present value.
Accruals are reported under other receivables and other liabilities.
Cash and cash equivalents
Cash and cash equivalents include cash at banks, cash on hand and checks and are recognized at fair
value.
Pensions and other employee obligations
Employee benefits include provisions for severance payments, pensions and long-service bonuses and are
recognized according to IAS 19 using the projected-unit-credit-method.
F-98
Employees of Austrian group companies, who began their employment before January 1, 2003, receive a
one-off severance payment, if their employment is terminated by the employer or if they retire.
The payment is dependent on the number of years of service and the relevant salary or wages at the time
the employment ceases. For employment beginning after December 31, 2002, this obligation has been converted
into a contribution-oriented system. These payments to external pensions funds are recognized as expenses.
Within the Group (especially in Austria) there are defined contribution and defined benefit pension plans.
Defined contribution plans carry no future obligation after the payment of premiums. Defined benefit plans
guarantee the employee a specific retirement benefit, which is based on a certain percentage of there salary or
wage depending on years of service or on a valorized fixed amount per year of service. Defined benefit plans are
stated in the financial statements of the respective entities until the contractual date when the pensions become
irrevocable. After that date the pensions are covered by the pension fund.
The Group applies IAS 19.93A retrospectively. Actuarial gains and losses affecting provisions for
severance payments and pensions are recognized in the year in which they occur outside profit or loss. The
previous year has been adjusted accordingly. Actuarial gains and losses affecting long-service bonuses are
recognized in the consolidated income statement as incurred.
The valuation of employee benefits is based on the following parameters:
2005/06 2004/05
Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % 4.5 5.5
Salary/Wage increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % 3.0 3.0
Pension increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % 2.5 2.5
Retirement age women/men . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Years max. 60/65 60/65
Life expectancy tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Heubeck 1998 Heubeck 1998
Interest expenses related to employee benefits are included in the “finance costs” in the consolidated
income statement.
Other provisions
Other provisions are stated at the amount which reflects the most probable value based on a reliable
estimate, when the Group has a present obligation as a result of a past event, where it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation. If the effect is material,
provisions are determined by discounting.
Liabilities
Liabilities are stated at their nominal value or their redemption value.
Financial instruments
Liquidity risk — Financing
The liquidity risk indicates the ability to raise funds at any time in order to clear liabilities.
The essential instrument for controlling the liquidity risk is a precise financial plan, which, ensuing from
the operative companies, is submitted quarterly directly to the Group treasury of voestalpine AG. A tool
developed by the Group for long-term financial planning locates any financing gaps. The funding requirements
and bank credit lines are determined from the consolidated results.
Financing of operating funds is carried out by the voestalpine AG-Group treasury. A central clearing
system implements a daily intra-group financial equalization adjustment. Companies with liquidity surpluses put
the funds indirectly at the disposal of companies with liquidity requirements. The excess liquidity is placed with
the principal banks by the Group treasury. In this way a decrease in the volume of borrowings and an
optimization of the net interest income is achieved.
The sources of financing are selected on the basis of the principle of bank independence. Financial
relationships currently exist with about 11 different domestic and foreign banks.
Credit risk
Credit risk describes losses which can occur through non-fulfillment of contractual obligations of
individual partners.
The credit risks of the underlying transactions are kept low by precise management of receivables.
Roughly 70% of the underlying transactions are hedged through credit insurance. In addition, there are bank
securities (guarantees, letters of credit).
F-99
Currency risk
As the subsidiaries of voestalpine Stahlhandel group act on local markets, there are no material currency
risks.
Interest rate risk

The items on the assets side are mainly invested in the securities funds V47. There are three sub-funds,
which are contained in two umbrella funds, one of which is used to cover severance pay and pension obligations.
In valuing securities, the fair value option is used and is allocated to the category “available for sale” in the
balance sheet.
Financial risk management — Corporate Finance-Organization

Financial risk management is centrally organized by voestalpine AG pursuant to guideline competence,
strategy determination and goal definition. The existing rules cover targets, principles, responsibilities and
competences for both the voestalpine AG Group treasury and the individual companies. In addition, they treat the
topics of pooling, money market, credit and securities management, foreign exchange, interest and liquidity risk.
The voestalpine AG Group treasury, acting as a service center, is responsible for implementation. Three different
departments are responsible for the conclusion of contracts, the processing of transactions and the recording of
entries, which guarantees a six-eyes principle. The guidelines and observance thereof, as well as the whole
business process, are audited annually by an additional external auditor.
Up to 90 % of the non current assets are financed by shareholder equity. The equity ratio has been stable
at approximately 27 % for the last years.
It is part of our corporate policy to keep a constant watch on financial risks, to quantify them and to hedge
against them, where it is wise to do so. Our willingness to accept risk tends to be low. Risks posing a threat to the
continued existence of the companies have to be hedged and going concerns have to be hedged. In other respects,
the strategy aims to reduce fluctuations of cash flow and income.
C. Companies included in the consolidation

The scope of consolidation (see appendix to the notes “Group companies”) is established in accordance
with IFRS. In addition to the financial statements of voestalpine Stahlhandel GmbH , the consolidated financial
statements also incorporate the financial statements of entities controlled by voestalpine Stahlhandel GmbH (and
their subsidiaries) and companies over which significant influence is exercised (associates).
Subsidiaries are entities controlled by the Group. Control exists when the Group has the direct or indirect
potential to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The
financial statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases.
Associates are those entities over which the Group has significant influence without having control over the
financial and operating policies. The consolidated financial statements include these entities using the equity
method of consolidation, from the date that significant influence commences until the date that significant influence
ceases. The Group’s investments in associates are reported in the appendix to the notes “Group companies”.
The following table shows the values (100%) for associates consolidated in the financial statements by
the equity method of consolidation:
VASTAD+Zimmermann (TEUR) 31.03.06 31.03.05
Non current asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 859,3 989,1
Current asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.344,9 7.530,5
8.204,2 8.519,6
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907,7 563,4
Non current liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507,8 379,3
Current liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.788,7 7.576,9
8.204,2 8.519,6
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.659,5 22.421,8
Profit of the Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,4 89,5
There were no changes to companies included in the consolidation during the reporting year.
F-100
D. Notes and other remarks
voestalpine Stahlhandel-group is one cash generating unit, therefore only a geographical segmentation on
figures is reported based on the site of the companies, which are primarily active on the local markets.
Austria Czech Republic Croatia Total Group
In thousands of euros 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05
External revenue . . . . 242.591,5 262.575,3 39.718,2 46.247,0 21.508,2 23.819,1 303.817,8 332.641,4
Segment assets . . . . . . 83.504,5 103.073,8 36.794,9 30.840,3 12.957,0 13.363,0 133.256,5 147.277,1
Investments . . . . . . . . 1.025,1 2.099,4 2.187,9 3.531,8 283,6 466,2 3.496,6 6.097,5
2. Other operating income
TSD EUR 2005/06 2004/05
Net gain on disposal of property plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.012,0 1.504,0
Release of unused provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369,4 -68,5
Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.876,2 1.920,6
4.257,6 3.356,1
3. Other operating expenses

TSD EUR 2005/06 2004/05
Taxes and other income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,0 230,0
Impairment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Losses on disposal of property plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954,0 1.369,6
1.119,0 1.599,6
4. Share of profit of associates

In thousands of euros 2005/06 2004/05
Income from associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282,1 77,2
Expenses from associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -65,3 -65,3
216,8 11,9
Income from associates attributable to VASTAD, ZIMMERMANN

5. Finance income
TSD EUR 2005/06 2004/05
Income from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377,7 362,0
of which from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191,6 272,0
Income from other long term securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,3 118,2
Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914,9 1.234,6
Income from disposals and remeasurement of investments in fair value . . . . . . . . . . . . . . . . . . 16,6 18,3
1.406,5 1.733,1
6. Finance costs
TSD EUR 2005/06 2004/05
Expenses from investments
net loss on remeasurement of investments of fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
expenses from participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 610,0
other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
0,0 610,0
Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.038,1 2.672,6
2.038,1 3.282,6
F-101
7. Income taxes
Income taxes include income taxes paid and owed by Group companies as well as deferred taxes.
TSD EUR 2005/06 2004/05
Current tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.160,0 2.669,4
Deferred tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -293,4 4.385,7
866,6 7.055,1

The carrying amount of property, plant and equipment for the periods presented in the consolidated
financial statements as at March 31,2006 are reconciled as follows:
Advance
payments
Fixtures and plant
Land and Plant and and under
In thousands of euros buildings equipment fittings construction Total
Gross carrying amount . . . . . . . . . . . . . . . . . . . . . . . . 50.626,2 22.861,0 4.850,6 186,7 78.524,5
Accumulated depreciation and impairment . . . . . . . . -18.799,0 -15.290,5 -3.607,3 0,0 -37.696,7
Carrying amount as of April 1, 2004 . . . . . . . . . . . . . 31.827,2 7.570,5 1.243,4 186,7 40.827,8
Carrying amount as of March 31, 2005 . . . . . . . . . . . 33.349,7 6.926,7 1.212,0 502,4 41.990,7
Carrying amount as of March 31, 2006 . . . . . . . . . 28.658,8 5.687,9 1.466,5 294,5 36.107,7
Carrying amount as of April 1, 2004 . . . . . . . . . . . . . 31.827,2 7.570,5 1.243,4 186,7 40.827,8
Changes through business combinations . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,7 695,6 562,0 3.414,2 4.789,5
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.405,4 385,2 100,5 -3.113,2 -222,1
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.424,9 -3.321,5 -688,5 -5,4 -6.440,3
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 649,2 1.313,1 -98,0 0,0 1.864,3
Net exchange differences . . . . . . . . . . . . . . . . . . . . . . 775,1 283,7 92,6 20,0 1.171,4
Carrying amount as of March 31, 2005 . . . . . . . . . . . 33.349,7 6.926,7 1.212,0 502,4 41.990,7
Changes through business combinations . . . . . . . . . . -8.876,5 -6.454,2 -396,7 0,0 -15.727,4
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 55,1 742,5 1.918,5 2.716,1
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,1 1.816,0 77,7 -2.143,7 -35,9
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -675,1 -1.012,6 -1.472,0 0,0 -3.159,7
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.139,1 4.135,2 1.241,2 0,0 9.515,5
Net exchange differences . . . . . . . . . . . . . . . . . . . . . . 507,6 221,8 61,9 17,3 808,6
Carrying amount as of March 31, 2006 . . . . . . . . . 28.658,8 5.687,9 1.466,5 294,5 36.107,7
“Changes through business combinations” are due to outsourcing activities of “Grobblech-Anarbeitung”.

At March 31, 2006 no restrictions on title to property, plant and equipment amounted. (March 31, 2005:
EUR 0 million).
There are obligations existing under operating lease agreements relating to property, plant and equipment
not stated in the consolidated balance sheet. These obligations are payable as follows:
TSD EUR 2005/06 2004/05
Less than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566,0 852,0
Between one and five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.732,0 4.191,0
More than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.682,0 720,0
3.980,0 5.763,0
F-102
9. Other intangible assets

Patents and Advanced
In thousands of euros trademarks payments Total
Gross carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.637,6 6,7 2.644,3
Accumulated depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.124,1 0,0 -2.124,1
Carrying amount as of April 1, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513,6 6,7 520,3
Gross carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.392,3 0,0 2.392,3
Accumulated depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.847,2 0,0 -1.847,2
Carrying amount as of March 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545,1 0,0 545,1
Gross carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687,1 588,1 1.275,3
Accumulated depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . -423,4 0,0 -423,4
Carrying amount as of March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,7 588,1 851,8
The carrying amounts of other intangible assets for the periods presented in the consolidated financial
statements as of March 31, 2006, are reconciled as follows:
Patents and Advanced
In thousands of euros trademarks payments Total
Carrying amount as of April 1, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513,6 6,7 520,3
Changes through business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -179,7 0,0 -179,7
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,0 0,0 219,0
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25,1 -6,7 -31,8
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Net exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,3 0,0 17,3
Carrying amount as of March 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545,1 0,0 545,1
Changes through business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -160,9 0,0 -160,9
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -167,0 588,1 421,1
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,0 0,0 36,0
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Net exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,5 0,0 10,5
Carrying amount as of March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,7 588,1 851,8
10. Investments in associates and other financial assets (non-current)

Invest-
Affiliated ments in Other Advance
In thousands of euros companies associates investments Securities Loans payments Total
Gross carrying amount . . . . . . . . . . . . . . . . . . 2.154,5 708,6 643,0 2.047,3 1.000,0 0,0 6.553,4
Accumulated depreciation and
impairment . . . . . . . . . . . . . . . . . . . . . . . . . -1.971,3 -130,6 -554,5 -100,1 0,0 0,0 -2.756,5
Carrying amount as of April 1, 2004 . . . . . . . 183,2 578,0 88,5 1.947,2 1.000,0 0,0 3.796,9
impairment . . . . . . . . . . . . . . . . . . . . . . . . . -2.581,3 -195,9 -554,5 -77,6 0,0 0,0 -3.409,3
Carrying amount as of March 31, 2005 . . . . . 775,2 538,0 88,5 1.787,0 1.300,0 0,0 4.488,7
impairment . . . . . . . . . . . . . . . . . . . . . . . . . -2.581,3 -261,2 -554,5 -42,8 0,0 0,0 -3.439,8
Carrying amount as of March 31, 2006 . . . 970,6 702,9 88,5 1.475,7 1.170,0 0,0 4.407,7
F-103
Loans are composed as follows:
TSD EUR 31.03.2006 31.03.2005
Loans to affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.170,0 1.300,0
Loans to associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Loans to other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
1.170,0 1.300,0
Invest-
Affiliated ments in Other Advance
In thousands of euros companies associates investments Securities Loans payments Total
Carrying amount as of April 1, 2004 . . . . . . . 183,2 578,0 88,5 1.947,3 1.000,0 0,0 3.797,0
Changes through business combinations . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.203,0 11,9 0,0 0,0 300,0 0,0 1.514,9
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,7 -51,9 0,0 -172,8 0,0 0,0 -227,4
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . -610,0 0,0 0,0 0,0 0,0 0,0 -610,0
Remeasurement at fair value . . . . . . . . . . . . . . 0,0 0,0 0,0 12,6 0,0 0,0 12,6
Net exchange differences . . . . . . . . . . . . . . . . 1,7 0,0 0,0 0,0 0,0 0,0 1,7
Carrying amount as of March 31, 2005 . . . . . 775,2 538,0 88,5 1.787,0 1.300,0 0,0 4.488,8
Changes through business combinations . . . . 0,0 0,0 0,0 -302,6 0,0 0,0 -302,6
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,4 216,8 0,0 0,0 0,0 0,0 409,2
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 -51,9 0,0 -25,3 -130,0 0,0 -207,2
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Remeasurement at fair value . . . . . . . . . . . . . . 0,0 0,0 0,0 16,5 0,0 0,0 16,5
Net exchange differences . . . . . . . . . . . . . . . . 3,0 0,0 0,0 0,0 0,0 0,0 3,0
Carrying amount as of March 31, 2006 . . . 970,6 702,9 88,5 1.475,7 1.170,0 0,0 4.407,7
11. Deferred tax assets and liabilities

In accordance with IAS 12.39 deferred taxes on differences resulting from investments in subsidiaries
were not recognized.
Temporary differences between tax values and consolidated financial statements are attributable to the
following:
Assets Liabilities
In thousands of euros 31.03.2006 31.03.2005 31.03.2006 31.03.2005
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.751,1 1.879,0 1.061,4 772,2
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,8 153,0 106,0 326,0
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.141,3 2.079,0 6.327,9 8.332,8
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 405,0 0,0 0,0
4.897,2 4.516,0 7.495,3 9.431,0
Consolidation:
Intercompany elimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0
Revalued assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 278,8
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0
4.897,2 4.516,0 7.495,3 9.709,8
Corporate tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,0% 25,0% 25,0% 25,0%
Deferred tax assets/liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.224,3 1.129,0 1.873,8 2.427,5
Netting out of deferred tax assets/liabilities to the same tax
authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -164,9 -223,3 -164,9 -223,3
Net deferred tax assets/liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.059,4 905,8 1.708,9 2.204,2
F-104
12. Inventories
In thousands of euros 03/31/2006 03/31/2005
Raw materials and consumables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,8 48,1
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.012,8 50.911,9
As yet unbillable services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,5 173,3
45.083,1 51.133,3
13. Trade and other receivables

of which over of which over
TSD EUR 31.03.2006 one year 31.05.2005 one year
Trade receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.750,2 6,0 40.756,9 6,4
Receivable from affiliated companies . . . . . . . . . . . . . . . . . . . . 1.623,7 0,0 2.017,4 0,0
Receivable from other investments . . . . . . . . . . . . . . . . . . . . . . 13,6 0,0 160,8 0,0
Other trade and other asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.749,4 0,0 2.432,7 0,0
40.136,9 6,0 45.367,8 6,4
14. Cash and cash equivalents

TSD EUR 31.03.2006 31.05.2005
Cash on hand, cash at banks, checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.038,2 2.068,2
15. Equity
TSD EUR 31.03.2006 31.05.2005
equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.895,3 38.362,8
Minority interest
Minority interest as of March 31, 2006 results from minority shares in the equity of Veting voestalpine
d.o.o. and Köllensperger Stahlhandel GmbH & Co KG.
TSD EUR 31.03.2006 31.05.2005
minory interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.475,8 4.380,1
16. Pensions and other employee obligations

