Tesla Liptovsk Hr dok by alicejenny

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									Annual Report 2006
                                         Contents




Evaluation of the Year 2006                         3
Identification Data                                 9
Company’s Organization Chart                        10
Quality Management System                           11
Company’s Production Profile                        12
Marketing Realization According to Territories      13
Overviews                                           15
Balance Sheet                                       20
Profit and Loss Account                             25
Auditor’s Report                                    27
Remarks to Financial Statements                     29
Cash Flow Statement                                 48
Business Objective for 2007                         50
Development of employees from ESF                   54




  2                                                      Liptovský Hrádok a.s.
                                        Evaluation of the Year 2006



Report of Company’s Board of Directors on Economic Results and Property
Status in the Year 2006
In the year 2006 Company’s Board of Directors set out on a way to financial and economic recovery of the Company due to
adoption and realization of the project of assets reclassification and on a way to transformation of Company’s culture by means of
preparation and definition of main areas and goals for implementation of principles of new form of organizing the work, i.e. team
structure, then by means of definition and subsequent application of principles of 5S, TPM, autonomous quality, autonomous
maintenance as well as via defining and adopting principles and rules of Company’s culture. Due to defining the position of
customers’ oriented philosophy of the Company inwards, i.e. to its employees, between particular departments and sections to each
other as well as outwards, i.e. to its suppliers, customers and the others in its environment, the Board of Directors gave a clear
signal, that its ambition to create conditions for transformation of the Company on all levels in the modern market environment and
to push them through into the daily activity of individuals and through them into the activity of the whole company is indubitable
and feasible. All these processes in connection with constant effort to improve the personal quality in all managing and executive
job positions are directed only at the same aim: to build up a company of worldwide class in conditions of TESLA Liptovský
Hrádok.
Simultaneously with changes in the area of company’s culture and internal organization, the process of improvement and betterment
of Quality Management System in accordance with ISO 9001:2000 as well as Environment Management System in accordance
with ISO 14001:2004 continued due to the supervisory audit carried out in the course of December in 2006. Certification of
principles of Quality Management System and Environment Management as a part of strategic goals directed towards creation of a
customers’ oriented company is a positive signal for our customers and a guarantee of our respectable approach to fulfillment of
their requirements as well as to requirements for working up a modern, partnering business cooperation opened to each other.
The year 2006 was a breakthrough from the point of view of subsequent stabilization of volumes of revenues from sales of own
products above the level of 30.0 Mil. SKK per month, whereby even in months from September till December – in spite of
distinctly negative influence of strengthened Slovakian currency towards EUR – the Company managed to maintain this trend
started in March. The average volume of revenues from sales per month in 2006 constituted 33.9 Mil. SKK in total, whereby the
average monthly level of revenues from sales for own products only reached 30.9 Mil. SKK.
In 2006 economic results were achieved in quantitative indicators acknowledging the maintenance of moderate growth trend which
directly refers to previous periods. The increase of 9.3% in revenues from sales in spite of constant strengthening the rate of
exchange of SKK – EUR gives evidence of growth possibilities and strengthening the market position of the Company among
processing entities. A significant share in this result was increase in revenues from sales of Company’s electrical engineering
products, where in comparison with the year 2005 the increase in the area of assembly and of PCB production constituted 3.5% and
27.2% accordingly, while revenues from sales of metal part production achieved relatively lower increase of only 3.8% and
revenues from sales of telecommunication systems increased only by 1.8%. However ambitions, especially in the area of
telecommunications, were significantly higher. But the critical problem was and remains a technical preparedness of TeslaPhonet
systems for application particularly for users requiring a larger range of superstructure system functions used. Despite exceeding the
last year indicators in revenues from metal part production and electrical engineering production the planned tasks were not
fulfilled in any of production branches. Failures in revenues from sales in comparison with the business objective in metal part
production (-63.1 Mil. SKK), in electrical engineering production and assembly (-15.0 Mil. SKK) and in telecommunication
production (-41.2 Mil. SKK) together with moderate exceeding of planned revenues from sales of services and merchandise (+2.8
Mil. SKK) causes that the plan of revenues from sales was fulfilled only for 77.7%. The volume of export constitutes 52.6 % from
total revenues from sales of own products.




               Liptovský Hrádok a.s.                                                                         3
                                                 Evaluation of the Year 2006
In comparison with the previous year it is a decrease by 15 percentage points.
The most important for this change was the fact of growth in revenues from sales to inland customers in electrical
engineering assembly as well as the strengthening of exchange rate of SKK to EUR with impact of general decrease of
revenues from sales in EUR.

Financially represented the revenues achieved from sales of own products constitute the volume of 370,147 Th. SKK, the
revenues from sales of services and merchandise constitute the volume of 37,001 Th. SKK. However possibilities for
increase of sales in metal part production were significantly higher. Due to order backlogs there were ensured volumes
exceeding the present capacity and organization abilities of operation departments. Further factor causing the non-fulfillment
of planned volumes of sales was insufficient realization of telecommunication products, where expectations concerning sales
of TeslaPhonet systems were not met even by 25%. It was partly caused by overestimating the technical preparedness of
systems for introduction into severe operation, by extending dates and terms for removal and complete solution of
shortcomings found out in particular complementary functions, by subsequent current detection of further technical
restrictions in case of mass implementation of systems and not least by qualitative level of personal equipment in
departments for sales and sales promotion of telecommunication devices. As to the area of revenues from sales of products
from electrical engineering assembly, the basic dominating factor of non-fulfillment of planned volumes of sales was lack of
order backlogs meeting requirements for adhering to parameters of effective sales. The existing portfolio of customers
occupies available capacities during one shift by its requirements for production, in case of emergency need the use of
capacities was operatively ensured by prolonged and extra shifts. Consolidation of capacities by technology of lead-free
soldering in the middle of 2006 extended possibilities of increasing this level of using capacities towards the trend which
ensures observance of even the strictest environmental requirements for this type of production.

Decrease in revenues from sales of services by 9.1 % between the years (financially presented by 3.3 Mil. SKK) is caused by
termination of the lease agreement with MOLTES in February 2006 and by its not-full-valued substituting by means of sales
arising from the lease agreement with Eltek Energy Slovakia as well as by opening valid and previously confirmed
contractual relations concerning deliveries of services for the Army of SR in a second half of 2006, whereby the volume of
services was increased by 7 % by comparison between the years.

As to basic qualitative indicators, i.e. volume of pretax profit, added value and value-added labor productivity, expectations
set out in the Business Objective was not fulfilled. The Company’s economic result for the year 2006 is the loss in the
amount of 47,214 Mil. SKK, while the assumption in the Business Objective has laid down to achieve the profit in the
amount of 24.1 Mil. SKK. The important share in this result had the process of implementing the project of reclassification
of Company’s assets, where due to transferring the long-term debt only there was made a book entry of the loss in the
amount of 38.925 Mil. SKK. The positive influence upon the stated economic result in the amount of 13.6 Mil. SKK was
exerted by making charge for sale of immovable property to Eltek Energy Slovakia and sale of further movable
property (steel and iron scrap, low-value tangible property, personal cars).

From the viewpoint of structure of the achieved economic result, the income from economic activity constitutes the loss of –
44.097 Mil. SKK, the income from financial activity constitutes the loss of –2.853 Mil. SKK and the income from
extraordinary activity constitutes the profit of +4 Th. SKK. A vehement consolidation of exchange rate of SKK to EUR in
the last four months in 2006 caused an increase of exchange rate losses which were not such an important item exerting
influence upon financial profit formation in the previous course of the year. At the same time the long-term trend of
exchange rate development was in accordance with expectations in the Business Objective: the parity level of 37.50 SKK
per 1 EUR, near which the rate of exchange oscillated till the half of September 2006, was in accordance with parameters of
BO. The partial elimination of exchange rate incidences, especially in case of receivables payable within 30 and more days,
was ensured by factoring of selected receivables. From the viewpoint of impact on economy, the opposite influence, i.e.
positive one was exerted by exchange rate development of SKK to USD, where in the course of the year 2006 its
appraisement by 15.7% was carried out and in recalculating the liability on the bank credit from Cidel Bank by 31 December
2006 there was quoted a exchange rate profit in the amount of 3.421 Th. SKK. The total balance of exchange rate profits and
losses for the whole year 2006 constitutes the value of +984 Th. SKK, while the Business Objective supposed the loss on
the level of –1.0 Mil. SKK.




              4                                                                                        Liptovský Hrádok a.s.
                                     Evaluation of the Year 2006
Together with the amount of outstanding loss from previous years kept in accounting books in full as the amount of
172.8 Mil. SKK, the total loss from the Company’s economy incl. the loss shown for the fiscal year 2006
constitutes the sum of 220.0 Mil. SKK. In view of important influence of this fact upon judging the total financial
standing of the Company on the side of partner financial institutions and commercial companies, the Company’s
Board of Directors proposes to solve it by reduction of basic capital in a form of diminution in value of shares
issued.
In the area of formation and consumption of expenses the Company ensured crucial expenses items in accordance
with the plan. In dependence on the volume of revenues from sales of own products the material expenses was
drawn in accordance with normative tasks planned, where its moderate overdrawal (+2.43% of total consumption)
was influenced due to inevitable correction of non-conformity products as well as by change of structure in
production assortment and parameters. In the matter of energy consumption the overdrawal was caused especially
in the item of heat energy, where in comparison with original assumptions worked into the Business Objective the
supplier did not start production of a medium from secondary raw materials, i.e. from wood chips, but from the
beginning of the heating season 2006/2007 he continued energy production under present conditions with impact on
unit price of 1GJ. Savings in the personnel expenses item depends directly on the lower level of revenues from
sales, where the total number of employees in the average recalculated condition was lower by 96 persons in
comparison with the planned condition. The important item, where the real condition exceeds the planned level, is
depreciation expense of tangible and intangible fixed assets, in which especially due to carrying out the leaseback
of technologies in the 1st quarter 2006 the additions to depreciation were higher by 3.0 Mil. SKK till the end of the
year and due to inclusion of assets (mainly SW and HW) by 31 December 2006 there were carried out
depreciation of ca 2.1 Mil. SKK. In comparison with planned values the difference exists also in the item Other
Operating Expenses, where expenses for material consumption were accounted in the amount of 5.1 Mil. SKK due
to additions to provisions for dubious inventory in 2005.


The lower formation of added value by 72,890 Th. SKK in comparison with the Business Objective constitutes the
fulfillment of BO to 62.6% in this area, at the same time on the basis of this development even the planned level of
value-added labor productivity was not achieved. Although the Business Objective supposed to achieve it in the
amount of 416,239 SKK per employee, in accordance with the actual facts there was achieved a level of 352,610
SKK per employee. However compared between the years this result constitutes the increase by 35.7% because in
the previous year 2005 the value-added labor productivity constituted 259,889 SKK per employee. At the same
time the re-counted number of employees was lower by 96 persons than it was requested by the plan and by 31
December 2006 the average re-counted number was 372 persons in total. The labor productivity in sales was also
lower by 24,533 SKK per employee in comparison with the planned values, it reached the level of 1,094,484
SKK. Via comparison between the years we see 24.4% increase in this indicator as well, because in 2005 the labor
productivity in sales was 880,156 SKK per employee.


The total value of Company’s assets by 31 December 2006 is lower by 33.1 Mil. SKK in comparison with the last
year, where there are shown losses in long-term intangible fixed assets in the amount of –5.0 Th. SKK (in
software: +27.122 Th. SKK due to inclusion of acquired intangible assets of –32.164 Th. SKK), further losses of
long-term tangible assets of –6.352 Th. SKK (lands: +475 Th. SKK, building constructions: –7.255 Th. SKK,
machinery and equipment: +9.645 Th. SKK, due to inclusion of acquired long-time assets: –9.190 Th. SKK), losses
of long-term financial assets in the amount of -200 Th. SKK due to depreciation of shares in TercioM s.r.o. because
of its erasure from the companies’ register by the District Court in Banska Bystrica. The further influence on
reduction of value of Company’s assets was exerted by decrease of short-term assets by –19.869 Th. SKK in total,
where inventory between the years increased by +15.127 Th. SKK, long-term receivables decreased by –1.14 Mil.
SKK, short-term receivables decreased by –34.501 Th. SKK and funds in bank accounts and in cash were
increased between the years by +645 Th. SKK. The last influence on reduction of Company’s assets is exerted by
time differentiation accounts which decreased by –1.709 Th. SKK between the years.

               Liptovský Hrádok a.s.                                                               5
                                            Evaluation of the Year 2006
 The coverage of Company’s assets by capital showed structural changes, when the share of equity capital in
total capital decreased from 56.25% in 2005 to 48.55% in2006, the share of foreign capital – both of long-term
and short-term capital – increased accordingly from 10.58% to 15.68% and from 32.81% to 33.64%, at the
same time the share of other liabilities in total capital remained the lowest: - 0.36% in 2005 and 2.13% in 2006.
This development reflects a reduction of owner’s equity due to adjustments to Company’s assets in 2005 (to
receivables and inventory), due to cumulation of losses shown from Company’s economy as well as due to a
moderate increase of payables and influence of re-structurization of bank credits by means of reduction of
short-term credits in favor of medium-term bank credits.

For its business the Company used also foreign sources gained for the project financing from funds of
European Union and the national budget of Slovak republic. Continuation of the project of further education of
Company’s employees, in which the gamut of Company’s employees took part on all levels of management
thanks to financial means of European Social Fund (ESF), was currently supported by drawing external
sources for financing in the amount of 1.183 Mil. SKK and by 40% co-financing from own Company’s funds.
In the year 2006 individual training programs were concentrated mainly on gaining skills necessary for
mastering the team organization structure, on verifying and selecting suitable typologies of managers, on
meeting new requirements at the basic management stage and on creating the new company’s culture.

The further project, for which the Company drew external financial means, is telecommunication development,
where in accordance with the flowchart of the project in cooperation with Technical University in Košice there
was completed a two year cycle of works connected with the development of telecommunication system under
the name VoiceNet05. The current financing of the part of expenses spent upon the project from the funds of
Science and Research Agency of Slovak republic was accounted in the amount of 735 Th. SKK for the year
2006

The last realized project – expenses on this project are partly covered by external sources gained through
Slovak Energetic Agency from the support project de minimis (co-financing in the amount of 100,000 EUR)
within SOP Industry and Services – was the project of reconstruction of heating and regulation of heat-
exchanger stations with the total budget of 7.265 Th. SKK. The project was completed by 12 May 2006 after
technical tests and official approval. Then in accordance with conditions and terms of the project there was
elaborated an application for repaying the share of legitimate expenses in the amount of 3.845 Th. SKK, the
commission check was carried out by the implementing agency SEA directly in the Company, but financial
means were not remitted till the end of the year 2006.

In 2006 for financing of operating needs there were used methods of combined credit financing of operation:
via short-term bank overdraft from VÚB by 31 December 2006 in the amount of 15.0 Mil. SKK, medium-term
time credits for receivables to Dexia banka Slovensko by 31 December 2006 in the amounts of 12.947 Th.
SKK and 14.0 Mil. SKK and via foreign credit from Cidel Bank Barbados, where conditions for credit
repayment in the course of the year 2006 were changed through the Annex to the Loan Contract from short-
term to medium-term loan for operations. Its volume reaches the amount of 600 Th. USD by 31 December
2006, what constitutes 15.748 Th. SKK at the valid rate of exchange. The support of financing of operating
needs is the factoring of receivables through the company ČSOB Factoring for selected range of receivables,
the financed volume of which was 174,233.90 EUR by 31 December 2006, what constitutes 4.82 Mil. SKK at
the valid rate of exchange and 80% financing of receivables.

The part of foreign bank sources are balances of medium-term time credits by 31 December 2006 from VÚB
for settlement of the part of expenses connected with purchase of the license in the amount of 4.92 Mil. SKK
with maturity in August 2008 and for realization of the project “Reconstruction of Heating” from Dexia banka
in the amount of 2.625 Th. SKK with maturity in July 2008.



            6                                                                                Liptovský Hrádok a.s.
                                   Evaluation of the Year 2006


In ensuring sources for financing of development needs there were used services of leasing companies ČSOB
Leasing (a leaseback for the surface finish line with powder painting and a lease for purchase of the personal
car AUDI), CAC Leasing (a leaseback for CNC punching and CNC press braking technologies from Trumpf),
KOFIS Leasing (CNC bending technology CIDAN) and PSA Finance (a lease for the personal automobile
Peugeot). The amount of outstanding installments by 31 December 2006 constitutes 22.552 Th. SKK divided in
contractual relations based on EUR currency with the outstanding amount of 323.9 Th. EUR and in contractual
relations based on SKK currency with the outstanding amount of 11.352 Th. SKK.

The Company fulfilled its tasks with less number of employees than planned one. In 2006 the average re-
counted number of employees reached the above-mentioned 372 persons, what is by 96 persons less than it was
planned; that is with average monthly earning of 16,670 SKK, what is a lower level by 211 SKK (by 1.24%) in
comparison with the Business, however compared between the years the earning is increased by 2,254 SKK, i.e.
by 15.64% relatively. The volume of personnel expenses in comparison with the plan was by 29.097 Th. SKK
lower, however between the years it is by 1.46% higher and by 1.565 Mil. SKK absolutely. In the structure
according to particular categories the downward trend continues with regard to employees of THP (technique
and economy area) category (from 146 persons in 2003, 111 persons in 2004, 105 persons in 2005, to 93
persons filed by 31 December 2006); the trend moderately falls with respect to the number of employees of Rr
(workers) category ( from 78 persons in 2003, 72 persons in 2004 and 2005 to 70 persons by 31 December
2006), at the same time the number of employees of Rj category is in direct proportion to the need of ensuring
the production in particular operating plants and periods of the year in dependence upon order
backlogs (decrease from 309 persons in 2003, 279 persons in 2004, 246 persons in 2005, to 209 persons by 31
December 2006). The entered trend of ensuring customers’ requirements by more effective use of available
machinery and personnel capacities, mobilization of reserves and by increasing involvement in creation of
added value is documented also in this development of number of employees.