Provisions for severance payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.011,7 4.837,0
Provisions for pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.194,6 1.154,8
Provisions for long-service bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.453,7 1.202,6
7.660,0 7.194,4
The calculation of the provisions for pensions was based on an expected interest rate of 6.0% applied to
the plan assets. The actual interest rate was 12.5 %.
F-105
17. Provisions
Changes
through
Balance business Net Balance
as of combi- exchange as of
In thousands of euros 04/01/2005 nations differences Use Reversal Addition Transfers 03/31/2006
Non-current provisions
Other personnel expenses . . . . . . . . . 28,6 0,0 0,0 0,0 0,0 0,0 -28,6 0,0
Warranties . . . . . . . . . . . . . . . . . . . . . 119,9 0,0 1,1 0,0 -60,7 0,0 0,0 60,4
Other non-current provisions . . . . . . 273,1 0,0 2,8 0,0 -156,1 0,0 28,6 148,5
421,6 0,0 4,0 0,0 -216,7 0,0 0,0 208,9
Current provisions
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 29,7 0,0 0,0 -23,9 -1,5 34,0 0,0 38,3
Vacations . . . . . . . . . . . . . . . . . . . . . 475,5 -151,5 0,0 -324,0 0,0 405,7 0,0 405,7
Other personnel expenses . . . . . . . . . 2.252,9 -357,5 0,0 -1.777,1 -118,3 778,6 0,0 778,6
Warranties . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Anticipated losses . . . . . . . . . . . . . . . 14,4 0,0 0,0 -14,4 0,0 0,0 0,0 0,0
Other current provisions . . . . . . . . . . 266,1 0,0 0,0 -237,2 -16,1 278,4 0,0 291,2
3.038,6 -509,0 0,0 -2.376,6 -135,9 1.496,7 0,0 1.513,8
3.460,2 -509,0 4,0 -2.376,6 -352,6 1.496,7 0,0 1.722,7

18. Financial liabilities
Up to one year Over one year
TSD EUR 31.03.2006 31.03.2005 31.03.2006 31.03.2005
Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.356,0 15.156,1 2.275,9 3.711,5
Liabilities from finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,8 0,0 0,0 0,0
Liabilities from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . 28.210,2 38.360,8 0 0,0
Liabilities from other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0 0,0
Other payables and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 249,8 0,0 0,0
45.569,9 53.766,7 2.275,9 3.711,5
19. Trade and other payables

TSD EUR 31.03.2006 31.03.2005
Preypayments received on orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Trade payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.372,1 20.010,0
Liabilites from bill payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Liabilities from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.331,6 10.617,8
Liabilities from other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374,4 412,1
Current tax liabilites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.797,6 1.202,7
Other payables and other liabilites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.548,0 6.334,4
37.423,7 38.577,1
20. Contingent liabilities

TSD EUR 31.03.2006 31.03.2005
Obligations from bills payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 30,6
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0
Other contingent liabilites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 2.538,5
0,0 2.569,1
21. Related parties and corporate bodies and employees

Business relations between the Group and non-consolidated subsidiaries as well as companies consolidated
at equity are dealt with at arm’s length.
The impact on the Group’s financial position, financial performance and cash flows of the non-consolidation
of the companies is not significant.
F-106
Employee information
Total personnel expenses are classified as follows:
Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.502,6 3.555,6
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.571,4 12.616,5
Expenses for severance payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329,9 369,1
Expenses for pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,3 -89,2
Expenses for statutory benefits and payroll-based contributions . . . . . . . . . . . . . . . . . . . . . 3.199,3 4.176,2
Other social expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,4 396,9
-16.973,9 -21.025,1
Total number of employees:

Balance sheet date Average
2005/06 2004/05 2005/06 2004/05
Laborers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 171 146 179
Salaried employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 319 296 326
Apprentices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 25 18 25
469 515 460 530
22. Significant events after the balance sheet date

There were no significant events after the balance sheet date.
23. Dividend
The financial statements of voestalpine Stahlhandel GmbH GmbH as of March 31, 2006, are the basis for
the dividend. These financial statements report a balance sheet profit of EUR 5.8 million (HGB). The
Management Board will therefore recommend a dividend payable to voestalpine Stahl GmbH of EUR 1.5 million
(2004/05: EUR 0)
Linz, May 17, 2006
Jürgen Glück Johannes Kasticky
Appendix to the notes: Group companies
F-107
Appendix
share
consolidation Group companies voestalpine Stahlhandel-group in % shares held by
KV Köllensperger Stahlhandel GmbH & Co KG AUT 60,000% voestalpine Stahlhandel GmbH
KV NEPTUN STAHLHANDEL GmbH AUT 100,000% voestalpine Stahlhandel GmbH
KV voestalpine Stahlhandel spol.s.r.o. CZE 100,000% voestalpine Stahlhandel GmbH
KV voestalpine Stahlhandel GmbH AUT 100,000% voestalpine Stahl GmbH
KV Veting voestalpine d.o.o. HRV 60,000% voestalpine Stahlhandel GmbH
KE VAS — TAD Edelstahl Handels GmbH AUT 50,000% voestalpine Stahlhandel GmbH
KE zimmermann STAHLHANDEL GmbH AUT 99,800% NEPTUN STAHLHANDEL GmbH
KO ARGE Baustahl Eisen Blasy-Neptun GmbH AUT 50,000% NEPTUN STAHLHANDEL GmbH
KO Vereinigte Biege-Gesellschaft m.b.H. AUT 67,000% NEPTUN STAHLHANDEL GmbH
KO BWS BEWEHRUNGSSTAHL GmbH AUT 36,000% NEPTUN STAHLHANDEL GmbH
KO Köllensperger Stahlhandel GmbH AUT 60,000% voestalpine Stahlhandel GmbH
KO voestalpine Stahlhandel Polska Sp. z o.o. POL 100,000% voestalpine Stahlhandel GmbH
KO VOEST-ALPINE GmbH München DEU 100,000% voestalpine Stahlhandel GmbH
KO voestalpine ambient Stahlhandel S.R.L. ROM 50,939% voestalpine Stahlhandel GmbH
KO voestalpine Stahlhandel Slowakei s.r.o. SVK 100,000% voestalpine Stahlhandel GmbH
KO voestalpine Stahlhandel d.o.o. SVN 100,000% voestalpine Stahlhandel GmbH
KO voestalpine Stahlhandel Budapest Kft. HUN 100,000% voestalpine Stahlhandel GmbH
KO Veting voestalpine Stahlhandel d.o.o. BIH 100,000% Veting voestalpine d.o.o.
KO VETING-VOEST ALPINE HRV 60,000% voestalpine Stahlhandel GmbH
STAHLHANDEL GRUPA Za proizvodnju
i trgovinu metalima d.o.o. in Liquidation
K0...no consolidation KE...at equity KV...fully consolidated
F-108
STATUS REPORT
VOESTALPINE STAHLHANDELS GROUP 31 MARCH 2006
1. Economic environment
Š Development of the economy and the market
The growth rates in Austria for 2005 for those equipment and construction investments that were relevant
for the steel trade reached an average of 0.9% (source: HIS). Because the trend for investments was poor, steel
consumption in Austria was at the same low level as 2004. By the end of the 2005 calendar year, investments
recovered slightly, and that recovery was mirrored in the increased sales figures of voestalpine Stahlhandel
GmbH.
The Austrian subsidiaries, Köllensperger Stahlhandel GmbH & Co KG and Neptun Stahlhandel GmbH,
showed an analogous development, particularly in the warehousing business.
The sales of the Eastern European subsidiaries, Veting voestalpine d.o.o. and voestalpine Stahlhandel
spol. s.r.o., declined slightly.
However, by the end of the year, these two companies were experiencing a marked upturn in demand on
the local markets.
During the previous business year, there were no major consolidations in the Austrian steel trade. Rumors
about a possible taker of Eberhardt, steel trader in Graz, by another Graz-based steel trader (Kovac) cannot be
assessed at the moment.
Š Raw materials and energy
The first quarters of the business year were characterized by falling prices for steel products. This
development was the result of how the market had overheated in 2004 because of the “China factor.” Since the
end of the business year, one can see a trend reversal in the raw materials sector; for example, the price for scrap
metal increased between November 2005 and March 2006 by about 20%. One can assume that the prices for raw
materials will keep climbing until the fall of 2006.
2. Business performance and status

The entire past business year was characterized by a continuation of the price/quantity war in those
markets where the Stahlhandels Group is present. The reason is the overall decline of the quantities on the
Austrian and Eastern European steel market. As a result of this cutthroat competition, the profit margin came
under massive pressure and was below the budgeted figures throughout the entire business year.
The margin situation is similarly difficult both in Austria and abroad. Currently, a trend reversal is not in
sight.
Therefore, it was particularly important to implement the measures to improve the operating result that
had been initiated during the past business year (for example, introduction of the trade collective agreement at
voestalpine Stahlhandel GmbH).
In the sector of transport logistics, voestalpine Stahlhandel GmbH and Neptun Stahlhandel GmbH
switched from Logserv to Gebrüder Weiss.
At voestalpine Stahlhandel GmbH, EUR 43,000.00 were realized from the sale of non-essential assets.
Š Development of revenue according to industries, regions, etc.
The largest sales were in the steel and machine construction sectors, the building and the building
supply industry, and in the automotive sector. The percentage of exports in the Stahlhandels Group is
about 15%.
Š Key figures
Š Key performance indicators
Š EBIT and EBIT margin EUR 7,030,000 margin 2.3%
Š EBITDA and EBITDA margin EUR10,210,200 margin 3.4%
Š EBT EUR 6,620,000
Š Net income EUR 5,750,000
Š Key figures for asset and capital structure
Š Equity ratio 27.7%
F-109
3. Risk management
The voestalpine Stahlhandels Group sees systematic risk management as an integral component of its
business processes and its operational procedures, in other words, a core management responsibility.
voestalpine Stahlhandel GmbH implemented a risk management system in 2001. The risk management
system identifies and evaluates potential risks and, using this as a basis, appropriate measures to respond to and
resolve risks are selected and implemented.
Along the same lines as the risk management system that exists at voestalpine Stahlhandel GmbH,
equivalent systems have been implemented at the fully consolidated companies (Köllensperger Stahlhandel
GmbH & Co KG in 2001, Neptun Stahlhandel GmbH in 2002, Veting voestalpine d.o.o. in 2002, and at
voestalpine Stahlhandel spol.s.r.o. in 2001).
Appropriate measures have been developed for identified risks. The measures developed were directed at
lowering the extent of damage and/or reducing the probability of an occurrence.
Operational risk management is based on a revolving process, which is run through at least once a year
and which enables early identification of potential risks. The identified risks must fulfill the following criteria:
“describable,” “ratable,” and “controllable.” General, market, personnel, operational, environmental, and IT risks
are documented, among others.
Š Liquidity risk
An essential instrument to manage liquidity risk is precise financial planning that is prepared quarterly
on a revolving basis and that is binding for the entire Stahlhandels Group.
Š Credit risk
The credit risk of underlying transactions is largely covered by credit insurance (ÖKV) and security
deposits through banks (guarantees, letters of credit).
In the Eastern European companies, this process is currently being set up.
4. Investments
In the past business year, the largest investment was the implementation of the new ERP system,
Microsoft Navision, with an estimated preliminary amount of EUR 600,000 at voestalpine Stahlhandel GmbH.
Additional investments were made, in particular at our subsidiary voestalpine Stahlhandel spol.s.r.o. in
Vyskov, primarily associated with the warehouse including equipment in the amount of EUR 2.19 million.
5. Organization
Competition that is increasingly predatory has led to a change in the organizational structure at
voestalpine Stahlhandel GmbH in order to adapt to the changed market situation. The focus was placed on
product-oriented sales. In addition, the operating procedures were made leaner by merging staff units or not
replacing staff.
In the subsidiaries, there has been no change in the organizational structure in this regard.
6. Employees
As of the end of the 2005/06 business year, the voestalpine Stahlhandels Group had 451 employees
(excluding apprentices). Compared to the previous year (490), this corresponds to a reduction by 39 employees.
voestalpine Stahlhandel GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Köllensperger Stahlhandel GmbH & Co KG . . . . . . . . . . . . . . . . . . . . . . . 46
voestalpine Stahlhandel spol.s.r.o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Veting voestalpine d.o.o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Neptun Stahlhandel GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
The reduction of the number of employees at voestalpine Stahlhandel GmbH has resulted largely from
divesting the GBS activities to voestalpine Anarbeitung GmbH and from adjusting the organizational structure to
the changed market environment.
During the 2005/06 business year, the implementation of the “LIFE” program at voestalpine Stahlhandel
GmbH made progress.
F-110
The general goal of the “LIFE” program is to continue to improve the company’s attractiveness as an
employer and to counteract the critical demographic development on the labor market that is anticipated for the
near future. The main objective is to adapt the working hours, work processes, and the workplaces to the
individual life phases of the employees, in order to ensure an even more productive collaboration of all the
generations working within the company. These activities are being accelerated in the current business year,
whereby the focus is on the older employees, a group that is increasingly gaining importance.
During the 2005/06 business year, there was an increase in work-related accidents in the voestalpine
Stahlhandels Group (+ 24%). There was a total of 21 work-related accidents.
7. Environment
Not relevant for the companies in the Stahlhandels Group.
8. Research & Development

As trading companies, the companies in the voestalpine Stahlhandels Group do not conduct any research
and development.
9. Major events after the balance sheet date

There were no major events after the balance sheet date.
10. Quality management systems

The implemented QM system that has been certified in accordance with the ISO 9001:2000 norm of the
voestalpine Stahlhandels Group contains current corporate policy, corporate goals and standards, as well as the
organizational structure.
The QM system regulates the processes and responsibilities, among other things, so that the customer
requirements (products and services) can be optimally implemented. The quality policies place the customer in
the center of the business processes.
11. Outlook
Currently, there are clear signs that in the coming business year the steel prices will develop similarly to
2004/05, which was a boom year. This development applies to the entire Stahlhandels Group.
All of the well-known steel manufacturers have announced steel price increases — some of which are
massive. The predicted increases, however, are not the result of demand, but of the changed supply streams of the
plants.
The implementation of the expected price increases and the communication with our clients will be a
tough job this year. However, we are convinced that this will be successful because of the close and long-term
relationships with our customers.
Additionally, we need to optimize inventory management and to keep a close eye on the company’s
debtors because of the rising steel prices.
Executive Management
Johannes Kasticky Jürgen Glück
Linz, May 2006
F-111
Unaudited Summary Financial
Statements for the nine months ended
30 September 2006 and
the twelve months ended
31 December 2005 of voestalpine
Stahlhandel GmbH
F-112
Income statement (COS)
ACTUAL ACTUAL ACTUAL

Values in 1.000 EUR 2005.09 2005.12 2006.09
9 months 12 months 9 months
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240.376,0 311.765,8 246.355,3
Material expenses (COS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -205.667,5 -268.784,7 -211.423,9
Personnel expenses (COS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.177,3 -1.504,7 -1.372,6
Regular Deprec. (COS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -577,3 -696,2 -316,5
Other operating expenses (COS) . . . . . . . . . . . . . . . . . . . . . . . . . . . -180,6 -412,7 -950,7
Cost of Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -207.602,7 -271.398,3 -214.063,7
GROSS MARGIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.773,3 40.367,4 32.291,6
Gross margin (Gross margin as % of sales) . . . . . . . . . . . . . . . . . . 13,6% 12,9% 13,1%
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.372,3 2.922,6 2.930,0
Material expenses (DC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -547,9 -627,8 -265,4
Personnel expenses (DC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9.626,2 -12.578,6 -8.787,3
Regular Deprec. (DC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.450,4 -1.905,2 -1.375,9
Other operating expenses (DC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7.834,5 -10.294,6 -7.815,3
Distribution Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19.459,1 -25.406,2 -18.243,9
Material expenses (AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -69,3 -94,0 -46,9
Personnel expenses (AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.479,0 -4.469,4 -2.951,2
Regular Depr. (AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -629,3 -778,2 -504,4
Other operating expenses (AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.608,4 -2.225,7 -1.422,8
Administration Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5.786,0 -7.567,3 -4.925,2
Material expenses (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15,1 -17,9 -7,8
Personnel expenses (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Regular Deprec. (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40,1 -49,3 -27,9
Other operating expenses (others) . . . . . . . . . . . . . . . . . . . . . . . . . . -1.269,4 -1.244,1 -983,0
Other expenses (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.324,6 -1.311,2 -1.018,7
Income from associated comp. (core business) . . . . . . . . . . . . . . . . 0,0 0,0 0,0
EARNINGS BEFORE INTEREST AND TAX (EBIT) . . . . . . . 8.575,9 9.005,2 11.033,7
Interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.264,5 1.670,8 492,9
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.784,5 -2.281,3 -1.725,6
Result from part.a.integr.comp.settlem. . . . . . . . . . . . . . . . . . . . . . -152,2 -254,5 990,7
Result from securities and finan.asset . . . . . . . . . . . . . . . . . . . . . . . 23,0 16,5 16,9
FINANCIAL RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -649,3 -848,6 -225,1
EARNINGS BEFORE TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 7.926,7 8.156,7 10.808,6
EXTRAORDINARY RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Taxes on income and earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.487,9 -2.507,3 -2.497,5
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.463,0 -1.445,3 -316,6
Tax expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.950,9 -3.952,6 -2.814,1
TAX RATE (Tax exp.as % of Earn.bef.taxes) . . . . . . . . . . . . . . . . . -49,8% -48,5% -26,0%
PROFIT FOR THE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.975,8 4.204,1 7.994,5
thereof profit/loss due to third parties . . . . . . . . . . . . . . . . . . . . . . -553,4 -699,2 -926,1
F-113
Balance sheet