From the viewpoint of fulfillment of Company’s obligations towards institutions of social and health insurance
system the positive trend continued also in the year 2006 with observance of prescribed terms regulated by the
law in paying particular types and kinds of premiums. The defined penalization recorded in books for premiums
paid with delay in previous periods (1996–2003) is solved by the Board of Directors by means of applying for
remission of penalties. The final solution as well as a way, methods, total amount and a form of settlement will
depend on a prepared version of the state support scheme for settlement of receivables of Social Insurance
Office, which is going to be realized in 2007.


                                                                       Company’s Board of Directors




             Liptovský Hrádok a.s.                                                              7
    TESLA Liptovský Hrádok a.s.




8                                 Liptovský Hrádok a.s.
                      Identification data




Commercial name:         TESLA Liptovský Hrádok a.s.
Registered office:       Pálenica 53/79
                         033 17 Liptovský Hrádok
CRN:                     00009687
TRN:                     2020428729
VAT RN:                  SK 2020428729
Date of establishment:30 November 1990
Date of record:          1 January 1991
Legal form:              Joint-Stock Company
Recorded in:             Company´s Register
                         District Court in Žilina,
                         section: Sa, inset No: 9/L




       Liptovský Hrádok a.s.                          9
     Company´s Organization Chart




10                                  Liptovský Hrádok a.s.
                                            Quality Management System

                                    Integrated Management System
 For more than ten years in accordance with its strategic intentions TESLA Liptovský Hrádok a.s. has been applying the Quality
Management System in conformity with requirements of the valid international standard EN ISO 9001 : 2000, which was
extended by certification of the Environment Management System according to EN ISO 14 001 : 2004 in the year 2005.

In accordance with the declared quality and environmental policy the management of the Company creates conditions and
ensures sources for further improvement of the system directed at fulfillment of customer’s requirements and at assurance of
general development of the Company.

Exercise of process management, implementation of team structures and further forms of improvement are a basic task of the
Company’s management with the final aim to involve each Company’s employee actively in the system applied and thereby to
achieve fulfillment of the given tasks and satisfaction of customers.

Demandingness of these intentions were confirmed by results of the supervisory audit of the management system which was
carried out by the certification company SKQS Žilina.

The effective certified Company’s management system orientated towards customers creates basic presuppositions for
guaranteeing quality of our products, customer’s satisfaction and development of the Company.

Environmental behavior of the Company is an inevitable condition not only towards own employees and environment, but at
present time it is also a preferred requirement of our customers.

Improvement of the integrated management system of the Company is a priority task of each employee of the Company with
the aim to satisfy all parties engaged.




                                                                                                        Jan Borsik
                                                                                                        Quality Manager




                 Liptovský Hrádok a.s.                                                                         11
                                         Company´s Production Profile

TELECOMMUNICATION DEVICES

 Deliveries of ISDN communication systems via Slovak Telecom, a.s.
 Deliveries of ISDN communication systems for commercial market in SR and CzR
 Made-to-order solutions for Defense Department of SR and Home Office of SR
 Made-to-order solutions of terminal devices of communication systems for Czech republic

SUBCONTRACTING PRODUCTION

Metal Part Production

 Precise sheet metal processing – forming of metal sheets on presses, CNC milling, punching and bending
 Production of parts by cutting, welding, turning
 Forming of plastic parts by injection moulding
 Surface treatment by powder painting on the continuous line
 Eloxal coating and titanium coating of aluminum parts
 Zinc coating

Production of Printed Circuit Boards for Leaded Component and SMD Assembly

 Single-sided PCBs
 Both-sided and multi-layer PCBs up to 6 layers
 Guaranteed accuracy class 4 and 5 with minimal diameter of PTH 0.4 mm and non-soldering mask applied by
photosensitive screen print
 Outer contours cut, scored, stamped or milled
 Gold plated edge connector fingers up to 15 mm
 Elaboration of technological photo documentation from GERBER data sent and 100% electrical testing incl.
SMT
 UL certificate for PCBs – Underwrites Laboratories Inc., USA
Passivating of PCBs


Final Assembly

 Component placement on rigid or flexible PCBs by both-sided SMT on the full automated line followed by
reflowing or soldering
 Placement of leaded component on PCBs followed by tin wave soldering, final assembly and testing
 Debugging and testing of plug-in units for analogue and digital telephone exchanges
 Assembly and testing of final projects
 Assembly of backup power supply units LP 11 of 3 up to 10 k VA for markets in Europe and USA and three-
phase supply units of 5 up to 10 k VA
 Assembly and testing of backup power supply units LP 31 of 8, 10, 15, and 20 k VA
 Production of cabling
 Realization of guarantee and after-guarantee repairs




             12                                                                             Liptovský Hrádok a.s.
                                     Market realization according to territories


Important outward deliveries

GERMANY
 Dewert Antriebsystems GmbH – Kirchlegen
 Freudenberg Mektec GmbH – Weinheim - projekty pre fy. Nokia, Siemens, Bosch
 Hengstler GmbH – Aldingen
 Rose Elektronic GmbH – Porta Westfalica
 AEG SVS Power Supply Systems GmbH - Warstein

BENELUX
General Desing and Manufacturing Electronics bvba – Herentals, Belgicko
 Udenco – Holandsko

SWITZERLAND
 Mountair – Kreuzlinger

HUNGARY
 Carrier CR Hungary Ltd– Phoenix – Jaszároszakáss
 Phoenix Mecano - Kecskemet

DEMNARK
 Triax – Hornsyld
 Styromatic Electronic A/S - Århus

SWEDEN
 PEGES i Färila AB - Färila
 CABO S.B.C.T. HB – Stockholm

FRANCE
 JABIL CIRCUIT SAS- Brest
 Alcatel Business Systems – Illkirch Cedex
 Créations André Renault – Saint Gildas des Bois
 Artem – Paris
 Saft power systems - Tours


CZECH REPUBLIC
 IRCR Manufacturing – Uničov
 EUROTEC – Uherský Ostroh
 Gatema – Boskovice
 2N – Praha
 Connect – Praha
 Prison Service of Czech republuc




             Liptovský Hrádok a.s.                                                 13
                             Territorial Structure of sales of own products

Important inward deliveries
 MKEM - Stará Ľubovňa
 Protherm - Skalica
 Eltek Energy – Liptovský Hrádok       Target Country / Share                  thous.SKK
 Ministerstvo obrany SR
 Ministerstvo vnútra SR                Slovakia            48,9%                  180 945
 Slovak Telecom, a.s. – Bratislava     Germany             21,2%                   78 334
Tesla Stropkov – Stropkov
 Hengstler – Kežmarok                  Czech republic     10,6%                    39 148
 N-CODE – Bratislava                   France                9,3%                  34 324
 OVP - Trstená
 Emerson – Nové Mesto nad Váhom        Switzerland         4,9%                    18 197
 Embraco – Spišská Nová Ves            Belgium              3,4%                   12 592
 Punch – Námestovo
 SESO Vráble – Vráble                  Hungary             1,1%                     4 232
 Letecké opravovne – Banská Bystrica   Denmark               0,5%                   1 891
 DUEL – Námestovo
 ABB ELEKTRO – Bratislava              Sweden                0,1%                     484
 SIIX - Nitra
 Vönsch - Brezno
 ERS – Bratislava
 IMCO Power – Bratislava

                   TERRITORIAL STRUCTURE OF SALES OF OWN PRODUCTS - 2006       Slovakia
                                                                               48,9%

                                                                               Germany
                                                                               21,2%

                                                                               Czech
                                                                               republic
                                                                               10,6%
                                                                               France
                                                                               9,3%

                                                                               Switzerland
                                                                               4,9%

                                                                               Belgium
                                                                               3,4%

                                                                               Hungary
                                                                               1,1%

                                                                               Denmark
                                                                               0,5%

                                                                               Sweden
                                                                               0,1%


    14                                                                     Liptovský Hrádok a.s.
                                          Overviews

                                                                              2002         2003              2004              2005         2006
                      Sales in total                                           279 270      318 967           363 979           372 306      407 148
                      Sales of own products                                    235 157      272 704           324 246           334 005      370 147
                      Sales of services                                         43 942       42 894            37 816            36 586       33 242
                      Sales of Merchandise                                         171        3 369             1 917             1 715        3 759
                    SALES IN TOTAL AND IN THE STRUCTURE FOR 2002 - 2006
    IN TH. SKK



     450 000




     400 000




     350 000




     300 000




     250 000




     200 000




     150 000




     100 000




      50 000




           0
                                                                                                                                           YAER
                     2002                 2003                         2004                   2005                      2006




Sales in total          Sales of own products                          Sales of services                      Sales of merchandise




                                                                                  2002          2003           2004             2005       2006
                     Production of goods in internal net book value                 216 676      298 352        323 090          353 459    330 246
                     Telecommunication equipmnet                                     21 245       14 671         12 918           10 026     11 945
                     Made-to-order production                                       195 431      283 681        310 172          343 433    318 301


                                                 PRODUCTION OF GOODS IN INTERNAL NET BOOK VALUE FOR 2002 - 2006

                               TH. SKK


                             400 000


                             350 000


                             300 000


                             250 000


                             200 000


                             150 000


                             100 000


                              50 000


                                  0
                                          2002                  2003                2004              2005                 2006
                                                                                                                                              YEAR
                      Telecommunication equipment
                      Made-to-order production



                 Liptovský Hrádok a.s.                                                                                            15
                                                                                 Overviews