ASSETS (Values in 1.000 EUR) 2005.09 2005.12 2006.09
PROPERTY, PLANT AND EQUIPMENT . . . . . . . . . . . . . . . . . . . . . 36.102,4 36.220,7 36.099,6
INVESTMENT PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
GOODWILL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
OTHER INTANGIBLE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334,0 316,8 1.010,6
AT EQUITY INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756,7 654,4 1.180,9
HOLDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863,3 865,2 1.155,6
LOANS NON-CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.300,0 1.300,0 1.040,0
RECEIVABLES — F&C NON-CURRENT . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Other long term financial investments . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Payments on account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Other Receivables - from financing>1 year . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
Securities for severance payment held as financial assets . . . . . . 1.495,0 1.487,6 1.479,1
OTHER FINANCIAL ASSETS NON-CURRENT . . . . . . . . . . . . . . . 3.658,3 3.652,8 3.674,7
DEFERRED TAX ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 944,4 934,8 1.064,2
NON-CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.795,8 41.779,5 43.030,0
INVENTORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.345,8 40.859,0 51.913,0
RECEIVABLES TRADE — THIRD PARTIES . . . . . . . . . 39.409,7 31.837,3 46.969,9
RECEIVABLES FROM AFFILIATED COMPANIES . . . . 2.093,6 852,2 1.992,6
REC. F. COMP. IN WHICH SHARES ARE HELD . . . . . . 237,4 1,5 0,0
Receivables POC-Method . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
TRADE RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.740,7 32.690,9 48.962,5
RECEIVABLES DERIVATIVES . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
RECEIVABLES FROM ASSET DISPOSALS . . . . . . . . . . 0,0 0,0 0,0
RECEIVABLES FROM PROFIT POOLS &
DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,2 39,2 0,0
RECEIVABLES OTHER . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.465,7 2.714,2 3.261,1
OTHER RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.517,9 2.753,4 3.261,1
TRADE AND OTHER RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . 45.258,6 35.444,3 52.223,7
CURRENT TAX ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,4 0,0 0,0
LOANS CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
RECEIVABLES F&C CURRENT . . . . . . . . . . . . . . . . . . . . . . . . 1.648,5 4.480,7 3.966,1
OTHER SECURITIES AND SHARES . . . . . . . . . . . . . . . . . . . . 0,0 0,0 414,6
FINANCIAL ASSETS CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.648,5 4.480,7 4.380,7
CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . . 2.235,4 4.247,3 2.870,3
CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.505,8 85.031,4 111.387,8
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.301,6 126.810,9 154.417,9
F-114
Balance Sheet

EQUITY AND LIABILITIES (Values in 1.000 EUR) 2005.09 2005.12 2006.09
EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.038,7 36.443,3 40.638,3
LIABILITIES TO BANKS NON-CURRENT . . . . . . . . . . . . . . . . . . . 3.284,7 3.080,0 1.687,4
BONDS > 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
LIABILITIES F&C NON-CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 4.728,0
OTHER FINANCIAL LIABILITIES NC . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
FINANCIAL LIABILITIES NON-CURRENT . . . . . . . . . . . . . . . . . . . . . . 3.284,7 3.080,0 6.415,4
PROVISIONS FOR EMPLOYEE BENEFIT COSTS . . . . . . . . . . . . . 6.613,8 6.732,8 7.409,4
OTHER LONG-TERM PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 420,9 424,3 207,4
DEFERRED TAX LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.621,6 1.609,7 1.793,1
PROVISIONS NON-CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.656,3 8.766,7 9.409,9
NON-CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.941,0 11.846,8 15.825,3
LIABILITIES TRADE- THIRD PARTIES . . . . . . . . . . . . . . . . . 22.685,0 15.658,6 23.975,3
LIABILITIES FROM AFFILIATED COMPANIES — T . . . . . . 8.953,1 7.620,8 9.646,4
LIAB. F. COMP. IN WHICH SHARES ARE HELD — T . . . . . 12,3 23,1 6,7
TRADE LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.650,4 23.302,5 33.628,4
LIABILITIES DERIVATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
LIABILITIES FROM INVESTMENTS . . . . . . . . . . . . . . . . . . . . 149,1 149,1 115,6
LIABILITIES FROM PROFIT POOLS & DIVIDENDS . . . . . . 435,5 0,0 0,0
LIABILITIES OTHER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.604,8 8.252,6 5.414,5
OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.189,4 8.401,7 5.530,1
TRADE AND OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.839,8 31.704,2 39.158,5
LIABILITIES TO BANKS CURRENT . . . . . . . . . . . . . . . . . . . . . . . . 16.069,8 17.703,0 8.134,6
BONDS < 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
LIABILITIES F&C CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.062,5 25.883,1 47.282,0
OTHER FINANCIAL LIAB. CURRENT . . . . . . . . . . . . . . . . . . . . . . 165,2 166,3 47,3
FINANCIAL LIABILITIES CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.297,4 43.752,4 55.463,8
PROVISIONS CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.532,3 1.399,6 1.171,9
TAX LIABILITIES CURRENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.652,4 1.664,7 2.160,0
PUBLIC SUBSIDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0
CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.321,9 78.520,9 97.954,2
TOTAL EQUITY AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.301,6 126.810,9 154.417,9
F-115
Audited Financial Statements
for the year ended 31 December 2005 of
HSW-Huta Stali Jakościowych Sp. z o.o.
F-116
HSW — HUTA STALI JAKOŚCIOWYCH SP. Z O.O.
INDEPENDENT AUDITOR’S OPINION
For the Supervisory Board of HSW — Huta Stali Jakościowych Spółka z o.o. in Stalowa Wola.
We have audited the attached financial statements of HSW — Huta Stali Jakościowych Spółka z o.o. with
its registered seat in Stalowa Wola at ul. Kwiatkowskiego 1, 37-450 Stalowa Wola, including:
1) introduction to the financial statements,
2) balance sheet prepared as at 31 December 2005, reporting total assets and liabilities of PLN
201,317,107.15
3) profit and loss account for the period from 1 January 2005 to 31 December 2005, reporting net
profit of PLN 27,712,517.35
4) statement of changes in equity in the period from 1 January 2005 to 31 December 2005, reporting
an increase in equity by PLN 140,098,344.58
5) statement of cash flows in the period from 1 January 2005 to 31 December 2005, reporting an
increase of cash by PLN 1,267,471.13
6) additional information and explanations.
It is the responsibility of the Management Board of the Company to prepare these financial statements.
Our task was to audit the financial statements and express an opinion concerning their consistency, adequacy and
clarity as well as the adequacy of the books of accounts on the basis of which these financial statements were
prepared.
Our audit of the financial statements was performed in accordance with the following provisions:
1) Chapter 7 of the Act of 29 September 1994 on Accounting (uniform text Dziennik Ustaw of 2002
No. 76, item 694, with subsequent amendments),
2) auditing standards adopted by the National Board of Certified Auditors in Poland,
3) International Financial Audit Standards in matters not regulated in the provisions specified above.
The audit of the financial statements was planned and performed so as to obtain a viable and sufficient
basis on which to express a reliable opinion. In particular, the audit comprised verifying the adequacy of the
accounting policies applied by the Company and material estimates, checking — largely on a test basis — the
accounting records and evidence relating to the amounts and information reported in the financial statements, and
the overall evaluation of the financial statements.
We believe that the audit has given us sufficient basis to express a reliable opinion.
It is our view that the audited financial statements, including numerical data and narrative:
a) present in a reliable and transparent manner all information significant for the assessment of the
asset structure and financial standing of the Company as at 31 December 2005 as well as its
financial performance in the financial year from 1 January 2005 to 31 December 2005,
b) was prepared, in all material aspects, in accordance with the accounting policies laid down under
the above Act, based on accurately maintained books of accounts,
c) comply with the legal regulations and the provisions of the Company’s Articles of Incorporation
affecting the substance of the financial statements.
F-117
The information disclosed in the report on the Company’s operations is complete within the meaning of
Article. 49, paragraph 2 of the Act on Accounting, and the information contained therein, derived from the
financial statements, is consistent with them.
Expert Auditor DORADCA
Zespół Doradców Finansowo-Ksie˛gowych Sp. z o.o.
GRUPA FINANS-SERVIS
20-011 Lublin Al.J.Piłsudskiego 1a
Reg. No. 232
President of the Management Board

Alina Dziuba Stefan Czerwiński, M.Sc.
Reg. No. 5577/793 Reg. No. 9449/7400
Vice-President of the Management Board

Grażyna Kutnik. M.Sc.
Reg. No. 5691/802
Lublin, 27 February 2006 Corporate seal of the authorised entity
F-118
REPORT
supplementing the Opinion on the Audit of the Financial Statements of a limited liability company
HSW — Huta Stali Jakościowych Spółka z o.o. in Stalowa Wola for 2005
Contents
A. Introductory Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-120

I. Audited Company Identification Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-120
II. Information on Entity Authorised to Audit Financial Statements for 2005 . . . . . . . . . . . . . . . . . F-121
III. Information on Financial Statements for the Period Preceding the Audited Year . . . . . . . . . . . . F-121
IV. Information Identifying Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-122
V. Statement of the independent expert auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-122
B. Review of Assets and Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-124
C. Evaluation of the Reliability of the Accounting System Used and Associated Internal
Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
I. Reliability of Accounting System Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
II. Balance Sheet Assets and Liabilities Stocktaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
D. Information on Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
I. Reliability and Integrity of Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
1. Balance sheet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-138
2. Balance sheet liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-139
II. Discussion on Selected Balance Sheet Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-139
1. Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-139
2. Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-139
3. Short-term receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-140
4. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-140
5. Provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-140
6. Short-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-140
7. Deferred Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-140
III. Reliability and Integrity of Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-141
IV. Reliability and Integrity of Supplementary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-141
V. Integrity of Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-141
VI. Integrity of Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-142
VII. Reliability and Integrity of Report on Company Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-142
E. Summary of Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-142
F-119
REPORT
HSW — Huta Stali Jakościowych Spółka z o.o. in Stalowa Wola for 2005 (Continued)
A. Introductory Information
I. Audited Company Identification Data
1. Name and seat of the Company
HSW — Huta Stali Jakościowych Spółka z o.o. in Stalowa Wola, ul. Kwiatkowskiego 1, 37-450
Stalowa Wola.
The Company operates under the Articles of Incorporation drawn up in the form of a Notarial Deed on
27 January 2004, Rep. A No. 280/2004.
The Company was established for the time indeterminate.
2. Registration in the National Court Register

Entry Number: 0000195945
Entry date: 19 February 2004
Name and seat of the Court: Local Court in Rzeszów, Twelfth Economic Division of the National Court
Register.
3. Company’s identification numbers

NIP: 865-23-72-944 (VAT Registration number)
REGON: 831368290 (statistical number)
4. Objects of the Company’s Activity

During the audited period the Company conducted its business activity in line with objects laid down
under the Company’s Articles of Incorporation and the entry in the National Court Register. The object of
activity included in the main:
Š production of cast iron and steel as well as steel alloys,
Š other preliminary work on cast iron and steel, production of heavy bars, rods, and cold drawn profiles,
Š metalworking and metal coating, production of mechanical tools,
Š technical studies and analyses, machining of metal elements.
5. Equity
5.1. The Company’s share capital disclosed in the balance sheet as at 31 December 2005 amounted to
PLN 157,987,835.64 and included:
— initial capital PLN 116,895,700.00
— reserve capital PLN 4,459,872.76
— other reserve capital PLN 8,919,745.53
— net profit PLN 27,712,517.35
5.2. Pursuant to the Company’s Articles of Incorporation and the entry in the National Court Register, the
Company’s share capital amounts to PLN 116,895,700.00 and it is divided into 100 shares at PLN 1,168,957.00
each.
During the accounting year 2005 the nominal value per share increased from PLN 500.00 to
1,168,957.00. This increase was covered by non-cash contribution in the form of assets (real estate, intangible
assets, know-how, and machines and equipment) made by HSW-Zakład Metalurgiczny Spółka z o.o.
(metallurgical establishment) valued at 116,845,700.00
5.3. The sole owner of the equity as at 31 December 2005 was HSW — Zakład Metalurgiczny
Spółka z o.o. in Stalowa Wola which sold all its shares to ZŁOMREX SA, a company seated in Poraj, on
27 January 2006.
F-120
REPORT
A. Introductory Information (Continued)

6. Information on Entities Associated with the Audited Entity
6.1. The audited Company is not a dominant entity for other entities (i.e. a major investor).
6.2. The audited Company was a dependent company as at 31 December 2005 with respect to HSW —
Zakład Metalurgiczny Spółka z o.o. The Company is a member of a Group of Companies with Huta Stalowa
Wola SA (steelworks) in Stalowa Wola as its dominant entity
7. Head of the Entity

The Company’s Board of Management performs the function is the Head of the Entity. As at 27 February
2006 the composition of the Management Board was as follows:
— Mr Wincenty Likus — President of the Management Board,
— Mr Wojciech Maj — Member of the Management Board,
— Mr Andrzej Je˛druch — Member of the Management Board.
II. Information on Entity Authorised to Audit Financial Statements for 2005

1. Name and seat of the entity authorised to audit financial statements
DORADCA Zespół Doradców Finansowo-Ksie˛gowych Spółka z o.o.
GRUPA FINANS-SERVIS
Al. J. Piłsudskiego 1a
20-011 Lublin
DORADCA Spółka z o.o. is registered on the list of entities authorised to audit financial statements kept
by the National Board of Certified Auditors, entry No. 232.
2. Selection of the entity to audit financial statements

Resolution No. 13/II/2005 of the Supervisory Board
Date of adoption: 28 November 2005
3. Auditing team conducting the audit of financial statements

Pursuant to the Agreement No. 176/LU/2005 of 30 November 2005 concluded with the Company’s
Management Board, the audit of the financial statements was performed in the seat of the Company during the
period from 6 January 2006 to 27 February 2006 on an on-and-off basis.
The audit of financial statements was conducted on behalf of the auditing entity by Alina Dziuba, Expert
Auditor, Reg. No. 5577/793.
4. Declaration of impartiality and independence of the auditing entity

The entity auditing the financial statements and the auditor performing the audit meet the requirements of
impartiality and independence set forth under the Act on Accounting.
III. Information on Financial Statements for the Period Preceding the Audited Year
1. Information on the entity auditing financial statements
The financial statements for the previous accounting period from 19 February 2004 to 31 December 2004
were audited by DORADCA Zespół Doradców Finansowo-Ksie˛gowych Spółka z o.o. GRUPA FINANS-
SERVIS in Lublin.
2. Type of opinion issued

No qualifications were raised in the opinion issued.
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REPORT

3. Approval of financial statements
Body of approving authority: Ordinary General Meeting of Shareholders of HSW — Huta Stali
Jakościowych Spółka z o.o. in Stalowa Wola
Resolution No. 7/2005
Date of adoption: 22 June 2005
4. Manner of distributing profit for the previous accounting year

Body of approving authority: Ordinary General Meeting of Shareholders of HSW — Huta Stali
Jakościowych Spółka z o.o.
Resolution No. 8/2005
The net profit totalling PLN 17,839,491.06 for the previous accounting year was allocated for the
following:
a) reserve capital PLN 8,919,745.53
b) supplementary capital PLN 4,459,872.76
c) dividend for the Shareholder PLN 4,459,872.77
The said distribution was properly entered in the books of accounts for the audited period.
5. Information on the filing and announcing of the approved financial statements for the previous accounting
period
The approved financial statements for the period preceding the audited period were:
a) filed along with the other documents with the Local Court in Rzeszów, Twelfth Commercial Division
of the National Court Register on 7 July 2005 pursuant to the provisions of Article 69 of the Act on Accounting,
b) pursuant to the provisions of Article 70 of the Act on Accounting, they were published in Monitor
Polski B No. 1789, item 12533 on 22 November 2005,
c) filed in the Fiscal Office on 28 June 2005 under the provisions of Article 27 of the Act of 15 February
1992 on Corporate Income Tax.
IV. Information Identifying Audited Financial Statements

1. The audited financial statements for the period from 1 January 2005 to 31 December 2005 include:
a) introduction to the financial statements,
b) balance sheet prepared as at 31 December 2005, reporting total assets and liabilities and equity of
PLN 201,317,107.15
c) profit and loss account (calculation variant) for the period from 1 January 2005 to 31 December
2005, reporting net profit of PLN 27,712,517.35
d) statement of changes in equity,
e) statement of cash flows, reporting an increase in net cash during the audited period by
PLN 1,267,471.14
f) additional information and explanations.
2. Pursuant to the provisions of Article 49 of the Act of 29 September 1994 on Accounting, the Head of
the Company drew up a report on its operations during the period from 1 January 2005 to 31 December 2005.
V. Statement of the independent expert auditor

1. It is the responsibility of the Company’s Management Board to prepare these financial statements in a
proper, reliable and reasonable manner, which has been duly confirmed.
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REPORT

In the declaration submitted, the Management Board of the Company confirmed that, to the best of their
knowledge and belief, the information disclosed to us was true and reliable, and it covered all events that might
have an effect on the financial statements.
The Board made accounting books and other required documents available to us and provided us with
explanations necessary to issue our opinion.
The Management Board of the Company submitted a declaration of 27 February 2006 confirming
Š the completeness of the accounting records in the accounting books,
Š the disclosure in the financial statements of any contingency liabilities,
Š the disclosure in the financial statements of any material economic events that occurred before the
date of the declaration.
2. It was not the purpose of the audit to detect and explain events liable to prosecution or irregularities
which could potentially arise outside of the accounting system.
3. It was not the purpose of the audit to determine the correctness of prices applied in dealings between
affiliated entities.
B. Review of Assets and Financial Position

The audit covered financial statements comprising the balance sheet, profit and loss account, cash flow
statement, and economic ratios for the analysed and for the period from 19 February 2004 as for the previous
years.
For the purpose of the audit the statements have been modified as follows:
1) the balance sheet
Š the contents has been limited to the absolute minimum of information specified in the groups
(fixed assets, working capital, equity and liabilities) and sub-groups,
Š the amount of equity has been determined after the exclusion of the part of net profit allocated
for payment as dividend,
Š liabilities and provisions for liabilities are divided into long and short-term liabilities:
Š long-term liabilities include provision in respect of deferred income tax, long-term
provisions for employee benefits and similar,
Š short-term liabilities include short-term provisions for employee benefits and similar, other
short-term provisions, and short-term liabilities,
2) the profit and loss account:
Š inclusion of additional information concerning the results broken down into separate types of
business activity,
Š extension of information to include net profit adjusted for the disbursement of the dividend
(disclosed in the net profit/loss item in the balance sheet liabilities,
Š elimination of heavily analytical items.
The analysis was performed in current prices, since inflation rates remain fairly stable.
Analysis of Balance Sheet and Financial Liquidity and Solvency Ratios