                                              2002            2003           2004           2005          2006
Inventory in total                             59 458          66 986         83 354         49 464        64 591
Material                                       26 136          26 258         36 036         20 747        34 533
Work-in-progress and semi-finished goods       25 171          21 938         33 921         17 292        17 062
Finished goods                                  7 741          18 482         12 974         11 417        12 996
                                 DEVELOPMENT AND STRUCTURE OF INVENTORY IN                           2002 - 2006
         TH.SKK

         90 000


         80 000


         70 000


         60 000


         50 000


         40 000


         30 000


         20 000


         10 000


              0
                            2002                 2003                    2004                    2005                2006            A
                                                                                                                                   YE R


         Inventory in total           Material            Work-in-progress and semi-finished goods                    Finished goods




                                             2002          2003            2004            2005          2006
 Employees (calculated number)                   494           533             462             423           372
 THP (engineersand clerks)                       180           146             111             105            93
 Workers                                         314           387             351             318           279


                                                        EMPLOYEES (CALCULATED PERSONS) 2002 - 2006
                  Number of persons



                           600



                           500



                           400



                           300



                           200



                           100



                             0
                                      2002                  2003                  2004                  2005                2006
                  Employees (calculated number)                                                                                           YEAR


                  Engineers and clerks
                  Workers



              16                                                                                                   Liptovský Hrádok a.s.
                                        Overviews

                                                                           2002           2003          2004           2005          2006
                         Labor productivity from production of goods        438 615        559 760       699 329        835 600       887 758
                         Labor productivity from sales                      565 320        598 437       787 833        880 156     1 094 484
                         Labor productivity from added value                233 563        217 702       292 128        259 889       352 610

1 200 000                        LABOR PRODUCTIVITY INDICATORS IN 2002 - 2006




1 000 000




 800 000




 600 000




 400 000




 200 000




       0
                  2002                   2003                2004                     2005                      2006   YEAR
                                 Labor productivity from production of goods
                                 Labor productivity from sales
                                 Labor productivity from added value



                                                                       2002          2003            2004          2005            2006
                    Expences in total                                   353 769       419 152         477 593       547 640         602 013
                    Revenues                                            348 983       421 100         482 396       500 555         554 799
                    Profit. Loss                                         -4 786         1 948           4 803       -47 085         -47 214

                                           EXPENCES, REVENUES AND PROFIT IN       2002 - 2006
                TH.SKK




               700 000

               600 000

               500 000

               400 000

               300 000

               200 000

               100 000

                         0

              -100 000
                                 2002            2003             2004                 2005               2006                    YEAR



            Expences in total                    Revenues                    Profit, loss




              Liptovský Hrádok a.s.                                                                                    17
                                   Overviews




         STRUCTURE OF CAPITAL BY 31 DECEMBER 2006




                                       15,68%




     48,55%




                                                33,64%
                          2,13%




                                     Own capital                  180 085
                                     Long-term foreign capital     58 166
                                     Short-term foreign capital    124 775
                                     Other liabilities             7 907




18                                                       Liptovský Hrádok a.s.
               Overviews



       STRUCTURE OF ASSETS BY 31 DECEMBER 2006




                             1,06%
          23,29%




                                                 53,30%
 17,41%




            4,93%




                            Long-term intangible and tangible assets:197 725

                            Long.term financial assets: 18 300

                            Inventory: 64 591

                            Receivables: 86 389

                            Financial accounts, deferring: 3 929




Liptovský Hrádok a.s.                                         19
                                                                             Balance sheet


Row indicat.                         ASSETS SIDE               number of                             in current       previous
                                                                                     accounting period
                                                                   account     gross      correction     net           period
                                                                                                                        net
 A               b                           c                                   1              2           3            4
01                          Total assets                   02+03+32+62           950 720       579 787     370 933      404 078
02        A                 Receivables for subscription   353
                            for own equity capital
03        B                 Fixed assets                   04+13+23              783 564       567 539     216 025      227 592
04        B.I.              Long-term intangible
                            assets                         05 až 12              116 862        66 472      50 390       55 432


05        B.I. 1. Incorporation expenses                   B 011
                                                           K -071, 091
06                    2. Research and development          B 012
                         expenses
                                                           K -072, 091               16 794     16 794
07                    3. Software                          B 013
                                                           K -073, 091               99 564     49 174      50 390       23 268
08                    4. Valuable rights                   B 014
                                                           K -074, 091
09                    5. Goodwill                          B 015
                                                           K -075,091
10                        6 Other long-term                B 019, 01X
                            intangible assets              K-079,07X,091               504          504
     11                   7 Acquired long-term             B 041
                            intangible assets              K -093                                                        32 164
     12                   8 Advance payments for           B 051
                            long-term intangible assets    K-095
     13 B.II.               Long-term tangible assets      14 až 22
                                                                                 646 802       499 467     147 335      153 660
     14 B.II. 1. Lands                                     B 031
                                                           K -092                     9 796                  9 796           9 321
     15               2. Buildings                         B 021
                                                           K -081,-092           226 680      131 992       94 688      101 943
     16                3. Self-contained things in         B 022
                          possession and sets of           K -082,092
                          things in possession                                   383 033       340 980      42 053       32 408
     17              4. Perennial crops                    B 025
                                                           K -085,092
     18              5.     Breeding & draught             B 026
                            animals                        K -082,092
     19              6.     Other long-term tangible       B 029,02X,032
                            assets                         K-089,08X,092             26 495     26 495
     20              7.     Long-term tangible assets      B 042
                            being acquired                 K-094                       798                      798          9 988




                 20                                                                                     Liptovský Hrádok a.s.
                                                  Balance sheet

row      indicat.             ASSETS SIDE                 number of                           in current     previous
                                                                              accounting period
                                                              account   gross      correction     net           period
                                                                                                                 net
a           b                       c                                     1            2           3              4
    21          8.   Advance payments for             B 052
                     long-term tangible assets
                                                      K 095
    22          9.   Adjustments to acquired          B+ - 097
                     assets                           K+ - 098
    23 B.III.        Long-term financial assets
                                                      24 až 31                19 900    1 600      18 300         18 500
    24 B.III. 1. Securities and shares in             B 061
                 controlled legal entity
                                                      K -096                  18 000               18 000         18 200
    25           2. Securities and shares with        B 062
                    substantial influence in
                    companies
                                                      K -096
    26       3. Other long-term securieties           B 063
                and shares                            K -096                   1 900    1 600          300            300
    27       4. Loans to unit of account              B 066
                in consolidated whole                 K -096
    28       5. Other long-term financial             B 067, 069,06X
                assets                                K -096
    29       6. Loans with max. period of             B 066,067,06X
                repayment during one year             K -96
    30       7. Long-term financial assets            B 043
                being acquired                        K -96
    31       8. Advance payments for                  B 053
                Long-term financial assets            K -096
    32 C.       Short-term assets                     33+41+48+56         166 473      12 248     154 225        174 094
    33 C.I.     Inventory                             34 až 40             64 591                  64 591         49 464
    34 C.I. 1. Material                               B 112, 119,011X
                                                      K -191,19X              34 533               34 533         20 747
    35           2. Work-in-progress and              B 121, 122,12X
                    semi-finished goods               K -192, 193,19X         17 062               17 062         17 292
    36           3. Made-to-order production          B 12X
                    with assumed time of              K -192
                    termination more than
                    one year
    37           4. Products                          B 123
                                                      K -194                  12 996               12 996         11 417
    38           5. Animals                           B 124
                                                      K -195
    39           6. Merchandise                       B 132,13X,139
                                                      K -196,19X                                                         8
    40           7. Advance payments for              B 314
                    inventory                         K -391




                       Liptovský Hrádok a.s.                                                               21
                                                                      Balance sheet

          I                                                                                                  previous
                                                                                                              period
row       ndicat.                                       number of      in current accounting period             net
                                                         account      gross       correction     net
                             ASSETS SIDE

a             b                     c                                   1              2           3            4
     41 C.II.    Long-term receivables              42 ž 47                    10                       10          1 150
     42 C.II. 1. Receivables from                   B 311 až 315
                 commercial traffic                 K -391
     43           2. Receivables from controlled    B 351
                     and controlling legal entity
                                                    K -391
     44           3. Other receivables within       B 351
                     consolidated whole
                                                    K -391
     45           4. Receivables from partners,     B 354,355,358,
                     members and association        K -391
     46           5. Other receivables              B 335,375,378
                                                    K -391                     10                       10          70
     47        6. Deferred taxes receivables        481                                                          1 080
     48 C.III.    Short-term receivables            49 až 55                98 627     12 248      86 379      120 880
     49 C.III. 1. Receivables from                  B 311 až 315
                  commercial traffic                K -391                  94 105     11 590      82 515       52 222
     50        2. Receivables from controlled       B 351
                  and controlling legal entity
                                                    K -391
     51           3. Other receivables within       B 351
                     consolidated whole             K -391
     52           4. Receivables from partners,     B 354,355,358,
                     members and association        K -391
     53           5. Social security                B 336
                                                    K -391
     54           6. Taxes receivables              B 341,342,343,
                                                    345
                                                    K -391                   2 780                  2 780           4 135
     55           7. Other receivables              B 335,371-378
                                                    K -391                   1 742         658      1 084       64 523
     56 C.IV.     Financial accounts                57 up to 61              3 245                  3 245        2 600
     57 C.IV.1. Cash                                B 211,213,21X              100                    100          201
     58        2. Bank accounts                     B 221,22X,261            2 545                  2 545        1 799
     59        3. Bank accounts blocked             B 221X
                  for more than 1 year                                        600                      600           600
     60        4. Short-term financial assets       B 251,253,256-7
                                                    K -291,293
     61       5. Short-term financial assets        B 259
                 being acquired                     K -291
     62 D.       Time differentiation               63 + 64                   683                      683          2 392
     63 D.I .1. Deferred expenses                   B 381,382
                                                                              601                      601          2 310
     64           2. Accrued revenues               B 385
                                                                               82                       82            82
    888             CHECK NUMBER                    01 up to 64        3 802 197     2 319 148   1 483 049    1 613 920




       22                                                                                        Liptovský Hrádok a.s.
                                               Balance sheet


row        indicat.                   LIABILITIES SIDE                   number of   statement           statement
                                                                          account    in current         in previous
                                                                                     acc.period          acc.period
  a              b                             c                                         1                  2
      65                   Equity and payables                 66+86+116                     370 933         404 078
      66 A.                Equity                              67+71+78+82+85                180 085         227 299
      67 A.I.              Registered capital                  68 až 70                      398 900         398 900
      68 A.I. 1.           Registered capital                  411                           398 900         398 900
      69         2.        Own shares and business             /-/252
                           participations
      70          3.       Change of regist. Capital           -419
      71 A.II.             Capital funds                       72 až 77                           719             719
      72 A.II. 1.          Share premium                       412
      73          2.       Other capital funds                 413
      74          3.       Legal reserve fund from             417,418
                           contributions of capital
      75              4.   Gains or losses from
                           reval. of assets and payabl.        + - 414
      76              5.   Gains or losses from
                           investments                         + - 415                            719             719
      77              6.   Gains or losses from                +/-416
                           rev.by consolid.or separat.
      78 A.III.            Reatained earnings                  79 up to 81                        480             480
      79 A.III. 1.         Legal reserve fund                  421                                480             480
      80       2.          Indivisible fund                    422
      81       3.          Statutory and other funds
                                                               423,427,42X
      82 A.IV.        Trading income from
                      previous years                           83+84                         -172 800       -125 715
      83   A.IV.1.    Retaine earnings from
                      previous years                           428
      84        2.    Accumulated losses from
                      previous years                           /-/429                        -172 800       -125 715
      85   A.V.       Trading income from
                      current accounting period
                      01-/+67+71+78+82+86+116/                                               -47 214         -47 085
      86   B.         Payables                                 87+91+102+112                 182 941         175 332
      87   B.I.       Reserves                                 88 až 90                        4 114           2 109
      88   B.I. 1.    Legal reserves                           451
      89           2. Other long-term reserves
                                                               459,45X
      90              3. Short-term reserves                   323,32X,451,459,                4 114             2 109
      91 B.II.           Long-term payables                    92 až 101                      19 859            11 315




                     Liptovský Hrádok a.s.                                                         23
                                                              Balance sheet


row       indicat.                 LIABILITIES SIDE            number of        statement           statement
                                                                account         in current         in previous
                                                                                acc.period          acc.period
 a           b                              c                                       1                  2
     92 B.II. 1.        Long-term payables from         479
                        commercial traffic
     93            2.   Long-term non-invoiced
                        deliveries                      476
     94            3.   Long-term payables to cont-
                        rolled and controlling entity   471
     95            4.   Other long-term payables
                        within consolidated whole       471
     96            5.   Long-t. advances received       475
     97            6.   Long-term bills of exchange
                        to be paid                      478
     98            7.   Bonds issued                    473/-/255
     99            8.   Payables to social security     472                                  194             115
100             9.          Other long-term payables      474,479,472,373,377            17 575             8 029
101            10.           Deferred taxes liability   481                               2 090             3 171
 102 B.III.        Short-term payables                  103 up to 111                    93 875            83 527
 103 B.III. 1.     Commercial traffic                   321,322,324
                   payables                             325,475,478,479                  84 375            69 160
 104            2. Deliveries not invoiced              326,476                             160                68
 105            3. Payables to controlled and           361,471
                   controlling entity
 106            4. Other payables within                361,36X,
                   consolidated whole                   471,47X
 107            5. Payables to partners and             364 up to 368,398
                   association                          478,479
 108            6. Payables to employees                331,333,479,
                                                        33X                               5 537             5 527
 109               7. Social security payables
                                                        336,479                           3 158             2 891
 110               8. Taxes and subsidies
                      payables                          341 up to 347,34X                    645            1 149
 111               9. Other payables                    372,373,377,379,474                                 4 732
 112 B.IV.            Bank loans and
                      subsidies                         113 up to 115                    65 093            78 381
 113 B.IV.1.          Long-term bank loans
                                                        461                              38 307            19 231
 114         2.         Current bank loans              231,232,461,221                  26 723            59 032
 115         3.         Short-term emergency            241,249
                        loans                           473,-255                             63               118
 116 C.I.               Time differentiation            117 and 118                       7 907             1 447
 117 C.I. 1.            Accrued expenses
                                                        383
 118               2. Deferred revenues
                                                        384                               7 907             1 447
 999                    CHECK NUMBER                    65 up to 118                 1 523 039        1 661 950




24                                                                                      Liptovský Hrádok a.s.
                                                Profit and Loss Account

Indic.   TEXT                                               row        account                     fact of per.      fact of past
                                                                                                   under cons        period
I.       revenues from merchandise                                 1                       604               3 759                   1 715
A.       expenses for merchandise sold                             2                       504
                                                                                                             3 336               1 062
         trade margin                                              3                     r.01-02               423                 653
II.      production                                                4                r.05+06+07             402 467             384 502
II.1.    revenues from own products and services                   5                    601,602            403 389             370 591
   2.    changes in intraplant inventory                           6             (+ -)acc.gr. 61            -8 221              -8 597
   3.    capitalization                                            7                  acc.gr. 62             7 299              22 508
B.       production consumption                                    8                    r.09+10            280 980             275 222
B.1.     consumption of material, energy and other                 9             501 up to 503
         non-storable deliveries                                                                           241 860             226 591
B.2.     services                                                 10                  acc.gr.51             39 120              48 631
         added values                                             11                r.03+04-08             121 910             109 933
C.       personnel expenses                                       12              r.13 up to 16            109 103             107 538
C.1.     wages and salaries                                       13                   521,522              74 414                  73 178
C.2.     renumeration of board members                            14                       523               4 811                   4 428
C.3.     social security expenses                                 15              524,525,526               24 539                  23 682
C.4.     social expenses                                          16                   527,528               5 339                   6 250
D.       taxes and fees                                           17                  acc.gr.53              1 969                   1 524
E.       depreciation of long-t. intang. and tang.assets          18                       551              42 202                  29 801
III.     revenues from sales of long-t.assets and mat.            19                   641,642              12 995                  13 020
F.       net book value of long-term assets and                   20                   541,542
         material sold                                                                                       6 540                   2 462
IV.      Use and cancellation of reserves for revenues            21              652,654,655
         from econ.act. and KNBO origin accounting                                                           2 109                   3 613
G.       Additions to reserves for econ.activity and              22              552,554,555
         accounting for complex deffered expenses                                                            4 114                   2 118
V.       Accounting and cancellation of adjustments               23 657, 658, 659
         to revenues from economic activity                                                                 32 844                   4 334
H.       Additions to provisions to economic activity             24 557, 558, 559
         expenses                                                                                               36                  36 877
VI.      Other revenues from economic activity                    25              644-646,648               87 652                  81 887
I.       Other economic activity expenses                         26               543,5,6,8,9             137 643                  75 360
VII.     Transfer of revenues from economic activity              27                    (-)697
J.       Transfer of economic activity expenses                   28                    (-)597
         TRADING INCOME FROM ECONOMIC                             29         11-12-17-18+19-
         ACTIVITY                                                           20+21-22+23-24+
                                                                             25-26+(-)27-(-28)             -44 097              -42 893




                    Liptovský Hrádok a.s.                                                                                            25
                                                           Profit and Loss Account