The comparative variant of balance sheet data and basic economic and financial ratios are presented in
Tables 1 and 2.
HSW — Huta Stali Jakościowych Spółka z o.o. with its registered seat in Stalowa Wola was established
by way of separation from another entity and registration in the National Court Register on 19 February 2004. A
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REPORT
B. Review of Assets and Financial Position (continued)

steady development of the Company’s activity is duly reflected in the rising trend of its economic potential
throughout the audited period and clearly confirmed in the balance sheet total. As at 31 December 2005 the
balance sheet total amounted to PLN 201,317.1 thousand, i.e. up by 154.46% compared to the level at the end of
2004.
This growing tendency in the Company’s economic potential was the result of the contribution of its sole
shareholder in 2005, i.e. HSW — Zakład Metalurgiczny Spółka z o.o. in the form of assets including real
property, intangible assets, know-how, machines and equipment for the total of PLN 116,895.7 thousand. This
event translated directly into an increase of the most significant items of fixed assets. In current assets changes
reported referred to stock — up by 8.36%, short-term receivables — down by 7.29%, and cash — an increase by
90.92% relative to the level as at 31 December 2004. Consequently, the structure of the Company’s equity
underwent certain changes. The immobility of assets ratio went up by 58.81 percentage points as compared to the
level as at the end of 2004 totalling 62.08%. This ratio can be safely considered as typical of production
enterprises.
The year 2005 saw a clear domination of equity in the structure of the Company’s liabilities. As at the
balance sheet date it accounted for 78.48% of the total financing sources. Their increased value by PLN
144,558 thousand results from increased initial capital and a rise in the level of profit generated for 2005.
Following the distribution of net profit for 2004, the Company established a reserve capital totalling PLN
4,459.8 thousand and supplementary capital of PLN 8,919.7 thousand earmarked for the modernisation of the
Company’s assets. The profits generated during the last two years allow the Company to execute the approved
modernisation tasks.
In the structure of liabilities and provisions, short-term items were dominant. The share of external
financing was down during the audited period to 21.52% of the total liabilities. In nominal values liabilities and
provisions were down by PLN 22.358 thousand, mainly as a result of the repayment of accounts payable. During
the audited period, long-term foreign capitals included provisions only. In 2005, following the establishment of
provisions for employee benefits and similar, their value increased by 11.35% relative to the level at the end of
2004.
The fixed capital growth rate (equity and long-term external capital) was higher compared to the growth
of liabilities, which translated into an increase of the durability of the financing structure by 56.91 percentage
point to the level of 82.05% as at the balance sheet date.
The aforementioned trends resulted in changes in the assets and financial position of the Company. The
fixed assets to equity ratio in 2005 amounted to 126.41%, and the balance sheet “golden” principle was up to
132.17%. Financial liquidity ratios, general and quick liquidity ratio I increased to the levels considered as
optimal. Quick liquidity II ratio totalled 0.074, which indicates that the Company can settle 7.4% of its current
liabilities without any delay. Stock turn, receivables and liabilities ratios were also up relative to those obtained
in 2004. In terms of financial liquidity management, this is not a favourable phenomenon. The stock turn ratio as
at the end of 2005 was 30 days, i.e. 16 days longer as compared to that at the end of 2004. The collection period
in 2005 was 49 days, i.e. 24 days longer than that in 2004, and the payment period in 2005 was 44 days. It
follows that the Company offers a trade credit to buyers for a period longer than it receives from its suppliers. In
the two periods compared, the balance of the working capital was positive. In 2005, this balance was higher by
132.37% than the comparable level as at the end of 2004.
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REPORT
Table 1. Balance sheets for years 2003, 2004, and 2005
Change (previous
31 Dec. 2003 31 Dec. 2004 31 Dec. 2005 year =100%)
Description Amount As % of total Amount As % of total Amount As % of total 2005/2004
1 2 3 4 5 6 7 8 9
ASSETS
A. Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 592 332,18 3,28% 124 982 118,11 62,08% 4821,22%
I. Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 166,73 0,00% 1 221 169,13 0,61% 38562,46%
II. Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784 636,45 0,99% 121 632 257,98 60,42% 15501,73%
III. Long-term receivables
IV. Long-term investments
V. Long-term prepayments and accrued income . . . . . . . . . . . . . . . . . . . . . . . . . 1 804 529,00 2,28% 2 128 691,00 1,06% 117,96%
B. Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 524 458,72 96,72% 76 334 989,04 37,92% 99,75%
I. Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 754 223,17 31,29% 26 822 802,60 13,32% 108,36%
II. Short-term receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 373 020,35 63,67% 46 703 079,67 23,20% 92,71%
F-125
incl.: accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 334 832,84 62,36% 46 200 899,96 22,95% 93,65%
III. Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 393 988,69 1,76% 2 661 459,82 1,32% 190,92%
incl.: cash and other cash assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 393 988,69 1,76% 2 661 459,82 1,32% 190,92%
IV. Short-term prepayments and accrued income . . . . . . . . . . . . . . . . . . . . . . . . . 3 226,51 0,00% 147 646,95 0,07% 4576,06%
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 116 790,90 100,00% 201 317 107,15 100,00% 254,46%
LIABILITIES
A. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 429 618,29 16,97% 157 987 835,64 78,48% 1176,41%
I. Share (initial) capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 000,00 0,06% 116 895 700,00 58,07% 233791,40%
II. Outstanding contribution to share capital
III. Own shares
IV. Supplementary capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 459 872,76 2,22%
V. Revaluation capital
VI. Other reserve capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 919 745,53 4,43%
VII. Profit (loss) carry forward
VIII. Net profit (loss) incl. dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 379 618,29 16,91% 27 712 517,35 13,77% 207,12%
B. Liabilities and provisions against liabilities . . . . . . . . . . . . . . . . . . . . . . . . 65 687 172,61 83,03% 43 329 271,51 21,52% 65,96%
I. Provisions and long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 463 720,38 8,17% 7 197 494,81 3,58% 111,35%
incl.: credit facilities and loans
II. Provisions and short-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 223 452,23 74,86% 36 131 776,70 17,95% 61,01%
incl.: credit facilities and loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 495 385,17 0,74%
accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 848 074,17 60,48% 27 540 868,91 13,68% 57,56%
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 116 790,90 100,00% 201 317 107,15 100,00% 254,46%
REPORT
Table 2. Key balance sheet amounts and economic ratios
Formula Ratio (amount) for: Ratio (amount) change
No. Ratio (formula adopted) Year 2003 19.02-31.12.2004 Year 2005 04-03 05-03 05-04
Change (previous year.=100%)
Key balance sheet amounts
1 Net assets (entity’s book value) . . . . . . . . . . . . . . . . . Equity ⳮ dividend 13 429 618,29 157 987 835,64 1176,41%
2 Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity + provisions and long-term
liabilities 19 893 338,67 165 185 330,45 830,35%
3 Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed capital ⳮ fixed assets 17 301 006,49 40 203 212,34 232,37%
Static financial liquidity ratios
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Current assets
4 Current ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities 1,29 2,11 1,29 2,11 0,82
Liquid current assets
5 Quick current ratio I . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments
6 Quick current ratio II . . . . . . . . . . . . . . . . . . . . . . . . .
Collection and stock turn ratios
Total stock (average) x 360
7 Stock-turn — in days . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of operating activity 14 30 14 30 16
Accounts receivable (average) x 360
8 Collection period — in days . . . . . . . . . . . . . . . . . . . .
Income from sales 25 49 25 49 24
Accounts payable (average) x 360
9 Payment period — in days . . . . . . . . . . . . . . . . . . . . .
Cost of operating activity ⳮ depreciation 27 44 27 44 17
REPORT
Formula Ratio (amount) for: Ratio (amount) change
Solvency and equity-capital ratios
Total liabilities
10 Debt to equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets 83,03% 21,52% 83,03 21,52 -61,50
Equity
11 Equity to total assets ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets 16,97% 78,48% 16,97 78,48 61,50
12 Equity to fixed assets ratio Equity
(assets utilisation ratio) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed assets 518,05% 126,41% 518,05 126,41 -391,64
13 Self-financing of current assets Current
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(utilisation of foreign capital ratio) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . liabilities

Current assets 77,39% 47,33% 77,39 47,33 -30,06
Fixed capital
14 “Golden” principle ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets 767,39% 132,17% 767,39 132,17 -635,22
Fixed capital
15 Durability of financial structure ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities 25,14% 82,05% 25,14 82,05 56,91
Fixed assets
16 Immobility of funds ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets 3,28% 62,08% 3,28 62,08 58,81
Note! Additional information
1 Equity = Share CapitalⳮDividend; Total Liabilities = Liabilities and Provisions against Liabilities
2 Accounts receivable and payable over 12 months carried forward to respective long-term receivables and accounts payable; Liquid Current Assets = Current
AssetsⳮStockⳮShort-term Prepayments and Accrued Income
3 Long-term liabilities = Long-term: provisions, liabilities, Prepayments and Accrued Income, Accounts Payable with maturity over 12 months
4 Current Liabilities = Short-term: Provisions, Liabilities, Accruals and Deferred Income after eliminating Accounts Payable with Maturity over 12 months + Dividend
5 Earnings on Sales = Net Sales of Products + Net Sales of Merchandise and Materials; t — Income Tax Rate
REPORT
Structure of Assets
31 Dec. 2004 31 Dec. 2005
Fixed Assets Current assets
3%
38%
97%
62%
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Structure of Current Assets

Stock
Short-term receivables
Short-term prepayments and accrued income
3% 0%
2%
32% 35%
66% 62%
REPORT
Structure of Liabilities and Equity
31 Dec. 2005
31 Dec. 2004
Equity
Liabilities and provisions for liabilities
22%
23%
78%
77%
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Structure of External Funding

Provisions for liabilities
Long-term liabilities
Short-term liabilities
Accruals and deferred income
14%
22%
86% 78%
REPORT

Structure and changes of items determining financial result, profitability and efficient utilisation of
resources
Table 3 presents a comparison of profit and loss accounts. The cost structure and changes broken down
by type is presented in Table 4. Profitability and efficient use of resources ratios are presented in Table 5.
During the audited period income from sale was the main source of the Company’s earnings accounting
for 99.05% of the total earnings in 2005. This marks an increase by 13.62% relative to the previous year.
Financial gains in respect of interest at 0.69% of the total earnings is the second largest source. The remaining
operating income accounts for 0.25% of the total earnings. The structures of costs and earnings are similar. The
costs of products sold and the value of goods and services sold accounted for 93.24% of the costs incurred in
2005. As in the case of earnings, the costs were up by 12.19% relative to the level at the end of 2004. Operating
expenses account for 1.62% of the total costs followed by financial expenses at 0.77% of the total.
The specific character of the Company’s activity in 2005 is reflected in the breakdown of costs by type. In
2005 the consumption of materials and energy accounted for 77.64% of the total costs incurred. The other major
cost items refer to outsourced services at 10.45% and payroll at 8.02%. The total cost breakdown in 2005 as
compared to 10 months inn 2004 totalled 10.58%. In November 2005 the Company received its basic assets in
the form of contribution; thus depreciation costs account for a mere 0.36% of the total costs incurred.
A parallel increase in earnings from sale by PLN 42,095.5 thousand and the matching costs — an increase
by PLN 32,423.4 thousand, led to an increase in gross profit from sale for 2005 up to PLN 52.779.7 thousand.
During the audited period profit was higher by 22.44% than that disclosed as at 31 December 2004. Taking into
consideration the cost of sales and general management, the profit from sale grew by 21.34% relative to the
previous year. The losses on the remaining operating and financial activity led to a situation where gross profit
for 2005 amounted to PLN 34,513.9 thousand, i.e. higher than that reported in the previous year by 55.61%. Net
profit increase by 107.12% (after taking the dividend into account). Improved results and changes in the structure
of assets of the Company were also reflected in changes in profitability indicators. The profitability ratio
measured as profit from sale amounted to 11.05%, and return on equity totalled 17.54%. These ratios indicate
that the Company’s activity was profitable. A comparison of these ratios in the previous year is not possible,
since in 2004 the Company operated without any assets, with little participation of its equity. The rise of fixed
assets as at the balance sheet date translated into return on assets on the level of 5.51, and the return on total
assets at 2.50. A rise in earnings from sale translated, in turn, into an increased average efficiency of the
Company’s employees. In 2005, PLN 421.6 thousand fell per employee, i.e. up by 12.94% relative to the
previous accounting period.
F-130
REPORT
Table 3. Profit and Loss Accounts — By Function
Year 2003 19.02-31.12.2004 Year 2005 Change (previous year =100%)
1 2 3 4 5 6 7 8 9
Total income and profit . . . . . . . . . . . . . . . . . . . . . . . . . . 310 237 205,14 100,00% 354 578 445,42 100,00% 114,29%
Total costs and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 057 526,08 100,00% 320 064 547,07 100,00% 111,11%
A. Net income from sale of products, goods, and
materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 115 657,59 99,64% 351 211 167,20 99,05% 113,62%
I. Net income from sale of products . . . . . . . . . . . . . . 302 440 031,23 97,49% 350 694 045,56 98,90% 115,95%
II. Net income from sale of goods and materials . . . . 6 675 626,36 2,15% 517 121,64 0,15% 7,75%
B. Cost of products, goods, and materials sold . . . . . . . . . . . . 266 007 986,72 92,35% 298 431 466,44 93,24% 112,19%
I. Cost of manufacturing products sold . . . . . . . . . . . 259 304 172,47 90,02% 298 036 762,93 93,12% 114,94%
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II. Value of goods and materials sold . . . . . . . . . . . . . 6 703 814,25 2,33% 394 703,51 0,12% 5,89%
C. Profit (loss) on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 43 107 670,87 x 52 779 700,76 x 122,44%
D. Selling costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 037 042,74 0,71% 2 269 850,85 0,71% 111,43%
E. General management costs . . . . . . . . . . . . . . . . . . . . . . . . . 9 085 335,74 3,15% 11 699 242,94 3,66% 128,77%
F. Profit (loss) on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 31 985 292,39 x 38 810 606,97 x 121,34%
G. Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 735,86 0,07% 903 386,68 0,25% 447,81%
H. Other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 173 071,07 3,18% 5 199 012,95 1,62% 56,68%
Result on other operating activity . . . . . . . . . . . . . . . . . . . x -8 971 335,21 x -4 295 626,27 x 47,88%
I. Profit (loss) on operating activity . . . . . . . . . . . . . . . . . . x 23 013 957,18 x 34 514 980,70 x 149,97%
J. Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919 811,69 0,30% 2 463 891,54 0,69% 267,87%
K. Financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 754 089,81 0,61% 2 464 973,89 0,77% 140,53%
Result on financial activity . . . . . . . . . . . . . . . . . . . . . . . . x -834 278,12 x -1 082,35 x 0,13%
L. Profit (loss) on economic activity . . . . . . . . . . . . . . . . . . x 22 179 679,06 x 34 513 898,35 x 155,61%
M. Result on extraordinary events . . . . . . . . . . . . . . . . . . . . . . x x x
N. Gross profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 22 179 679,06 x 34 513 898,35 x 155,61%
O. Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 4 340 188,00 x 6 801 381,00 x 156,71%
P. Other mandatory reductions of profit . . . . . . . . . . . . . . . . . x x x
R. Net profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 17 839 491,06 x 27 712 517,35 x 155,34%
incl.: dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 4 459 872,77 x x
Net profit (loss) incl.dividend . . . . . . . . . . . . . . . . . . . . . x 13 379 618,29 x 27 712 517,35 x 207,12%
REPORT
Table 4. Structure and changes in costs by type
Year 2003 19.02-31.12.2004 Year 2005 Change (previous year =100%)
1 2 3 4 5 6 7 8 9
1 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 361,96 0,07% 1 164 148,62 0,36% 535,58%
2 Materials and energy consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 939 796,52 81,43% 252 981 512,43 77,64% 105,44%
3 Outsourced services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 689 418,50 9,06% 34 062 821,24 10,45% 127,63%
4 Taxes and charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 534,14 0,17% 1 308 279,65 0,40% 254,76%
5 Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 711 752,93 6,35% 26 115 426,87 8,02% 139,57%
6 Social insurance and other benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 599 758,58 1,90% 6 895 790,69 2,12% 123,14%
7 Other costs by nature of expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 981 328,48 1,01% 3 290 290,49 1,01% 110,36%
Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 652 951,11 100,00% 325 818 269,99 100,00% 110,58%
Table 5. Profitability and utilisation of resources ratios

F-132
Formula For Ratio change

Profitability ratios
Net profit
1 Return on sales by net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,77% 7,89% 2,12
Revenue from sales
Profit from sales
2 Return on sales by profit from sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,35% 11,05% 0,70
Revenue from sales
Net profit
3 Return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,55% 13,77% -8,78
Total assets
Net profit + interest x (1ⳮt)

4 Return on equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,16% 14,11% -9,05
Total liabilities
Net profit
5 Return on capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,84% 17,54% -115,30
Equity
Return on share capital ⳮ
6 Gearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,67 3,43 -106,24
Return on equity
Utilisation of resources (activity) ratios
Revenue from sales
7 Total assets stock turn (productivity) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,81 2,50 7,81 2,50 -5,31
Total assets ⳮ average
Revenue from sales
8 Fixed assets stock turn (productivity) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238,48 5,51 238,48 5,51 -232,98
Fixed assets ⳮ average
Revenue from sales
9 Employee productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 328,09 421 622,05 112,94%
Average employment level
REPORT
Change in Total Revenues and Costs Total income and profit
Breakdown of Costs
Total costs and losses
Depreciation
400 000 000,00