Indic.     TEXT                                                  year    account                   fact of per.         fact of past
                                                                                                   under cons           period
VIII.      revenues from sales of securities and shares             30                      661                                        2 000
K.         securities a shares sold                                 31                      561                                          867
IX.        revenues from long-term financial assets                 32               r.33+34+35                   200                      0
    1.     revenues from securities and shares with                 33                      665
           subst.infl. in controlled entity and company
      2.   revenues from other long-term securities                 34                      665
           and shares                                                                                             200
      3.   revenues from other long-t. financial assets             35                       665
X.         revenues from short-term financial assets                36                       666
L.         short-term financial assets expences                     37                       566
XI.        revenues from revaluation of securities and                                       674
           revenues from derivation transactions                    38                  664,667
M.         Expenses for revaluation of securieties and                                       574
           for derivation transactions                              39                  564,567
XII.       revenues interests                                       40                       662             5 938                     7 120
N.         expenses interests                                       41                       562             6 770                     5 997
XIII.      exchange rate gains                                      42                       663             6 746                     2 364
O.         exchange rate losses                                     43                       563             5 762                     7 255
XIV.       Other revenues from financial activity                   44                       668                81
P.         Other financial activity expenses                        45                  568,569              3 286                     1 553
XV.        use and cancellation of reserves for revenues                                  (-)698
           from financial activity                                  46                       674
Q.         Additions to reserves for financial activity             47                       574
XVI.       accounting and cancellation of adjustments
           to revenues from financial activity                      48                      679
R.         additions to provisions to financial activity
           expenses                                                 49                      579
XVII.      transfer of financial revenues                           50                      698
S.         transfer of financial expenses                           51                      598
           TRADING INCOME FROM FINANCIAL                            52         30-31+32+36-37+
           ACTIVITY                                                            38-39+40-41+42-
                                                                          43+44-45+46-47+48-49              -2 853                     -4 188
T.         income taxes on ordinary income                          53                    54+55                268
      1.   due                                                      54                  591,595                268
      2.   deferred                                                 55                      592
           TRADING INCOME FROM ORDINARY                             56               r.29+52-53
           ACTIVITY                                                                                        -47 218                 -47 081
XVIII.     extraordinary revenues                                   57                 acc.gr.68                 8
U.         extraordinary expenses                                   58                 acc.gr.58                 4                         4
V.         income taxes on extraordinary income                     59                   60+61                   0
   1.      due                                                      60                      593                  0
   2.      deferred                                                 61                      594
           TRADING INCOME FROM                                      62                 57-58-59
           EXTRAORDINARY ACTIVITY                                                                                   4                      -4
U.         transfer of share of trading income                                              596
           to partners                                              63
           ACCOUNTING PERIOD TRADING INCOME                         64                56+62-63
                                                                                                           -47 214                 -47 085
           CHECK NUMBER                                             99         1 up to 64                1 930 785               1 784 792




            26                                                                                          Liptovský Hrádok a.s.
                               Auditor´s Report




                            INDEPENDENT AUDITOR’S REPORT

For shareholders of TESLA Liptovský Hrádok a.s.,
Palenica 53/79, Liptovsky Hradok 033 17

Report on Financial Statements
We have carried out the audit of attached financial statements of TESLA Liptovský Hrádok a.s.,
which include Balance Sheet by 31 December 2006, Profit and Loss Account for the year ending in
that time as well as an overview of essential accounting rules and further explicative comments.

Responsibility of Management for Financial Statements
The management is responsible for elaboration and objective presentation of these financial
statements in accordance with national statements for financial reporting. Its responsibility
includes: proposal, implementation and maintenance of internal check which is relevant for
preparation and objective presentation of financial statements not containing significant wrong
facts whether due to fraud or error; selection and application of suitable accounting rules;
elaboration of accounting estimates reasonable for existing circumstances.

Auditor’s Responsibility
Our responsibility is to express our opinion on these financial statements on the basis of our audit.
Our audit was carried out in accordance with international audit standards. In conformity with these
standards we have to adhere to ethical requirements, to plan and to carry out an audit in order to
assure ourselves adequately that financial statements do not contain any significant wrong facts.

A part of the audit is execution of procedures for gaining auditor’s evidences about amounts and
data shown in financial statements. Selected procedures depend on auditor’s decision incl.
considering the risk of significant wrong facts in financial statements, whether due to fraud or
error. In evaluating such risk the auditor considers an internal check relevant for elaboration and
objective presentation of financial statements in order to propose auditor’s procedures suitable
under given circumstances, however not for the purpose of getting his viewpoint off about
efficiency of an internal check of the accounting unit.           Moreover the audit includes an
appraisement of fitness of accounting rules used and reasonability of important accounting
estimates elaborated by the management as well as an appraisement of presentation of financial
statements as a whole. We are convinced that auditor’s evidences gained by us are sufficient and
suitable as a starting point for our opinion.




         Liptovský Hrádok a.s.                                                            27
                                               Auditor´s Report



Opinion
In our opinion financial statements provide a true and objective view of financial position of the
company by 13 December 2006 and of its economy results and cash flows for the year terminating
in accordance with national standards for financial reporting.

In Presov, on 23 March 2007




ACCEPT AUDIT & CONSULTING, s.r.o.                            Responsible auditor:
Oktobrova 35, 080 01 Presov                                  Ing. Ivan Bosela, PhD.
license SKAU No. 000124                                      license SKAU No. 000161
OR OS Presov



 28                                                                              Liptovský Hrádok a.s.
                              Remarks to Annual Financial Statement




Name of accounting unit:
TESLA LIPTOVSKÝ HRÁDOK A.S.

Registered office of accounting unit:
LIPTOVSKÝ HRÁDOK

Street and building No.:
PÁLENICA 53/79

ZIP:                     Name of municipality:
033 17                   LIPTOVSKÝ HRÁDOK

CRN:            00009687

Date of establishment:     30 November 1990

Date of record in Companies’ Register:        1   January 1991

   Elaborated on           Signature of accounting   Signature of person        Signature of person
                           unit’s statutory body     responsible for            responsible for
   19 March 2007                                     elaboration of financial   keeping
                                                     statement                  accountancy
   Approved on


TESLA Liptovský Hrádok a.s. has elaborated Remarks in accordance with Regulation of Treasury
Department of SR No.4455/2003-92, whereby details are set out with regard to organization,
identification and content definition of items for an individual financial statement and range of data
determined from an individual financial statement for disclosure to entrepreneurs keeping accounts
in the system of double entry bookkeeping.




         Liptovský Hrádok a.s.                                                       29
                 Remarks to Annual Financial Statement

        General data

-   Main activities of the Company in accordance with extract from companies’ register

Abstract of extract from companies’ register of District Court in ZILINA

Date of extract                                   7 March 2007
List of extracts No.                              1849/06
Section                                           Sa
Inset No.                                         9/L

Line of business :

        Production, repair of medical devices, tools for medical needs.
        Assembly, maintenance, repair and service of telecommunication equipment.
        Development and production of telecommunication equipment.
        Production of one purpose mechanical and electronic machines.
        Production of devices for development of informatics and security engineering.
        Trade in goods of all kinds except of trade for which a prescribed qualification is necessary.
        Trade in goods of all kinds except of trades under license.
        Locksmith and fitter’s works, tool making, metal sheet processing.
        Accommodation services.
        Automated processing of data and providing of software.
        Providing of professional courses in the area of telecommunication equipment.
        Designing of telecommunication equipment (except of projects in investment
         constructions).
        Providing of catering.
        Development and production of communication devices.
        Repair of machines and equipment, production of spare parts.
        Production of metals and metal products.
        Galvanizing of metals.
        Intermediation of business, works and services in the range of business for which no license
         or prescribed qualification is required.
        Administration of housing stock.
        Operation of own water supply, water handling, sale of drinking water and draining of
         waste water.
        Production, distribution and sale of heat and hot service water.
        Carrying out calibration of working gauges not defined in the range of business for which
         no license or prescribed qualification is required.
        Distribution of electric energy and heat.
        Business in the area of waste handling in the range of business for which no license or
         prescribed qualification is required.
        Assembly, repair and service of telecommunication devices.
        Non-public non-mass personal transport for a contracting carrier except of taxi service.
        Business in the area of hazardous waste handling.




    30                                                                             Liptovský Hrádok a.s.
                           Remarks to Annual Financial Statement

   List of members of statutory, supervisory and other bodies of the Company

Board of Directors
Position                                Name
Chairman of BoD                         Ing. Emil Rychvalský
Vice-Chairman of BoD                    Ing. Daniel Devečka
Member of BoD                           Ing. Ján Matej
Member of BoD                           Ing. Zdenko Zvada

Supervisory Board
Position                                Name
Chairman of Supervisory Board           Ing. Jozef Hric
Vice-Chairman of Supervisory Board      Ing. Peter Valent
Member of Supervisory Board             Ján Gajdoš

  Structure of partners (shareholders)
Name                            Share in basic capital Share in basic Share in
                                in th. SKK             capital in %     voting right
TLH – HOLDING, a.s. Bratislava                290 762             72.89          72.89
Other minority shareholders                   108 138             27.11          27.11

   Name and registered office of company elaborating a consolidated financial statement for
    the biggest group of companies having the Company as a subsidiary

Name of company:
TLH – HOLDING A.S.

Registered office of company:
BRATISLAVA
Street and building No.:
RADLINSKÉHO 2

ZIP             Name of municipality:
811 07          BRATISLAVA

   Name and registered office of company elaborating a consolidated financial statement for
    the smallest group of companies having the Company as a subsidiary

Name of company:
TLH – HOLDING A.S.

Registered office of company:
BRATISLAVA
Street and building No.:
RADLINSKÉHO 2

ZIP             Name of municipality:
811 07          BRATISLAVA

CRN: 35758945




         Liptovský Hrádok a.s.                                                         31
                      Remarks to Annual Financial Statement

-   Place where these consolidated financial statements are available:
    Companies’ register of District Court in Bratislava I

-   Name, registered office and legal form of companies, for which the Company is a general
    partner

Name of company                 Registered office of company Legal form
no any

-   Average number of employees

Average number of employees                      Thereof managers
                   373                                                 24

- Reason for elaboration of annual financial statement
The company elaborated the annual financial statement by 31 December 2006 for reason of
uninterrupted continuation of its business activity.