Materials and energy consumption
350 000 000,00
Outsourced services
300 000 000,00
Taxes and charges
250 000 000,00
Remuneration
200 000 000,00
Social insurance and other benefits
150 000 000,00
Other costs by nature of expenses
100 000 000,00
50 000 000,00
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0,00
Year 2003 19.02-31.12.2004 Year 2005
Year 2004
2% 1%
6%
9%
82%
Result on sales
Change in Financial results Result on operating activity
Result on economic activity
Gross result
40 000 000,00 Net result
Year 2005
35 000 000,00
8% 2% 1%
0%
30 000 000,00
10%
25 000 000,00
[PLN]
20 000 000,00
15 000 000,00
10 000 000,00 79%
5 000 000,00
0,00
Year 2003 19.02-31.12.2004 Year 2005
REPORT
Profitability Ratios
140.00%
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Year 2003 19.02-31.12.2004 Year 2005
F-134
Return on equity Return on total assets Return on capital employed
Liquidity Ratios
2.50
2.00
1.50
1.00
0.50
0.00
Year 2003 19.02-31.12.2004 Year 2005
Current ratio Quick current ratio I

REPORT

Cash flow analysis and financial liquidity ratios
Table 6 presents the synthesis of cash flows whereas Table 7 shows selected financial liquidity ratios.
The cash flow structure did not undergo significant changes relative to the previous year. Operating
activity continued to remain the main source of cash in the Company. This was evidenced in the value of
capacity for generating net cash on operating activity which reached the level of 97.45% compared to 87.32% for
the previous year. The total value of cash flows from operating activity increased during the audited period over
five-fold. The share of profit in generating operating cash flow is a positive feature of business. The outlays on
fixed assets and the disbursement of the dividend from the profit generated in 2004 led to negative cash flow
from investment and financial operations. The cash self-sufficiency for the audited period totalled 97.83%, i.e.
down by 240.65 percentage point relative to that reported in the previous year. Cash flows generated from
operating activity were sufficient in 2005 to cover investment and financial outlays. The cash efficiency on sales
which totalled 0.62% as at the end of 2004 was up to 2.92% as at the balance sheet date for the audited period.
F-135
REPORT
Table 6. Cash Flow Statements
Year 2003 19.02-31.12.2004 Year 2005 Change (previous year=100%)
1 2 3 4 5 6 7 8 9
A. Cash flow from operating activity
I. Net profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 839 491,06 935,21% 27 712 517,35 269,14% 155,34%
II. Adjustments, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15 931 958,20 -835,21% -17 416 000,96 -169,14% 109,31%
1. Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 361,96 11,39% 1 164 148,62 11,31% 535,58%
2. Profit (loss) due to exchange rate differences
3. Interest and participation in profits (dividends)
4. Profit (loss) on investment activity
5. Change in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 303 839,42 382,89% 811 680,57 7,88% 11,11%
6. Change in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24 754 223,17 -1297,71% -2 068 579,43 -20,09% 8,36%
7. Change in liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -50 373 020,35 -2640,74% 3 669 940,68 35,64% -7,29%
8. Change in short-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 983 410,09 2725,16% -20 604 695,94 -200,11% -39,64%
F-136
9. Change in accruals and deferred income . . . . . . . . . . . . . . . . . . . . . . . . . -309 326,15 -16,22% -388 495,46 -3,77% 125,59%
10. Other adjustments
III. Net cash flow on operating activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 907 532,86 100,00% 10 296 516,39 100,00% 539,78%
B. Cash flow on investment activity
I. Income
1. Sale of intangible assets and tangible fixed assets
2. Other income
II. Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -563 544,17 100,00% -6 064 557,66 100,00% 1076,15%
1. Purchase of intangible assets and tangible fixed assets . . . . . . . . . . . . . . -563 544,17 100,00% -6 064 557,66 100,00% 1076,15%
2. Other expenses
III. Net cash flow on investment activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x -563 544,17 x -6 064 557,66 x 1076,15%
C. Cash flow on financial activity
I. Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 000,00 100,00% 1 495 385,17 100,00% 2990,77%
1. Credit facilities and loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 495 385,17 100,00%
2. Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 000,00 100,00%
II. Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4 459 872,77 100,00%
1. Dividends and other payments towards owners . . . . . . . . . . . . . . . . . . . . -4 459 872,77 100,00%
2. Repayment of credits and loans
3. Interest
4. Other expenses
III. Net cash flow on financial activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 50 000,00 x -2 964 487,60 x -5928,98%
D. Total net cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 1 393 988,69 x 1 267 471,13 x 90,92%
(Balance change of cash resources)
REPORT
Table 7. Financial liquidity change ratios
Formula For Change

No. Ratio (adopted formula) Year 2003 19.02-31.12.2004 Year 2005 05-04
1. Capacity to generate net cash on cash flow on operating activity
operating activity ratio . . . . . . . . . . . . . cash flow on operating activity + 97,45% 87,32% 97,45 87,32 -10,13
stock and financial gains
2. Net profit to net cash flow on operating net profit 935,21% 269,14% 935,21 269,14 -666,07
activity ratio . . . . . . . . . . . . . . . . . . . . . cash flow on operating activity
3. Cash availability ratio . . . . . . . . . . . . . . . . cash flow on operating activity
F-137
repayment of liabilities with interest + disbursement of 338,49% 97,83% 338,49 97,83 -240,65
dividend + goodwill expenses and tangible fixed assets
4. Cash efficiency on sales ratio . . . . . . . . . . cash flow on operating activity 0,62% 2,92% 0,62 2,92 2,31
revenue from sales + other operating income
REPORT

Summary
In short, the financial standing of the Company is stable. Contrary to 2004, at the end of 2005 the
Company had its own production assets. The Company’s standing with respect to static and dynamic financial
liquidity was good. The general level of debt, largely due to accounts payable, is marginal. The activity
conducted by the Company is profitable, and the profit generated in 2004 was in the main designated for self-
financing of the Company’s operations. The efficiency of the Company’s employees continued to rise steadily
and the cash flows generated from its operating activity allowed for the coverage of the Company’s investment
and financial outlays.
Assessment of the entity’s continued activity in the year following the audited period without significant
changes effected.
The audit of financial statements including the financial standing of the Company revealed no threats to
the Company’s continued activity in the year following the audited period due to intended or enforced suspension
of the existing activity (or material restrictions thereof).
C. Evaluation of the Reliability of the Accounting System Used and Associated Internal Control
I. Reliability of Accounting System Used
The Company keeps accounting books and prepares financial statements on the basis of current
accounting documents describing the adopted accounting system, as referred to in Article 10 of the Act on
Accounting of 29 September 1994, including the Corporate Chart of Accounts approved by the Management of
the Company.
In the audited period the Company did not make any changes to its accounting system.
The audit of financial statements did not reveal any irregularities in the accounting books which, if not
removed, could have a material effect on the audited financial statements, including:
Š the justification of the continuity of the adopted accounting policy,
Š correctness of the opening balance on the basis of the approved balance sheet for the previous year,
Š completeness and clarity of business operations duly confirmed by accounting documents issued in
line with the statutory requirements,
Š reliability, correctness and conformity of data reported in the financial statements with accounting
book records,
Š correctness of the transfer of data from reconciled accounting books to individual components of the
financial statements
Š adequacy of archiving and safeguarding accounting books and accounting records as well as approved
financial statements.
II. Balance Sheet Assets and Liabilities Stocktaking
The audit confirmed that the Company performed the stocktaking of its assets and liabilities in
compliance with the principles and dates specified in Article 26 of the Act on Accounting.
The certified auditors participated in the stocktaking of semi-finished products, work in progress, and
fixed assets as observers. Their observation confirmed that the stocktaking procedure was properly conducted.
The stocktaking results were correctly documented and the stocktaking variances were properly reported
in the accounting books .for the audited period.
D. Information on Audited Financial Statements
I. Reliability and Integrity of Balance Sheet
1. Balance sheet assets
The values of individual items of assets as disclosed in the balance sheet constitute the Company’s assets
of properly assessed value capable of generating economic gains. Their value was presented in the balance sheet
F-138
REPORT
D. Information on Audited Financial Statements (continued)

in prices resulting from the principles of accounting adopted and presented in the introduction to the financial
statements and adjusted by depreciation and revaluation deductions (or write-offs).
2. Balance sheet liabilities

The values of individual items of liabilities presented in the financial statements constitute sources of
financing the Company’s assets.
The value of individual groups of liabilities is presented as a breakdown into equity and external capital.
The evaluation of the above was performed in line with the principles of accounting:
Š equity — at nominal value,
Š provisions — at a value reasonably assessed,
Š liabilities — at amounts payable.
According to the declaration of the Company’s Management Board, there are no disputes or litigation
against the Company save those disclosed in the accounting books and reported in the balance sheet as “other
short-term provisions”.
The balance sheet prepared as at 31 December 2005 contains information which complies with the
requirements laid down in the Act on Accounting. Individual items in the balance sheet result from accounting
records, and they were properly classified and presented.
The audit, conducted to a large extent on a test basis, confirmed the reliability of data presented in the
balance sheet.
II. Discussion on Selected Balance Sheet Items

1. Tangible fixed assets totalled PLN 121,632,257.98
In the balance sheet tangible fixed assets are reported net of accumulated depreciation.
Fixed assets were covered by physical stocktaking and were assessed in terms of their business use.
The documentation on receipts and disposal of fixed assets is correct; relevant entries are reported in
adequate reporting periods.
The Company depreciates its fixed assets by spreading their initial value over the agreed scheduled
depreciation period in compliance with the accounting policy. Depreciation allowances are calculated on a
straight-line basis.
Off-balance sheet records contain outsourced fixed assets used by the Company under lease agreements at
PLN 1,621,843.30.
Fixed assets under construction as at the balance sheet date refer mainly to costs incurred on the
modernisation of the existing assets totalling PLN 317,272.64.
2. Stock
During the accounting year the stock of materials, goods, work in progress and finished products were
subject to physical count.
As at the balance sheet date, the structure of stock is as follows:
— materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 3,193,953.11 11.92%
— work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 18,245,498.54 68.02%
— finished products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 5,201,799.62 19.39%
— goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 65,820.59 0.24%
— prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 115,730.74 0.43%
The evaluation of stock was performed in line with the principles laid down in the accounting policy and
described in the introduction to the financial statements.
F-139
REPORT

The evaluation of stock was performed with due consideration and conservative estimates, which led to
an increase in revaluation deductions of semi-finished products and work in progress by PLN 6,081.34.
3. Short-term receivables
Accounts receivable constitute 22.9% of the Company’s assets as at 31 December 2005.
37,146,231.97 worth of accounts receivable reported in the balance sheet (i.e. 80.4%) was paid by
20 February 2006.
The existence of accounts receivable over 1 year overdue was not confirmed.
Accounts receivable were subject to stocktaking by way of balance sheet reconciliation
Accounts receivable were confirmed as at 30 October 2005. Accounts receivable were evaluated as
falling due with due consideration and conservative estimates, i.e. after taking into account revaluation
deductions created on the basis of risk attributed to each account receivable.
4. Equity
4.1. Share capital of PLN 116,895,700.00 complies with the provisions of the Company’s Articles of
Incorporation and entries in the Register of Entrepreneurs of the National Court Register.
4.2. Reserve capital totalling PLN 4,459,872.76 was established in compliance with Resolution
No. 8/2005 adopted at the Ordinary General Meeting of Shareholders of 22 June 2005 from net profit generated
for 2004.
4.3. Other reserve capital totalling PLN 8,919,745.53 was established in 2005 in compliance with
Resolution No. 8/2005 adopted at the Ordinary General Meeting of Shareholders of 22 June 2005 from net profit
generated for 2004.
4.4. Net profit of the accounting year of PLN 27,712,517.35 is in compliance with that disclosed in the
profit and loss account.
5. Provisions for liabilities

On the basis of calculations performed by an actuary, the Company established as at 31 December 2005 a
provision for possible future employee benefits in respect of jubilee awards and retirement payments in the
amount of PLN 7,905,164.79 and other liabilities, including benefits payable under the Steelworker’s Charter
totalling PLN 1,756,099.54.
6. Short-term liabilities
6.1. As at the balance sheet date, accounts payable totalled PLN 27,540,868.91, of which PLN
25,222,774.60 was paid by 20 February 2006 as scheduled. Overdue accounts payable did not occur.
Generally speaking, during the audited period payments were effected in a timely manner.
As at the balance sheet date the Company assessed interest on overdue trade settlements in the amount of
PLN 83,921.55.
6.2. The short-term liabilities in respect of loans included a balance of a bank loan on the current account,
which falls due in 2006; said loan was granted to the Company by BRE BANK SA, Branch Office in Katowicach
for the total of PLN 1,495,385.17.
The liabilities towards the said bank were confirmed in writing as at the balance sheet date. The bank loan
was assessed in amounts due.
During the accounting year the repayments of the loan was effected from financial earnings in compliance
with the contract concluded.
7. Deferred Income Tax

7.1. Long-term prepayments amount to PLN 2,128,691.00 and constitute assets in respect of deferred
income tax, calculated on negative temporary differences in corporate income tax. The biggest items which in
F-140
REPORT

future will constitute a cost in respect of income tax, and which as at the balance sheet date were not reflected in
the gross result, referred to:
Š provisions for employee benefits,
Š provisions for future liabilities,
Š unrealised negative foreign exchange differences on liabilities,
Š depreciation of slow moving stock resulting from their assessment as at the balance sheet date.
7.2. Provision in respect of deferred income tax of PLN 32,772.00 was determined in line with the
requirements laid down in the Act on Accounting on positive temporary differences in corporate income tax and
comprised as at the balance sheet date:
Š unrealised positive foreign exchange differences on receivables,
Š other.
III. Reliability and Integrity of Profit and Loss Account

The profit and loss account was prepared by function in compliance with the principles of the accounting
system and with due consideration for the provisions of Article 47 of the Act on Accounting.
The Company disclosed revenues, costs, profits and losses as well as taxes and mandatory charges on the
financial result separately in the profit and loss account for the current and previous financial years.
The audited profit and loss account for the period from 1 January 2005 to 31 December 2005, shows
earnings from the sale of products, goods and materials demonstrating the costs of operating activity in a
calculation variant and specifying the cost of product manufacturing, value of goods and materials sold (at
purchase prices), costs of sale (including trading costs), and costs of general management.
The gross financial result in the profit and loss account prepared for the period from 1 January 2005 to
31 December 2005 comprises the total amounts of three groups of revenues and costs:
— result on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 38,810,606.97
— result on other operating activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 4,295,626.27
— result on financial activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 1,082.35
The financial result disclosed in the profit and loss account — net profit of PLN 27,712,517.35 is reported
in the same amount in the balance sheet — item A.VIII relating to equity “net profit (loss)”.
The financial result disclosed in the profit and loss account as a comparison of revenues and costs, was
correctly recognised with due consideration for the principles of accounting, i.e. accruals basis,
commensurability of costs and revenues, and completeness and caution.
Revenues and costs were correctly classified and recorded under relevant items of the profit and loss
account on the basis of accounting documents maintained and closed as at year end.
IV. Reliability and Integrity of Supplementary Report

The Supplementary Report to the financial statements includes introduction to the financial statements,
additional information and explanations (notes).
The Supplementary Report contains information required under the provisions of Article 48 of the Act on
Accounting, and the data disclosed are in line with the data reported in the balance sheet and in the profit and loss
account.
V. Integrity of Cash Flow Statement

The cash flow statement was drawn up in line with the Company’s accounting policies on an indirect
method basis.
The information disclosed in the cash flow statement is consistent with the balance sheet and profit and
loss account data, statement of changes in equity and supplementary report as well as with the Company’s
accounting records. Individual cash flows have been classified under relevant items of the statement.
F-141
REPORT

The cash flow statement indicates that:
— cash at beginning of the audited period totalled . . . . . . . . . . . . . . . . . . . . PLN 1,393,988.69

— increase in 2005 totalled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 1,267,471.13
— cash at the end of the audited period amounted to . . . . . . . . . . . . . . . . . . PLN 2,661,459.82
VI. Integrity of Statement of Changes in Equity
The Company has prepared this item of the financial statements in line with the provisions of Article 48a,
paragraph 1, point 1 of the Act of Accounting. The data disclosed in the statement of changes in the Company’s
equity are in compliance with the balance sheet and with the profit and loss account.
The statement indicates that in the audited period equity increased by PLN 140,098,344.58.
VII. Reliability and Integrity of Report on Company Operations
The Management Board of the Company attached to the financial statements a report on the Company’s
operations in the audited period, i.e. from 1 January 2005 to 31 December 2005. The report disclosures comply
with the requirements of Article 49, paragraph 2 of the Act on Accounting.
E. Summary of Audit Findings
In the examination of books of accounts and individual items of the financial statements, including the
items affecting the level of fiscal settlements with the budget, audited samples were used on the basis of which
conclusions on the correctness of the audited items were drawn.
During the audit of the Company’s financial statements we did not notice any irregularities that might
have a material effect on the correctness of information disclosed herein.
During the audit we did not notice any facts indicating the occurrence of a breach of law that might have
an effect on the financial statements. During the audit, we received a written confirmation from the Board of
Management that during the accounting year no violations of the law occurred.
The Auditor’s Opinion, constituting a separate document, presents the summary findings of the audit.
The following Report consists of 35 pages numbered consecutively. Each page has been signed by the
expert auditor.

Alina Dziuba Stefan Czerwiński, M.Sc.
Reg. No. 5577/793 Reg. No. 9449/7400

Reg. No. 5691/802
Lublin, 27 February 2006
F-142
Audited Financial Statements
for the year ended 31 December 2005 of
HSW-Walcownia Blach Spółka z o.o.
F-143
HSW — WALCOWNIA BLACH SP. Z O.O.
INDEPENDENT AUDITOR’S OPINION
For the General Meeting of Shareholders and the Supervisory Board of HSW — Walcownia Blach
Spółka z o.o. in Stalowa Wola.
We have audited the attached financial statements of HSW — Walcownia Blach Spółka z o.o. with its
registered seat in Stalowa Wola at ul. Kwiatkowskiego 1, 37-450 Stalowa Wola, including:
1) introduction to the financial statements,
2) balance sheet prepared as at 31 December 2005, reporting total assets and liabilities of
PLN 46,205,599.62
3) profit and loss account for the period from 1 January 2005 to 31 December 2005, reporting net
profit of PLN 6,997,630.47
4) statement of changes in equity in the period from 1 January 2005 to 31 December 2005, reporting
an increase in equity by PLN 27,428,630.47
5) statement of cash flows in the period from 1 January 2005 to 31 December 2005, reporting an
increase of cash by PLN 68,577.10
6) additional information and explanations.
It is the responsibility of the Management Board of the Company to prepare these financial statements.
Our task was to audit the financial statements and express an opinion concerning their consistency, adequacy and
clarity as well as the adequacy of the books of accounts on the basis of which these financial statements were
prepared.
Our audit of the financial statements was performed in accordance with the following provisions:
1) Chapter 7 of the Act of 29 September 1994 on Accounting (uniform text Dziennik Ustaw of 2002
No. 76, item 694, with subsequent amendments),
2) auditing standards adopted by the National Board of Certified Auditors in Poland,
3) International Financial Audit Standards in matters not regulated in the provisions specified above.
The audit of the financial statements was planned and performed so as to obtain a viable and sufficient
basis on which to express a reliable opinion. In particular, the audit comprised verifying the adequacy of the
accounting policies applied by the Company and material estimates, checking — largely on a test basis — the
accounting records and evidence relating to the amounts and information reported in the financial statements, and
the overall evaluation of the financial statements.
We believe that the audit has given us sufficient basis to express a reliable opinion.
It is our view that the audited financial statements, including numerical data and narrative:
a) present in a reliable and transparent manner all information significant for the assessment of the
asset structure and financial standing of the Company as at 31 December 2005 as well as its
financial performance in the financial year from 1 January 2005 to 31 December 2005,
b) was prepared, in all material aspects, in accordance with the accounting policies laid down under
the above Act, based on accurately maintained books of accounts,
c) comply with the legal regulations and the provisions of the Company’s Articles of Association
affecting the substance of the financial statements.
F-144
The information disclosed in the report on the Company’s operations is complete within the meaning of
Article. 49, paragraph 2 of the Act on Accounting, and the information contained therein, derived from the
financial statements, is consistent with them.
DORADCA
Zespół Doradców Finansowo-Ksie˛gowych Sp. z o.o.
Expert Auditor GRUPA FINANS-SERVIS
20-011 Lublin Al.J.Piłsudskiego 1a
Reg. No. 232

Anna Perzyk Stefan Czerwiński, M.Sc.
Reg. No. 8294/885 Reg. No. 9449/7400

Reg. No. 5691/802
Lublin, 4 March 2006 Corporate seal of the authorised entity
F-145
REPORT
HSW — Walcownia Blach Spółka z o.o. in Stalowa Wola for 2005
Contents
A. Introductory Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-147

I. Audited Company Identification Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-147
II. Information on Entity Authorised to Audit Financial Statements for 2005 . . . . . . . . . . . . . . . . . F-148
III. Information on Financial Statements for the Period Preceding the Audited Year . . . . . . . . . . . F-148
IV. Information Identifying Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-149
V. Statement of the independent expert auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-150
B. Review of Assets and Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-150
C. Evaluation of the Reliability of the Accounting System Used and Associated Internal
Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
I. Reliability of Accounting System Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
II. Balance Sheet Assets and Liabilities Stocktaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
D. Information on Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
I. Reliability and Integrity of Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
1. Balance sheet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-165
2. Balance sheet liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-166
II. Discussion on Selected Balance Sheet Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-166
1. Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-166
2. Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-166
3. Short-term receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-167
4. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-167
5. Provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-167
6. Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-167
7. Short-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-167
8. Deferred Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-168
III. Reliability and Integrity of Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-168
IV. Reliability and Integrity of Supplementary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-168
V. Integrity of Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-169
VI. Integrity of Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-169
VII. Reliability and Integrity of Report on Company Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-169
E. Summary of Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-169
F-146
REPORT
HSW — Walcownia Blach Spółka z o.o. in Stalowa Wola for 2005 (Continued)
A. Introductory Information
I. Audited Company Identification Data
1. Name and seat of the Company
HSW — Walcownia Blach Spółka z o.o. in Stalowa Wola, ul. Kwiatkowskiego 1, 37-450 Stalowa Wola.
The Company operates under the Articles of Association drawn up in the form of a Notarial Deed on
27 January 2004, Rep. A No. 275/2004.
The Company was established for the time indeterminate.
2. Registration in the National Court Register

Entry Number: 0000195919
Entry date: 18 February 2004
Name and seat of the Court: Local Court in Rzeszów, Twelfth Economic Division of the National Court
Register.
3. Company’s identification numbers

NIP: 865-23-72-950 (VAT Registration number)
REGON: 831368283 (statistical number)
4. Objects of the Company’s Activity

During the audited period the Company conducted its business activity in line with objects laid down
under the Company’s Articles of Association and the entry in the National Court Register. The object of activity
included in the main:
Š production of cast iron and steel as well as steel alloys,
Š other preliminary work on cast iron and steel and production of steel alloys,
Š metalworking and metal coating,
Š production of mechanical tools,
Š technical studies and analyses,
Š management of metal waste and scrap metal.
5. Equity
5.1. The Company’s share capital disclosed in the balance sheet as at 31 December 2005 amounted to
PLN 33,255,881.11 and included:
— initial capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 20,481,000.00
— reserve capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 2,282,600.64
— other reserve capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 3,494,650.00
— net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 6,997,630.47
5.2. Pursuant to the Company’s Articles of Association and the entry in the National Court Register, the
Company’s share capital amounts to PLN 20,481,000.00 and it is divided into 100 shares at PLN 204,810.00
each.
During the accounting year 2005 the share capital increased by PLN 20,431,000.00 in respect of an
increase of the share capital by the shareholders of HSW — Zakład Metalurgiczny Spółka z o.o. in Stalowa
Wola. This increase was covered by non-cash contribution in the form of assets (fixed assets and intangible
assets).
As of 27 January 2006, 100% of the shares in the Company were taken over by ZŁOMREX SA.
F-147
REPORT
A. Introductory Information (continued)

5.3. HSW — Zakład Metalurgiczny Spółka z o.o., is the sole owner of the company — during the audited
period it had 100% of the Company’s shares.
During the audited period the structure of ownership remained unchanged.
6. Information on Entities Associated with the Audited Entity

6.1. The audited Company is a member of a Group of Companies with Huta Stalowa Wola Spółka
Akcyjna steelworks, a joint stock company as the dominant entity.
7. Head of the Entity

The Company’s Board of Management performs the function is the Head of the Entity. As at 4 March
2006 the composition of the Management Board was as follows:
— Mr Bogdan Burdzy — President of the Management Board
— Mr Andrzej Je˛druch — Member of the Management Board
During the audited period the composition of the Management Board was the following:
— Mr Wincenty Likus — President of the Management Board
— Mr Bogdan Burdzy — Member of the Management Board
II. Information on Entity Authorised to Audit Financial Statements for 2005

1. Name and seat of the entity authorised to audit financial statements
DORADCA Zespół Doradców Finansowo-Ksie˛gowych Spółka z o.o.
GRUPA FINANS-SERVIS
Al. J. Piłsudskiego 1a
20-011 Lublin
DORADCA Spółka z o.o. is registered on the list of entities authorised to audit financial statements kept
by the National Board of Certified Auditors, entry No. 232.
2. Selection of the entity to audit financial statements

Resolution No. 33/7/II/2005 of the Supervisory Board
Date of adoption: 29 November 2005
3. Auditing team conducting the audit of financial statements

Pursuant to the Agreement No. 184/LU/2005 of 8 December 2005 concluded with the Company’s
Management Board, the audit of the financial statements was performed in the seat of the Company during the
period from 27 February 2006 to 4 March 2006.
The audit of financial statements was conducted on behalf of the auditing entity by Anna Perzyk, Expert
Auditor, Reg. No. 8294/885.
4. Declaration of impartiality and independence of the auditing entity

The entity auditing the financial statements and the auditor performing the audit meet the requirements of
impartiality and independence set forth under the Act on Accounting.
III. Information on Financial Statements for the Period Preceding the Audited Year
1. Information on the entity auditing financial statements
The financial statements for the previous accounting period from 18 February 2004 to 31 December 2004
were audited by DORADCA Zespół Doradców Finansowo-Ksie˛gowych Spółka z o.o. GRUPA FINANS-
SERVIS in Lublin.
F-148
REPORT

2. Type of opinion issued
No reservations were raised in the opinion issued.
3. Approval of financial statements

Body of approving authority: Ordinary Meeting of Shareholders of Body of approving authority:
Ordinary Meeting of Shareholders of HSW — Walcownia Blach Spółka z o.o.
Resolution No. 03/Z/2005
4. Manner of distributing profit for the previous accounting year

Body of approving authority: Ordinary Meeting of Shareholders of HSW — Walcownia Blach Spółka
z o.o.
Resolution No. 04/Z/2005
The net profit totalling PLN 5,777,250.64 for the previous accounting year was designated as follows:
a) reserve capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 2,282,600.64
b) supplementary capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 3,494,650.00
The said distribution was properly entered in the books of accounts for the audited period.
5. Information on the filing and announcing of the approved financial statements for the previous accounting
period
The approved financial statements for the period preceding the audited period were:
a) filed along with the other documents with the Local Court in Rzeszów, Twelfth Commercial
Division of the National Court Register on 20 July 2005 pursuant to the provisions of Article 69 of
the Act on Accounting,
b) pursuant to the provisions of Article 70 of the Act on Accounting, they were published in Monitor
Polski B on 9 September 2005,
c) filed in the Fiscal Office on 15 June 2005 under the provisions of Article 27 of the Act of
15 February 1992 on Corporate Income Tax.
IV. Information Identifying Audited Financial Statements

1. The audited financial statements for the period from 1 January 2005 to 31 December 2005 include:
a) introduction to the financial statements,
b) balance sheet prepared as at 31 December 2005, reporting total assets and liabilities of
PLN 46,205,599.62
c) profit and loss account (by function) for the period from 1 January 2005 to 31 December 2005,
reporting net profit of PLN 6,997,630.47
d) statement of changes in equity,
e) statement of cash flows, reporting an increase in net cash during the audited period by
PLN 68,577.10
f) additional information and explanations.
2. Pursuant to the provisions of Article 49 of the Act of 29 September 1994 on Accounting, the Head of
the Company drew up a report on its operations during the period from 1 January 2005 to 31 December 2005.
F-149
REPORT

V. Statement of the independent expert auditor
1. It is the responsibility of the Company’s Management Board to prepare these financial statements in a
proper, reliable and reasonable manner, which has been duly confirmed.
In the declaration submitted, the Management Board of the Company confirmed that, to the best of their
knowledge and belief, the information disclosed to us was true and reliable, and it covered all events that might
have an effect on the financial statements.
The Board made accounting books and other required documents available to us and provided us with
explanations necessary to issue our opinion.
The Management Board of the Company submitted a declaration of 4 March 2006 confirming
Š the completeness of the accounting records in the accounting books,
Š the disclosure in the financial statements of any contingency liabilities,
Š the disclosure in the financial statements of any material economic events that occurred before the
date of the declaration.
2. It was not the purpose of the audit to detect and explain events liable to prosecution or irregularities
which could potentially arise outside of the accounting system.
3. It was not the purpose of the audit to determine the correctness of prices applied in dealings between
affiliated entities.
B. Review of Assets and Financial Position

The audit covered financial statements comprising the balance sheet, profit and loss account, cash flow
statement, and economic ratios for the analysed and previous years.
For the purpose of the audit the statements have been modified as follows:
1) the balance sheet
Š the contents has been limited to the absolute minimum of information specified in the groups
(fixed assets, working capital, equity and liabilities) and sub-groups,
Š liabilities and provisions for liabilities are divided into long and short-term liabilities:
Š long-term liabilities include provision in respect of deferred income tax, long-term
provisions for employee benefits and similar, and long-term liabilities,
Š short-term liabilities include short-term provisions for employee benefits and similar, other
short-term provisions, and short-term liabilities,
2) the profit and loss account:
Š inclusion of additional information concerning the results broken down into separate types
of business activity,
Š elimination of heavily analytical items.
The analysis was performed in current prices, since inflation rates remain fairly stable.
Analysis of Balance Sheet and Financial Liquidity and Solvency Ratios

The comparative variant of balance sheet data and basic economic and financial ratios are presented in
Tables 1 and 2.
As at the end of 2005 the balance sheet total increase relative to the level as at 31 December 204 by
129.33%, mainly due to increased initial capital by PLN 20,431.0 thousand effected through a non-ash
contribution in the form of fixed assets and intangible assets.
The biggest increase in the Company’s current assets, i.e. by 50.75%, is reported in short-term
receivables, including accounts receivable.
F-150
REPORT

In terms of sources of finance, a significant increase by 53.08% is reported in provisions and long-term
liabilities, mainly in respect of the loan taken.
These changes had an effect on the structure of the Company’s assets.
As at the end of 2005, the immobility of assets ratio was up by 50.0% relative to the level as at
31 December 2004, i.e. up to 53.15%; the share of current assets was down from 96.90% as at 31 December 2004
to 46.85% as at 31 December 2005.
The year 2005 saw a clear domination of equity in the structure of the Company’s liabilities. During the
audited period their value was up by 470.70% reaching 71.97% of the total financing sources. The main item in
the Company’s equity as at the end of 2005 was its share capital (44.33%).
The structure of liabilities and provisions, short-term items were dominant. Their value was down in the
audited period by 17.46% reaching 22.72% of total liabilities.
Among long-term foreign capital was a loan taken with WFOŚiGW Voivodship Environmental
Protection and Water Management Fund and long-term provisions for employee benefits.
Besides the increase in the initial capital effected by the shareholder in the form of fixed assets
contributed thereto, the growth rate was attributed to the profit generated in 2005, which other than the amount
designated for the disbursement of the dividend is treated as the Company’s equity.
These changes translated into an increase of the durability of the financing structure by 40.4 percentage
point to the level of 77.28%.
During the audited period the Company duly observed the principle of covering its fixed assets with
capital and its partial employment in the financing of current assets. This trend is evidenced in the balance sheet
“golden” principle which as at 31 December 2005 amounted to 145.40%.
Financial liquidity was up in all analytical indicators which were close to levels considered as optimal.
The stock turn, collection, and payment ratios cannot be compared with the previous accounting year,
since it did not cover 12 calendar months of the Company’s activity.
F-151
REPORT
Table 1. Balance sheets for years 2004 and 2005
31 Dec. 2003 31 Dec. 2004 31 Dec. 2005 Change (previous year =100%)
Description Amount As % of total Amount As % of total Amount As % of total 2003/2002 2004/2003
1 2 3 4 5 6 7 8 9
ASSETS
A. Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625,198.51 3.10% 24,557,883.58 53.15% 3928.01%
I. Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404,880.78 0.88%
II. Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211,144.51 1.05% 23,048,388.80 49.88% 10915.93%
III. Long-term receivables
IV. Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543,000.00 1.18%
V. Long-term prepayments and accrued income . . . . . . . . . . . . . 414,054.00 2.06% 561,614.00 1.22% 135.64%
B. Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,522,746.54 96.90% 21,647,716.04 46.85% 110.88%
I. Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,874,951.77 39.09% 5,520,365.53 11.95% 70.10%
II. Short-term receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,904,108.05 49.16% 14,258,803.32 30.86% 143.97%
F-152
incl.: accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,285,503.53 46.09% 13,997,696.61 30.29% 150.75%

III. Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,741,228.21 8.64% 1,809,805.31 3.92% 103.94%
incl.: cash and other cash assets . . . . . . . . . . . . . . . . . . . . . . . 1,741,228.21 8.64% 1,809,805.31 3.92% 103.94%
IV. Short-term prepayments and accrued income . . . . . . . . . . . . . 2,458.51 0.01% 58,741.88 0.13% 2389.33%
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,147,945.05 100.00% 46,205,599.62 100.00% 229.33%
EQUITY AND LIABILITIES

A. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,827,250.64 28.92% 33,255,881.11 71.97% 570.70%
I. Share (initial) capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000.00 0.25% 20,481,000.00 44.33% 40962.00%
II. Outstanding contribution to share capital
III. Own shares
IV. Supplementary capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,282,600.64 4.94%
V. Revaluation capital
VI. Other reserve capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,494,650.00 7.56%
VII. Profit (loss) carry forward
VIII. Net profit (loss) incl. dividend . . . . . . . . . . . . . . . . . . . . . . . . 5,777,250.64 28.67% 6,997,630.47 15.14% 121.12%
B. Liabilities and provisions against liabilities . . . . . . . . . . . . 14,320,694.41 71.08% 12,949,718.51 28.03% 90.43%
I. Provisions and long-term liabilities . . . . . . . . . . . . . . . . . . . . . 1,600,630.25 7.94% 2,450,233.38 5.30% 153.08%
incl.: credit facilities and loans . . . . . . . . . . . . . . . . . . . . . . . . 612,650.00 1.33%
II. Provisions and short-term liabilities . . . . . . . . . . . . . . . . . . . . 12,720,064.16 63.13% 10,499,485.13 22.72% 82.54%
incl.: credit facilities and loans . . . . . . . . . . . . . . . . . . . . . . . . 88,468.79 0.19%
accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,264,263.90 55.91% 8,116,744.80 17.57% 72.06%
Total equity and liabilities . . . . . . . . . . . . . . . . . . 20,147,945.05 100.00% 46,205,599.62 100.00% 229.33%
REPORT
Table 2. Key balance sheet amounts and economic ratios
No. Ratio Formula Ratio (amount) for: Ratio (amount) change
(formula adopted) Year 2003 18.02 - 31.12.2004 Year 2005 03-02 04-02 05-04
Key balance sheet amounts
1 Net assets (entity’s book value) . . . . . . . . . . . . . . . . . . . . . . Equity ⳮ dividend 5,827,250.64 33,255,881.11 570.70%
2 Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity + provisions and long-term 7,427,880.89 35,706,114.49 480.70%
liabilities
3 Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed capital ⳮ fixed assets 6,802,682.38 11,148,230.91 163.88%
Static financial liquidity ratios
F-153
Current assets
4 Current ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.53 2.06 0.53
Current liabilities
Liquid current assets
5 Quick current ratio I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.92 1.53 0.61
Current liabilities
6 Quick current ratio II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.137 0.172 0.035
Current liabilities
Collection and stock turn ratios
Total stock (average) x 360
7 Stock-turn — in days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 27 12
Cost of operating activity
Accounts receivable (average) x 360
8 Collection period — in days . . . . . . . . . . . . . . . . . . . . . . . . 16 43 27
Income from sales
Accounts payable (average) x 360
9 Payment period — in days . . . . . . . . . . . . . . . . . . . . . . . . . . 22 39 17
Cost of operating activity ⳮ depreciation
REPORT
No. Ratio Ratio (amount) for: Ratio (amount) change
Formula Year
(formula adopted) Year 2003 18.02 - 31.12.2004 2005 03-02 04-02 05-04
Solvency and equity-capital ratios
Total liabilities
10 Debt to equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.08% 28.03% -43.05
Total assets
Equity
11 Equity to total assets ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.92% 71.97% 43.05
Total assets
12 Equity to fixed assets ratio Equity
932.06% 135.42% -796.65
(assets utilisation ratio) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed assets
F-154
13 Self-financing of current assets