- Approval of previous annual financial statement
The proper annual financial statement for previous accounting period (by 31 December 2005) was
approved by the general meeting of shareholders on 31 October 2006.

       Information about accounting methods and general accounting principles

       Method of appraisement of particular items

1.a) Long-term intangible assets purchased
    Evaluated by means of purchase price

1.b) Long-term intangible assets generated by own activities
    Evaluated by means of:
    - real actual expenses;
       a part of real actual expenses included into evaluation are:
     direct expenses,
     indirect expenses (factory expense/indirect product cost)
         (depreciation, energy consumption, co-operation, general indirect expenses, i.e.
         administrative overhead expenses)

1.c) Long-term tangible assets purchased
     Evaluated by means of purchase price. A part of purchase price is:
     value of acquisition.
    Expenses connected with purchase:
     projecting works, technical evaluation, transport charges, assembly.




    32                                                                          Liptovský Hrádok a.s.
                      Remarks to Annual Financial Statement

1.d) Long-term tangible assets generated by own activities
     Evaluated by means of real actual cost.
  A part of real actual (prime) cost are:
    - direct expenses, indirect expenses connected with generation of assets (factory expenses)

1.e) Long-term financial assets
     Evaluated by means of purchase price (value of acquisition)

1.f) Inventory purchased
     Evaluated by means of purchase price
     A part of purchase price are:
    - value of acquisition, transport charges, customs duty, further secondary cost connected with
        purchase.

For the year 2006 TESLA Liptovský Hrádok a.s. kept records of purchasing material inventories
in purchase prices. Material inventories in store were recorded in fixed store prices With these
prices material inventories were put into consumption. The difference between a purchase price
and fixed store price in time of acquisition was recorded in the separate analytical account to the
account 112- Material in store - in a form of evaluated differences. In the separate analytical
account to the account 112 there were recorded also secondary purchase expenses connected with
purchase of material inventories. Balances of such accounts were dissolved by TLH into expenses
in accordance with the formula set out by internal company’s directive.

1.g) Inventories generated by own activities

1. Work-in-progress
   Evaluated by means of
   - real actual cost in accordance with operative (planned) calculations.
   Real actual cost include:
   - direct material cost, semi-finished goods, direct labor cost, other direct cost, factory
      expenses.

2. Semi-finished goods internally produced
   Evaluated by means of
   - real actual cost in accordance with operative (planned) calculations
   Real actual cost include:
   - direct material cost, semi-finished goods, direct labor cost, other direct cost, factory
       expenses

3. Finished goods
   Evaluated by means of
   - real actual cost in accordance with operative (planned) calculations
   Real actual cost include:
   a) direct material cost, semi-finished goods, direct labor cost
   b) other direct cost, factory expenses




    Liptovský Hrádok a.s.                                                           33
                    Remarks to Annual Financial Statement

1.h) Receivables
     Evaluated by means of
    - nominal value

1.i) Short-term financial assets
     Evaluated by means of
    - nominal value

1.j) Deferred accounts

       1.           381 – Deferred expenses
                    Evaluated by nominal value

       2.           385 – Accrued revenues
                    Evaluated by nominal value

       3.           383 – Accrued expenses
                    Evaluated by nominal value

       4.           384 – Deferred revenues
                    Evaluated by nominal value

1.k) Payables
     Evaluated by nominal value

1.l)    Reserves
        Evaluated by means of appraised (estimated) value (price).

1.m) Loans and credits
     Loans and credits in Slovak crowns are evaluated by nominal value. Loans and credits in
     foreign currency are converted at the rate of exchange in NBS.

1.n) Method of appraisement of dedicated property
     The company did not obtain any property through dedication in 2006.

1.o) Method of appraisement of property obtained by means of privatization or purchase
     through National Property Fund
     The company did not obtain any property via privatization or purchase through NPF.

1.p) Derivations, property and payables assured by derivations.
    The company did not recorded any derivations in 2006.

1.r) Property leased and property obtained on the basis of the Lease-Purchase Agreement
Property let on lease and property acquired on the basis of the Lease-Purchase Agreement is kept
by the Company in sub-balance accounting records with the price set out in the concerned lease
agreement. The property acquired on the basis of the Lease-Purchase Agreement concluded after 1
January 2004 is recorded in accounts of long-term assets, namely with the price stated in the Lease
Agreement as a purchase price with the related entry in the account 474 – Long-term payables.




34                                                                               Liptovský Hrádok a.s.
                        Remarks to Annual Financial Statement

1.s) Income tax payable for current accounting and taxable period and deferred income tax
The due income tax by 31 December 2006 is recorded by the Company in the amount of 4,959.45
SKK. This tax consists of:
    - credit interest tax from deposits in commercial companies.
By 31 December 2006 the Company shows deferred income tax (for future accounting and taxable
periods) in the total amount of 2,090,299.00 SKK.

1. Method of elaboration of depreciation plan for long-term assets, depreciation time, rate of
   depreciation and depreciation methods in setting out the book depreciation

By its internal instruction TESLA Liptovský Hrádok a.s. set out rules for depreciation of long-term
assets. Long-term intangible assets and long-term tangible assets are included into the depreciation
group and depreciated by appropriate % in the mentioned depreciation group in the time assets
were included there according to the law of income tax. For long-term intangible and tangible
assets there is applied a uniform depreciation time.
In the year 2006 there was interrupted a depreciation of long-term assets referring to the years 2005
and 2004. The book depreciation was set up on the implemented software for the period of 10
years.

2. Principles of additions to provisions

The Company creates adjustments to almost irrevocable receivables (debts) which are more than
365 days after the date of maturity. The Company creates adjustments to commercial traffic
receivables which are registered for bankruptcy in the amount of 100% of nominal value of debt.

3. Conversion of data in foreign currencies into Slovak currency

   a./ during accounting period
Assets and liabilities (payables) expressed in foreign currency are converted by the Company into
Slovak currency by means of:
a) rate of exchange in NBS (National Bank of Slovakia) valid by the date of execution of an
   accounting event
   - in accounting any monetary transactions in foreign currency between the accounting unit
       and monetary institutions at the exchange rate (purchase or sale) valid by the date of
       execution of accounting event in an appropriate bank.
   The date of execution of accounting event is considered:
   - fulfillment date of delivery, date of bank payment, date of settlement of outstanding
       account (debt collection), date of tax liability occurrence in delivering goods or services;
   - date when the accounting unit had bookkeeping documents at its disposal.

    b./ by the date of elaboration of annual financial statement
Assets and liabilities (payables) expressed in foreign currency by the date of elaborating the annual
financial statement are converted into Slovak currency at the rate of exchange in NBS valid by the
date of elaborating the annual financial statement.




        Liptovský Hrádok a.s.                                                          35
                        Remarks to Annual Financial Statement


   Changes of methods of appraisement, depreciation, accounting procedures, placement of
    items of annual financial statement and content specification of these items in comparison
    with previous accounting period

In the course of the accounting period the Company did not carry out any changes of methods of
appraisement of long-term assets. Method of tax depreciation for long-term assets the Company set
out in accordance with principles stated in the Act of income taxes No.595/2003 of Code and its
amendments which came into effect from 1 January 2004. The method of book depreciation was
not changed by the Company. Accounting procedures, placement of items of annual financial
statement and content specification of these items are in conformity with the wording of the
Accountancy Act No. 431/2002 of Code and its amendments which came into effect from 1
January 2004.

III. Additional data to Balance Sheet and Profit and Loss Account
-   Name, registered office, owner’s equity and economic result for current and previous
    accounting period

1.a) Securities and ownership interests in controlled companies (subsidiaries)
Name and registered office               Current period       Previous period           Share
                                                                                        in %
                                      Owner’s Economic Owner’s Economic
                                      equity   result      equity   result
INTOP s.r.o. Liptovsky Hradok           18 268        -652   18 916        653             100

1.b) Shared securities and ownership interests in companies with substantial influence
(affiliate companies)
Name and registered office             Current period        Previous period      Share
                                                                                  in %
                                   Owner’s Economic Owner’s Economic
                                   equity      result     equity     result
The company haven’t any

1.c) Other long-term equity
Long-term financial assets constituting the share in basic capital in other accounting unit where the
Company has less than 20% share in voting rights, was not appraised by 31 December 2006 as
a real value because it was not possible to define it reliably.

2. Method and amount of insurance of long-term assets
The value of property insurance in 2006 constitutes 1,667,397 SKK. The insurance includes:
insurance of automobiles, other tangible and intangible assets, things and values theft insurance,
money holdup insurance and liability insurance. TLH a.s. placed insurance of its long-term
property with the insurance company Komunalna poistovna a.s. in accordance with the insurance
contracts.




     36                                                                            Liptovský Hrádok a.s.
                       Remarks to Annual Financial Statement

3. Inventory data
3.a) Overview of adjustments
Kind of inventory                       by 1 Jan. Additions Decrease Cancellation by 31 Dec.
to materials                                    0      5 111       0        5 111          0
to work-in-prog. and semi-fin. products         0      9 147       0        9 147          0
to finished products                            0        442       0          442          0
to animals                                      0          0       0            0          0
to merchandise                                  0         32       0           32          0
to advance payments for inventory               0          0       0            0          0

Based on General Director’s decision No. 10/2006 by 31 December 2005 there were made
adjustments to inventories which were dissolved by 31 August 2006. It was retirement of dubious
inventories.