(utilisation of foreign capital ratio) . . . . . . . . . . . . . . . . . . . . . . . Current liabilities 65.16% 48.50% -16.65
Current assets
Fixed capital
14 “Golden” principle ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1188.08% 145.40% -1042.69
Fixed assets
Fixed capital
15 Durability of financial structure ratio . . . . . . . . . . . . . . . . . . . . . . . 36.87% 77.28% 40.41
Total liabilities
Fixed assets
16 Immobility of funds ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10% 53.15% 50.05
Total assets
Note! Additional information

1 Equity = Share Capital ⳮ Dividend; Total Liabilities = Liabilities and Provisions against Liabilities
2 Accounts receivable and payable over 12 months carried forward to respective long-term receivables and accounts payable; Liquid Current Assets = Current Assets ⳮ
Stock ⳮ Short-term Prepayments and Accrued Income
3 Long-term liabilities = Long-term: provisions, liabilities, Prepayments and Accrued Income, Accounts Payable with maturity over 12 months
4 Current Liabilities = Short-term:Provisions, Liabilities, Accruals and Deferred Income after eliminating Accounts Payable with Maturity over 12 months + Dividend
5 Earnings on Sales = Net Sales of Products + Net Sales of Merchandise and Materials; t ⳮ Income Tax Rate
REPORT
Structure of Assets
31 Dec. 2004 31 Dec. 2005
Fixed Assets Current assets
3%
47% 53%
97%
F-155
Structure of Current Assets

Stock
Short-term receivables
Short-term prepayments and accrued income
8% 0%
9% 26%
40%
51%
66%
REPORT
Structure of Liabilities and Equity
31 Dec. 2004 31 Dec. 2005
Equity
Liabilities and provisions for liabilities
29% 28%
71% 72%
F-156
Structure of External Funding

Provisions for liabilities
Long-term liabilities
Short-term liabilities
Accruals and deferred income
15%
19%
5%
85% 76%
REPORT
Structure and changes of items determining financial result, profitability and efficient utilisation of
resources
Table 3 presents a comparison of profit and loss accounts. The cost structure and changes broken down
by type is presented in Table 4. Profitability and efficient use of resources ratios are presented in Table 5.
During the audited period income from sale was the main source of the Company’s earnings accounting
for 99.16% of the total earnings in 2005.
In terms of change, the years presented in the analysis cannot be compared, since the previous accounting
years covers a period of 10 months only.
The structures of costs and earnings are similar. The costs of products sold and the value of goods and
services sold accounted for 98.35% of the costs incurred in 2005.
As in the case of earnings, costs cannot be compared with those incurred during the previous accounting
year.
During the audited period, the Company’s profit from sales totalled PLN 9,314.4 thousand, down by
2.22% relative to the previous year. The profit from sales adjusted by negative results on other operating activity
(PLN — 608.0 thousand) and financial activity (PLN — 45.5 thousand) as well as mandatory charges on the
financial result in the form of income tax yields net profit totalling PLN 6,997.6 thousand.
The specific character of the Company’s activity in 2005 is reflected in the breakdown of costs by type.
In 2005, 84.81% of the total costs incurred was attributed to the consumption of materials and energy.
The other major cost items refer to payroll (7.02%) and outsourced services (5.06%).
An improved net result and a decrease in the result on sales were reflected in changes in profitability
indicators. The profitability ratio measured as profit from sale was down in 2005 by 1.07 percentage point
reaching the level of 9.50%.
Apart from the profitability of sales measured by net profit, the remaining indicators were down.
F-157
REPORT
Table 3. Profit and Loss Accounts — By Function
Year 2003 18.02 - 31.12.2004 Year 2005 Change (previous year =100%)
1 2 3 4 5 6 7 8 9
Total income and profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,305,136.82 100.00% 98,919,684.61 100.00% 109.54%
Total costs and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,095,500.18 100.00% 90,258,718.14 100.00% 108.62%
A. Net income from sale of products, goods, and mater . . . . . . . 90,120,488.38 99.80% 98,087,546.22 99.16% 108.84%
I. Net income from sale of products . . . . . . . . . . . . . . . . 86,001,641.10 95.23% 93,878,258.09 94.90% 109.16%
II. Net income from sale of goods and materials . . . . . . . 4,118,847.28 4.56% 4,209,288.13 4.26% 102.20%
B. Cost of products, goods, and materials sold . . . . . . . . . . . . . . 78,528,751.27 94.50% 85,886,945.17 95.16% 109.37%
I. Cost of manufacturing products sold . . . . . . . . . . . . . 74,520,829.00 89.68% 81,593,915.03 90.40% 109.49%
F-158
II. Value of goods and materials sold . . . . . . . . . . . . . . . 4,007,922.27 4.82% 4,293,030.14 4.76% 107.11%
C. Profit (loss) on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 11,591,737.11 x 12,200,601.05 x 105.25%
D. Selling costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283,232.03 0.34% 347,415.21 0.38% 122.66%
E. General management costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,782,170.80 2.14% 2,538,771.20 2.81% 142.45%
F. Profit (loss) on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 9,526,334.28 x 9,314,414.64 x 97.78%
G. Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,386.82 0.02% 152,934.10 0.15% 788.86%
H. Other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,092,271.43 2.52% 760,903.82 0.84% 36.37%
Result on other operating activity . . . . . . . . . . . . . . . . . . . . . x -2,072,884.61 x -607,969.72 x 29.33%
I. Profit (loss) on operating activity . . . . . . . . . . . . . . . . . . . . x 7,453,449.67 x 8,706,444.92 x 116.81%
J. Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,261.62 0.18% 679,204.29 0.69% 410.99%
K. Financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,074.65 0.49% 724,682.74 0.80% 177.15%
Result on financial activity . . . . . . . . . . . . . . . . . . . . . . . . . . x -243,813.03 x -45,478.45 x 18.65%
L. Profit (loss) on economic activity . . . . . . . . . . . . . . . . . . . . . x 7,209,636.64 x 8,660,966.47 x 120.13%
M. Result on extraordinary events . . . . . . . . . . . . . . . . . . . . . . . . x x x
N. Gross profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 7,209,636.64 x 8,660,966.47 x 120.13%
O. Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 1,432,386.00 x 1,663,336.00 x 116.12%
P. Other mandatory reductions of profit . . . . . . . . . . . . . . . . . . . x x x
R. Net profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 5,777,250.64 x 6,997,630.47 x 121.12%
incl.: dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x x x
Net profit (loss) incl. dividend . . . . . . . . . . . . . . . . . . . . . . . x 5,777,250.64 x 6,997,630.47 x 121.12%
REPORT
Table 4. Structure and changes in costs by type
Year 2003 18.02 - 31.12.2004 Year 2005 Change (previous year =100%)
Description Amount As % of total Amount As % of total Amount As% of total 2003/2002 2005/2004
1 2 3 4 5 6 7 8 9
1 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,868.14 0.07% 271,231.28 0.31% 453.05%
2 Materials and energy consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,027,425.72 88.27% 74,436,782.67 84.81% 99.21%
3 Outsourced services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,446,322.46 4.05% 4,440,181.91 5.06% 128.84%
4 Taxes and charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,733.96 0.12% 301,594.86 0.34% 293.57%
5 Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,527,316.40 5.33% 6,157,768.84 7.02% 136.01%
6 Social insurance and other benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,371,762.23 1.61% 1,670,829.90 1.90% 121.80%
7 Other costs by nature of expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462,039.02 0.54% 491,366.13 0.56% 106.35%
Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,997,467.93 100.00% 87,769,755.59 100.00% 103.26%
Table 5. Profitability and utilisation of resources ratios

F-159
No. Ratio Formula For Ratio change

(formula adopted) Year 2003 18.02 - 31.12.2004 Year 2005 03-02 04-02 05-04
Profitability ratios
Net profit
1 Return on sales by net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.41% 7.13% 0.72
Revenue from sales
Profit from sales
2 Return on sales by profit from sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.57% 9.50% -1.07
Revenue from sales
Net profit
3 Return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.67% 15.14% -13.53
Total assets
Net profit + interest x (1-t)
4 Return on equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.02% 15.39% -13.63
Total liabilities
Net profit
5 Return on capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.14% 21.04% -78.10
Equity
Return on share capital -
6 Gearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.12 5.65 -64.47
Return on equity
Utilisation of resources (activity) ratios
Revenue from sales
7 Total assets stock turn (productivity) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.95 2.96 -5.99
Total assets – average
Revenue from sales
8 Fixed assets stock turn (productivity) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288.29 7.79 -280.50
Fixed assets – average
Revenue from sales
9 Employee productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437,478.10 478,475.84 109.37%
Average employment level
REPORT
Breakdown of Costs
Change in Total Revenues and Costs Total income and profit
Total costs and losses Depreciation
100,000,000.00 Materials and energy consumption
90,000,000.00 Outsourced services

80,000,000.00
Taxes and charges
70,000,000.00
60,000,000.00 Remuneration
50,000,000.00 Social insurance and other benefits

40,000,000.00
Other costs by nature of expenses
F-160
30,000,000.00
20,000,000.00
10,000,000.00
0.00
Year 2003 18.02 - 31.12.2004 Year 2005
18.02-31.12.2004
2% 1%
5%
4%
Result on sales
Change in Financial results Result on operating activity
Result on economic activity
Gross result
10,000,000.00 Net result
9,000,000.00
8,000,000.00
7,000,000.00 88%
6,000,000.00
Year 2005
[PLN]
5,000,000.00 2% 1%
7%
5% 0%
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0.00
Year 2003 18.02 - 31.12.2004 Year 2005
85%
REPORT
Profitability Ratios
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
F-161
0.00%
Year 2003 18.02 - 31.12.2004 Year 2005
Return on equity Return on total assets Return on capital employed
Liquidity Ratios
2.50
2.00
1.50
1.00
0.50
0.00
Year 2003 18.02 - 31.12.2004 Year 2005
Current ratio Quick current ratio I

REPORT

Cash flow analysis and financial liquidity ratios
Table 6 presents the synthesis of cash flows. Table 7 shows selected financial liquidity ratios.
The cash flow structure did not undergo significant changes relative to the previous year. Operating
activity continued to remain the main source of cash in the Company. This was evidenced in the value of
capacity for generating net cash on operating activity which reached the level of 78.58% during the audited
period. The total value of cash flows from operating activity at PLN 2,548.1 thousand increased by 37.21%
relative to the previous year. The biggest adjustments to the net profit referred to receivables and liabilities.
The biggest cost item in the audited period referred to investment outlays.
Cash comes mainly from net profit and from loans. The funds received were used to finance investments
in tangible and financial fixed assets.
During the audited year total net cash flows were positive, though significantly lower than in the previous
year. Cash flow generated on operating and financial activity was sufficient to cover all investment outlays. The
cash efficiency on sales which totalled 2.59%, up by 0.53 percentage point relative to the previous year.
F-162
REPORT
Table 6. Cash Flow Statements
Year 2003 18.02 - 31.12.2004 Year 2005 Change (previous year=100%)
1 2 3 4 5 6 7 8 z
A. Cash flow from operating activity
I. Net profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,777,250.64 311.09% 6,997,630.47 274.62% 121.12%
II. Adjustments, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,920,124.50 -211.09% -4,449,518.99 -174.62% 113.50%
1. Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,868.14 3.22% 271,231.28 10.64% 453.05%
2. Profit (loss) due to exchange rate differences
3. Interest and participation in profits (dividends)
4. Profit (loss) on investment activity
5. Change in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,726,319.08 92.96% 309,324.10 12.14% 17.92%
6. Change in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7,874,951.77 -424.04% 2,354,586.24 92.41% -29.90%
F-163
7. Change in liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9,904,108.05 -533.30% -4,354,695.27 -170.90% 43.97%

8. Change in short-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,107,236.37 651.93% -2,852,575.52 -111.95% -23.56%
9. Change in accruals and deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . -34,488.27 -1.86% -183,314.12 -7.19% 531.53%
10. Other adjustments 5,924.30 0.23%
III. Net cash flow on operating activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,857,126.14 100.00% 2,548,111.48 100.00% 137.21%
B. Cash flow on investment activity
I. Income
1. Sale of intangible assets and tangible fixed assets
2. Other income
II. Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -165,897.93 100.00% -2,631,184.38 100.00% 1586.03%
1. Purchase of intangible assets and tangible fixed assets fixed assets . . . . . . -63,239.50 38.12% -2,631,184.38 100.00% 4160.67%
2. Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -102,658.43 61.88%
III. Net cash flow on investment activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x -165,897.93 x -2,631,184.38 x 1586.03%
C. Cash flow on financial activity
I. Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000.00 100.00% 694,650.00 100.00% 1389.30%
1. Credit facilities and loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694,650.00 100.00%
2. Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000.00 100.00%
II. Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -543,000.00 100.00%
1. Dividends and other payments towards owners
2. Repayment of credits and loans
3. Interest
4. Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -543,000.00 100.00%
III. Net cash flow on financial activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 50,000.00 x 151,650.00 x 303.30%
D. Total net cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 1,741,228.21 x 68,577.10 x 3.94%
(Balance change of cash resources)
REPORT
Table 7. Financial liquidity change ratios
No. Ratio Formula For Change

(adopted formula) Year 2003 18.02 - 31.12.2004 Year 2005 03-02 04-02 05-04
1. Capacity to generate net cash on cash flow on operating activity

97.38% 78.58% 97.38 78.58 -18.80
operating activity ratio . . . . . . . . . . . . . cash flow on operating activity +
stock and financial gains
2. Net profit to net cash flow on operating net profit 311.09% 274.62% 311.09 274.62 -36.47
activity ratio . . . . . . . . . . . . . . . . . . . . . cash flow on operating activity
F-164
cash flow on operating activity

3. Cash availability ratio . . . . . . . . . . . . . . . . repayment of liabilities with interest + disbursement of 2936.66% 80.28% 2936.66 80.28 -2856.38
dividend + goodwill expenses and tangible fixed assets
4. Cash efficiency on sales ratio . . . . . . . . . . cash flow on operating activity 2.06% 2.59% 2.06 2.59 0.53
revenue from sales + other operating income
REPORT

Summary
In short, the financial standing of the Company is stable. During the audited period the Company’s equity
and capital structure was reasonable, which translated into favourable financial liquidity indicators. The general
level of debt is marginal. The activity conducted by the Company is profitable, and the profit generated is
designated to increase the self-financing of the Company’s operations. However, continued dependence on one
supplier may in future be a serious concern with respect to the deliveries of the basic raw material for production.
Assessment of the entity’s continued activity in the year following the audited period without significant
changes effected.
The audit of financial statements including the financial standing of the Company revealed no threats to
the Company’s continued activity in the year following the audited period due to intended or enforced suspension
of the existing activity (or material restrictions thereof).
C. Evaluation of the Reliability of the Accounting System Used and Associated Internal Control
I. Reliability of Accounting System Used
The Company keeps accounting books and prepares financial statements on the basis of current
accounting documents describing the adopted accounting system, as referred to in Article 10 of the Act on
Accounting of 29 September 1994, including the Corporate Chart of Accounts approved by the Management
Board of the Company.
In the audited period the Company did not make any changes to its accounting system.
The audit of financial statements did not reveal any irregularities in the accounting books which, if not
removed, could have a material effect on the audited financial statements, including:
Š the justification of the continuity of the adopted accounting policy,
Š correctness of the opening balance on the basis of the approved balance sheet for the previous year,
Š completeness and clarity of business operations duly confirmed by accounting documents issued in
line with the statutory requirements,
Š reliability, correctness and conformity of data reported in the financial statements with accounting
book records,
Š correctness of the transfer of data from reconciled accounting books to individual components of the
financial statements,
Š adequacy of archiving and safeguarding accounting books and accounting records as well as approved
financial statements.
II. Balance Sheet Assets and Liabilities Stocktaking

The audit confirmed that the Company performed the stocktaking of its assets and liabilities in
compliance with the principles and dates specified in Article 26 of the Act on Accounting.
The stocktaking results were correctly documented and the stocktaking variances were properly reported
in the accounting books for the audited period.
D. Information on Audited Financial Statements

I. Reliability and Integrity of Balance Sheet
1. Balance sheet assets
The values of individual items of assets as disclosed in the balance sheet constitute the Company’s assets
of properly assessed value capable of generating economic gains. Their value was presented in the balance sheet
in prices resulting from the principles of accounting adopted and presented in the introduction to the financial
statements and adjusted by depreciation and revaluation deductions (or write-offs).
F-165
REPORT

2. Balance sheet liabilities
The values of individual items of liabilities presented in the financial statements constitute sources of
financing the Company’s assets.
The value of individual groups of liabilities is presented as a breakdown into equity and external capital.
The evaluation of the above was performed in line with the principles of accounting:
Š equity — at nominal value,
Š provisions — at a value reasonably assessed,
Š liabilities — at amounts payable.
According to the declaration of the Company’s Management Board, there are no disputes or litigation
against the Company.
The balance sheet prepared as at 31 December 2005 contains information which complies with the
requirements laid down in the Act on Accounting. Individual items in the balance sheet result from accounting
records, and they were properly classified and presented.
The audit, conducted to a large extent on a test basis, confirmed the reliability of data presented in the
balance sheet.
II. Discussion on Selected Balance Sheet Items

1. Tangible fixed assets totalled PLN 23,048,388.80
In the balance sheet tangible fixed assets are reported net of accumulated depreciation. The
documentation on receipts and disposal of fixed assets is correct; relevant entries are reported in adequate
reporting periods.
The Company depreciates its fixed assets by spreading their initial value over the agreed scheduled
depreciation period in compliance with the accounting policy. Depreciation allowances are calculated on a
straight-line basis.
Fixed assets constitute collateral in the form of a lien for the total of PLN 458,891.66 in respect of the
loan taken.
Off-balance sheet records contain outsourced fixed assets used by the Company under operating lease
agreements at PLN 54,032.79.
Fixed assets under construction as at the balance sheet date refer mainly to costs incurred on purchasing:
— overburn remover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 845,457.44
— overhead travelling crane (with a control panel) . . . . . . . . . . . . . . . . . . . PLN 32,786.88
— insulation and stucco finish of the office building . . . . . . . . . . . . . . . . . PLN 40,700.00
2. Stock
During the accounting year the stock of materials, goods, work in progress and finished products were
subject to physical count.
As at the balance sheet date, the structure of stock is as follows:
— materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 1,431,207.98 25.93%
— semi-finished products and work in progress . . . . . . . . . . . . . PLN 4,048,897.27 73.34%
— goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 40,260.28 0.73%
The evaluation of stock was performed in line with the principles laid down in the accounting policy and
described in the introduction to the financial statements.
The evaluation of stock was performed with due consideration and conservative estimates, which led to
an increase in revaluation deductions of semi-finished products by PLN 3,085.74.
F-166
REPORT

Stock (materials, finished products, and goods) totalling PLN 1,150,000.00 was covered in transfer of
ownership contracts as collateral for the credit facility granted by the bank on 21 January 2006.
3. Short-term receivables
Accounts receivable, the major item in the current assets, constitute 30.29% of the Company’s assets as at
31 December 2005.
PLN 10,976,873.65 (i.e. 74.56%) with of accounts receivable was paid by the audit date, i.e. 1 March
2006.
Accounts receivable over 1 year overdue totalled PLN 240,742.63.
Accounts receivable were subject to stocktaking by way of balance reconciliation. By the audit date
(1 March 2006) PLN 3,686,210.00 in respect of accounts receivable was confirmed. Accounts receivable were
evaluated as falling due with due consideration and conservative estimates, i.e. after taking into account
revaluation deductions created on the basis of risk attributed to each account receivable.
4. Equity
4.1. Share capital of PLN 20,481,000.00 complies with the provisions of the Company’s Articles of
Association and entries in the Register of Entrepreneurs of the National Court Register, entry No. 0000195919.
During the accounting year the amount of the share capital increased by PLN 20,431,000.00 in respect of
the contribution effected by HSW — Zakład Metalurgiczny Spółka z o.o. This increase was effected by a
non-cash contribution in the form of fixed assets and intangible assets.
4.2. Reserve capital (established in compliance with the Articles) totalled PLN 2,282,600.64.
4.3. Other reserve capital (from the distribution of profit for 2004) totalled PLN 3,494,650.00.
4.4. Net profit of the accounting year of PLN 6,997,630.47 is in compliance with that disclosed in the
profit and loss account.
5. Provisions for liabilities

On the basis of calculations performed by an actuary, the Company established as at 31 December 2005 a
provision for possible future employee benefits in respect of jubilee awards and retirement payments in the
amount of PLN 2,033,604.18.
6. Long-term liabilities
Long-term liabilities, as presented in the Company’s balance sheet, comprise long-term liabilities (falling
due over 12 months from the balance sheet date) in respect of the loan agreement concluded with WFOŚiGW for
the amount of PLN 612,650.00 with a view to financing the modernisation of the pusher furnace. The last
instalment falls due on 30 June 2011.
Long-term liabilities were confirmed by the creditor and assessed in amounts due, i.e. jointly with the
interest due as at the balance sheet date. The interest for the loan period was calculated by the balance sheet date
and reported in financial costs therein.
7. Short-term liabilities
7.1. As at the balance sheet date, accounts payable totalled PLN 8,116,744.80, of which 100% fell due.
Generally speaking, during the audited period payments were effected in a timely manner.
The audit did not confirm the need to assess penalty interest for payments in arrears. PLN 8,116,744.80 in
respect of accounts payable was paid by the audit date, i.e. on 2 March 2006.
7.2. The short-term liabilities in respect of loans included a balance of a bank loan on the current account,
which falls due in 2006; said loan was granted to the Company by WFOŚiGW in the amount of PLN 88,468.79.
F-167
REPORT

The liabilities towards the said bank were confirmed in writing as at the balance sheet date. The bank loan
was assessed in amounts due, i.e. together with the interest due as at the balance sheet date.
In line with the due dates specified in the loan contract, the payment of the first instalment of PLN
82,000.00 is scheduled by 30 June 2006.
8. Deferred Income Tax

8.1. Long-term prepayments amount to PLN 561,614.00 and constitute assets in respect of deferred
income tax, calculated on negative temporary differences in corporate income tax. The biggest items which in
future will constitute a cost in respect of income tax, and which as at the balance sheet date were not reflected in
the gross result, referred to:
Š provisions for employee benefits,
Š provisions for future liabilities,
Š deductions revaluating assets in respect of accounts receivable.
8.2. Provision in respect of deferred income tax of PLN 2,039.00 was determined in line with the
requirements laid down in the Act on Accounting on positive temporary differences in corporate income tax and
comprised as at the balance sheet date:
Š assessed but not paid interest on bank deposits,
Š unrealised positive foreign exchange differences on receivables.
III. Reliability and Integrity of Profit and Loss Account

The profit and loss account was prepared in a comparative variant incompliance with the principles of the
accounting system and with due consideration for the provisions of Article 47 of the Act on Accounting.
The Company disclosed revenues, costs, profits and losses as well as taxes and mandatory charges on the
financial result separately in the profit and loss account for the current and previous financial years.
The audited profit and loss account for the period from 1 January 2005 to 31 December 2005, shows
earnings from the sale of products, goods and materials demonstrating the costs of operating activity in a
calculation variant and specifying the cost of product manufacturing, value of goods and materials sold (at
purchase prices), costs of sale (including trading costs), and costs of general management.
The gross financial result in the profit and loss account prepared for the period from 1 January 2005 to
31 December 2005 comprises the total amounts of three groups of revenues and costs:
— result on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 9,314,414.64

— result on other operating activity . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN — 607,969.72
— result on financial activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN — 45,478.45
The financial result disclosed in the profit and loss account — net profit of PLN 6,997,630.47 is reported
in the same amount in the balance sheet — item A. VIII relating to equity “net profit (loss)”.
The financial result disclosed in the profit and loss account as a comparison of revenues and costs, was
correctly recognised with due consideration for the principles of accounting, i.e. accruals basis,
commensurability of costs and revenues, and completeness and caution.
Revenues and costs were correctly classified and recorded under relevant items of the profit and loss
account on the basis of accounting documents maintained and closed as at year end.
IV. Reliability and Integrity of Supplementary Report

The Supplementary Report to the financial statements includes introduction to the financial statements,
additional information and explanations (notes).
The Supplementary Report contains information required under the provisions of Article 48 of the Act on
Accounting, and the data disclosed are in line with the data reported in the balance sheet and in the profit and loss
account.
F-168
REPORT

V. Integrity of Cash Flow Statement
The cash flow statement was drawn up in line with the Company’s accounting policies on an indirect
method basis.
The information disclosed in the cash flow statement is consistent with the balance sheet and profit and
loss account data, statement of changes in equity and supplementary report as well as with the Company’s
accounting records. Individual cash flows have been classified under relevant items of the statement.
The cash flow statement indicates that:
— cash at beginning of the audited period was . . . . . . . . . . . . . . . . . . . PLN 1,741,228.21

— increase in 2005 totalled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLN 68,577.10
— cash at the end of the audited period amounted to . . . . . . . . . . . . . . PLN 1,809,805.31
VI. Integrity of Statement of Changes in Equity

The Company has prepared this item of the financial statements in line with the provisions of Article 48a,
paragraph 1, point 1 of the Act of Accounting. The data disclosed in the statement of changes in the Company’s
equity are in compliance with the balance sheet and with the profit and loss account.
The statement indicates that in the audited period equity increased by PLN 27,428,630.47.
VII. Reliability and Integrity of Report on Company Operations

The Management Board of the Company attached to the financial statements a report on the Company’s
operations in the audited period, i.e. from 1 January 2005 to 31 December 2005. The report disclosures comply
with the requirements of Article 49, paragraph 2 of the Act on Accounting.
E. Summary of Audit Findings

In the examination of books of accounts and individual items of the financial statements, including the
items affecting the level of fiscal settlements with the budget, audited samples were used on the basis of which
conclusions on the correctness of the audited items were drawn.
During the audit of the Company’s financial statements we did not notice any irregularities that might
have a material effect on the correctness of information disclosed herein.
During the audit we did not notice any facts indicating the occurrence of a breach of law that might have
an effect on the financial statements. During the audit, we received a written confirmation from the Board of
Management that during the accounting year no violations of the law occurred.
The Auditor’s Opinion, constituting a separate document, presents the summary findings of the audit.
The following Report consists of 33 pages numbered consecutively. Each page has been signed by the
expert auditor.

Anna Perzyk Stefan Czerwiński, M.Sc.
Reg. No. 8294/885 Reg. No. 9449/7400

Reg. No. 5691/802
Lublin, 4 March 2006
F-169
REGISTERED OFFICE OF THE ISSUER AND THE COMPANY
Zlomrex International Finance S.A. Złomrex S.A.
48, boulevard des Coquibus 42-360 Poraj
BP 97 ul. Zielona 26
9 1003 Evry Cedex Poland
France
REGISTERED OFFICES OF THE GUARANTORS
Złomrex S.A. Zakład Walcowniczy - Złomrex Zbrojarnia Sp. z o.o.
42-360 Poraj Walcownia Bruzdowa Sp. z o.o. 42-400 Zawiercie
ul. Zielona 26 42-400 Zawiercie ul. Okólna 10
Poland ul. Okólna 10 Poland
Poland
HSW-Huta Stali Ferrostal Łabe˛dy Sp. z o.o. Odlewnia Metali Szopienice
Jakościowych S.A. 44-109 Gliwice Sp. z o.o.
37-450 Stalowa Wola ul. Zawadzkiego 26 40-389 Katowice
ul. Kwiatkowskiego 1 Poland ul. Ks. Majora Karola
Poland Woźniaka 24
Poland
LEGAL ADVISORS TO THE ISSUER AND THE COMPANY
As to US, Polish, French
and Austrian law
Dewey Ballantine LLP Dewey Ballantine Grzesiak
1301 Avenue of the Americas Spótka Komandytowa
New York, New York 10019-6092 Warsaw Stock Exchange Building
United States ul. Ksia˛źe˛ca 4
00-498 Warsaw
Poland
Orrick Rambaud Martel Wolf Theiss
25, Boulevard de l’Amiral Bruix Schubetring 6
75782 Paris Cedex 16 1010 Vienna
France Austria
LEGAL ADVISORS TO THE INITIAL PURCHASER
As to US, Polish, French
and Austrian law
White & Case LLP White & Case
5 Old Broad Street W. Danilowicz, W. Jurcewicz
London EC2N 1DW Wspólnicy-Kancelaria Prawna Sp.k.
United Kingdom ul. Marszalkowska 142
00-061 Warsaw
Poland
White & Case LLP Binder Grösswang
Auocats au Barreau de Paris Sterngasse 13
Toque Générale: J002, 11, Boulevard 1010 Vienna
de la Madeleine Austria
75001 Paris
France
INDEPENDENT AUDITORS INITIAL AUDITORS TO THE ISSUER
TO THE COMPANY KPMG SA Révision Gestion Audit
KPMG Audyt Sp. z o.o. Immeuble le Palatin 98, rue Barrault
ul. Chłodna 51, XVIp. 3 Cours du Triangle 75013 Paris
00-867 Warszawa 92939 LA DEFENSE Cedex France
Poland France
TRUSTEE, PAYING AGENT, AND LUXEMBOURG TRANSFER AGENT,
TRANSFER AGENT LUXEMBOURG PAYING AGENT AND
The Bank of New York LUXEMBOURG LISTING AGENT
One Canada Square The Bank of New York (Luxembourg) S.A.
London E14 5AL Aerogolf Center
United Kingdom 1A, Hoehenholf
L-1736 Senningerberg
Grand Duchy of Luxembourg
REGISTRAR LEGAL ADVISOR TO THE TRUSTEE
The Bank of New York As to US law
One Wall Street Ashurst
New York, New York 10286 Broadwalk House
United States 5 Appold Street
London EC2A 2HA
United Kingdom
We have not authorized any dealer, salesperson
or other person to give any information or represent OFFERING MEMORANDUM
anything to you other than the information contained in
this Offering Memorandum. You must not rely on
unauthorized information or representations.
This Offering Memorandum does not offer to

sell or ask for offers to buy any of the securities in any
jurisdiction where it is unlawful, where the person
making the offer is not qualified to do so, or to any
person who cannot legally be offered the securities.
The information in this Offering Memorandum

is current only as of the date on cover page, and may
€170,000,000
change after that date. For any time after the cover date
of this Offering Memorandum, we do not represent that
our affairs or the affairs of the Group are the same as
described or that the information in this Offering
Memorandum is correct — nor do we imply those
things by delivering this Offering Memorandum or
selling securities to you.
Zlomrex International
TABLE OF CONTENTS Finance S.A.
Page
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Unaudited Pro Forma Consolidated Financial
Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 8 1⁄ 2% Senior Secured Notes
Management’s Discussion and Analysis of
Financial Condition and Results of Operations . . 48 due 2014
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Guaranteed on a senior basis by
Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . 96 Złomrex S.A. and certain of its
Related Party Transactions . . . . . . . . . . . . . . . . . . . . 97 subsidiaries
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Description of Other Indebtedness . . . . . . . . . . . . . . 103
Description of the Notes . . . . . . . . . . . . . . . . . . . . . . 107
Book-Entry, Delivery and Form . . . . . . . . . . . . . . . . 161
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Notice to Investors . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Independent Reporting Auditors . . . . . . . . . . . . . . . .
Where You Can Find More Information . . . . . . . . . .
177
177
Deutsche Bank
Listing and General Information . . . . . . . . . . . . . . . . 178
Index to Consolidated Financial Statements . . . . . . F-1
January 23, 2007

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LISTING PARTICULARS NOT FOR GENERAL CIRCULATION

IN THE UNITED STATES

Zlomrex International Finance S.A.

Price: 100% plus accrued interest from the issue date.

The date of these Listing Particulars is January 26, 2007.

Zlomrex International Finance S.A.

Price: 100% plus accrued interest from the issue date.

NOTICE PURSUANT TO TREASURY CIRCULAR 230

NOTICE TO POLISH INVESTORS

NOTICE TO NEW HAMPSHIRE RESIDENTS

Š increasing consolidation among our customers;

Š current and future acquisitions, partnerships and joint ventures;

Š changes in international, legal, administrative or economic conditions; and

INDUSTRY AND MARKET DATA

Zloty per Euro

Š Semi-finished products segment. We sold approximately 172,000 tonnes of semi-finished steel

Our Segments and Products

Planned Consolidation of Centrostal Operations

€35 million (equivalent)

Scrap Division(3) Other Division(4)

100.0% €170 million 8½%

HSW-Huta Stali 100.0%

voestalpine 100.0% 100.0%

voestalpine 100.0% 51.0% voestalpine

Š pay dividends on, redeem or repurchase our capital stock or make

Š create certain liens;

Š enter into agreements that restrict the subsidiaries’ ability to pay

Š issue or sell capital stock of restricted subsidiaries;

Š enter into sale and leaseback transactions;

Š consolidate, merge or transfer all or substantially all of the

Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . (8.9) (17.0) (4.3) (13.8) (19.9) (5.0)

(1) Represents margin on intersegment sales.

Selected cash flow data

Year ended Nine months ended

September 30, 2006

Risks related to our Business

Our growth strategy through acquisitions exposes us to numerous risks.

Increases in our cost base may erode our profit margins.

Our business may be adversely affected by exchange rate fluctuations.

Risks Related to Austrian Acquisition

The terms of our indebtedness will restrict our operating flexibility.

You may face a foreign exchange risk by investing in the Notes.

Judicial reorganization or liquidation proceedings

Void and voidable transactions

Š the accrual of interest on the debtor’s debts is suspended

Payments under the Guarantees may be subject to Polish withholding tax.

Transfer of the Notes will be subject to certain restrictions.

Foreign judgments may not be enforceable against us.

Revolving Credit Facilities

The Austrian Acquisition

Source and Uses of Funds

Sources of Funds(1) Uses of Funds(1)

Operating profit before

Financial income . . . . . . . 5.3 .05 5.4 — 3.6 — 9.0

Equity holders of the

Balance sheet data

Total equity . . . . . . . . . . . . . . . 389.3 — — 11.5 161.9 (157.1) 405.5

Income tax expense . . . . . . . (20.9) (1.7) .1 .6 (11.2) 7.3 (25.5)

Planned Consolidation of Centrostal Operations

Summary of Major Acquisitions

Major acquisitions since 2003

Funds granted by the European Union

Continuous cost cutting