3.b) Method and amount of inventory insurance
Company’s inventories are insured within the property insurance with Komunalna poistovna a.s.

3.c) Data connected with made-to-order production
The accounting unit did not account made-to-order production in the course of 2006.

   Receivables data

4.a) Overview of adjustments to receivables
Balance item                            by 1 Jan. Additions Cancellation by 31 Dec.
Long-term receivables
Receivables from business relations
Receivables from partners and
participants in association
Receivables in enterprises with
controlling influence
Receivables in enterprises with
substantial influence
Other receivables
Short-term receivables                      30 449        36     18 237      12 248
Receivables from business relations         12 991        36       1 437     11 590
Receivables from partners and
participants in association
Social security
State – tax receivables
State – deferred tax receivables
Receivables in enterprises with
controlling influence
Receivables in enterprises with
substantial influence
Other receivables                           17 458         0     16 800         658

By 31 December 2006 the Company made adjustments to almost irrevocable debts from business
relations with more than 365 days after maturity date in the amount of 35,716.02 SKK: 15,152.82
SKK from Auxilium and 20,563.20 SKK from Steelimex.




       Liptovský Hrádok a.s.                                                           37
                     Remarks to Annual Financial Statement

By 31 December 2006 the Company accounted for adjustments to receivables from business
relations after termination of bankruptcy proceedings in Presovske stavomontaze in the amount of
51,120.21 SKK, in Crapy s.r.o. in the amount of 958,458.80 SKK, from the liquidation of Tercio M
in the amount of 415,179.80 SKK, from Bartosova in the amount of 12,190 SKK (receivables
paid), from Baxter to interests in the amount of 16,799,610.69 SKK.

4.b) Amount of receivables before and after the date of maturity
                                         Receiv. by 1 Jan. of c.y.   Receiv. by 31 Dec. of c.y.
Receivables before the date of maturity                    91 741                     81 513
Receivables after the date of maturity                     30 289                     17 124
4.c) Receivables covered by right of lien or otherwise ensured
Receivables         Amount of receivables               Ensured by
no any
4.d) Amount and description of receivables from partners
Balance item                                 Amount          Description
Long-term receivables                        no any
Receivables from business relations
Receivables from controlling and controlled
entity
Other receivables within the consolidated
whole
Other receivables
Deferred tax receivables
Short-term receivables
Receivables from business relations               29 759 000 TLH Holding – carrying to
                                                             account and settling the
                                                             amount from the transfer of
                                                             Baxter’s debt
Receivables from controlled and controlling
entity
Other receivables within the consolidated
whole
Social security
Tax receivables
Other receivables

   Financial assets data

5.a) Description of short-term financial assets
The accounting unit owns short-term financial assets shown in the annual financial statement.
Description of short-term financial assets                               Appraisement
Cash                                                                                       63
Stamps & vouchers                                                                          37
Financial means in bank accounts                                                        2 545

By 31 December 2006 the Company does not keep any records of adjustments to short-term
financial assets.
By 31 December 2006 the Company does not keep any records about short-term financial assets
concerning close partners.




    38                                                                           Liptovský Hrádok a.s.
                    Remarks to Annual Financial Statement


   Deferred assets data

6.a) Description of important deferred items and methods of their dissolution
Description of item                                   Amount Method of dissolution
381 – Deferred expenses                                     601 in 2007 after receipt of
                                                                 bookkeeping document
     - DE leasing                                           171
     - advance payment etc.                                 430
385 – Accrued revenues                                       82

6.b) Deferred accounts towards close partners
Description of item                                      Amount Method of dissolution
381 – Deferred expenses                                        0
385 – Accrued revenues                                         0

   Owner’s equity data

7.a) Description of basic capital
By 31 December 2006 the basic capital of TESLA Liptovský Hrádok a.s. constitutes the amount of
398,900 thousand SKK. Number of shares is 398,900 pieces with nominal value 1,000 SKK per
share.

7.b) Amount of subscribed basic capital not registered in companies’ register
Amount of subscribed basic capital not registered in Subscribed   Thereof unpaid
companies’ register
                                                   0            0                         0

7.c) Description and amount of changes in owner’s equity

Text                                      State of owner’s equity State of owner’s equity
                                          in current period       in previous period
Owner’s equity, therein:                                  180 085                  227 299
Basic capital                                             398 900                  398 900
Own shares                                                      0                         0
Share premium                                                   0                         0
Other capital funds                                             0                         0
Gains and losses from revaluation                             719                      719
Legal reserve fund                                            480                      480
Indivisible fund                                                0                         0
Statutory and other funds                                       0                         0
Retained earnings from previous years                           0                         0
Accumulated losses from previous years                   -172 800                 -125 715
Net profit (economic result) in current
accounting period                                        -47 214                   -47 085




    Liptovský Hrádok a.s.                                                            39
                     Remarks to Annual Financial Statement

7.d) Distribution of accountable profit or settlement of loss

Use of profit
Allocation to legal reserve fund
Allocation to increase of basic capital
Allocation to statutory funds
Allocation to other funds
Use for settlement of accumulated losses from previous years
Dividends, profit sharing
Retained earnings from previous years
Other distribution of profit

Settlement of loss                                                          Amount
Settlement of loss from reserve fund
Settlement of loss from statutory and other funds
Settlement of loss by partners
Settlement of loss by reduction of basic capital
Settlement of loss by clearing with retained earnings from previous years
Re-accounting for accumulated losses from previous years
Other settlement of loss
In total

7.e) Proposal of net profit distribution to be approved and submitted to appropriate body of
the accounting unit

Proposal of profit distribution                                             Amount
Profit for distribution
Allocation to legal reserve fund
Allocation to increase of basic capital
Allocation to statutory funds
Allocation to other funds
Use for settlement of accumulated losses from previous years
Dividends, profit sharing
Retained earnings from previous years
Other distribution of profit

Proposal of settlement of loss                                              Amount
Loss to be settled                                                                   -47 214
Settlement of loss from reserve fund
Settlement of loss from statutory and other funds
Settlement of loss by partners
Settlement of loss by reduction of basic capital
Settlement of loss by clearing with retained earnings from previous years
Re-accounting to accumulated losses from previous years                              -47 214
Other settlement of loss




    40                                                                         Liptovský Hrádok a.s.
                    Remarks to Annual Financial Statement




   Reserve data

8.a) Description of particular reserves

Kind of reserve                                                       thousand SKK
Short-term reserves in total                                                     4 114
- reserve for wages for holiday not used                                           359
- reserve for deliveries non-invoiced                                              952
- reserve for wages unpaid                                                       2 803

8.b) Reserves concerning close partners

Kind of reserve                                                       thousand SKK
no reserves

   Payables data

9.a) Amount of payables before and after date of maturity
                                 Payables by 1 Jan. of c.y. Payables by 31 Dec. of c.y.
Payables before date of maturity
                                                    148 995                   136 782
Payables after date of maturity                      26 337                    46 159

9.b) Structure of payables according to the remaining due time
Balance item                                  Remaining due time
                                              within 1 year from 1 till 5 by 1 Jan. of
                                                            years          c. y.
Reserves                                              4 114                       2 109
Payables from business relations                     84 375                      69 160
Deliveries not invoiced                                 160                           68
Payables to employees                                 5 537                       5 527
Payables for social security                          3 158                       2 891
State: Tax payables and subsidies                       645                       1 149
State: Deferred tax payables                              0                            0
Payables for social fund                                               194          115
Other payables                                                      17575          8029
Long-term advance payments received                       0                            0
Issued bonds                                              0                            0
Long-term bills of exchange to be paid                    0                            0
Bank loans                                           26 723        38 307        78 381
Short-term financial subsidy                             63                         118




    Liptovský Hrádok a.s.                                                        41
                       Remarks to Annual Financial Statement



9.c) Amount and description of payables to close partners
Balance item                                                            Amount       Description
Long-term payables                                                               0
Payables from business relations
Payables to partners and participants in association
Payables to enterprises with controlling influence
Payables to enterprises with substantial influence
Other payables
Short-term payables                                                              0
Payables from business relations
Payables to partners and participants in association
Payables to enterprises with controlling influence
Payables to enterprises with substantial influence
Other payables

9.d) Social Fund Overview
                               Text                                      Amount in th. SKK
State of social fund by 1 January                                                          115
Funding by obligatory allocation from expenses                                             694
Funding by profit distribution                                                               0
Funding by allocation from other funds                                                       0
Funding from gifts, subsidies, allocations received                                          0
Other funding                                                                              480
Funding in total                                                                         1 174
Drawing for catering of employees and regeneration of labor resources                      228
Drawing for social subsidy, contribution to transport to job and
additional annuity insurance                                                                 326
Drawing for social policy realization                                                        480
Other drawing                                                                                 61
Drawing in total                                                                           1 095
State of social fund by 31 December                                                          194

9.e) Bonds data
By 31 December 2006 the Company has not any bonds recorded in its accountancy.




   42                                                                                 Liptovský Hrádok a.s.
                    Remarks to Annual Financial Statement



10. Bank loans and subsidies data
Data are stated in thousands.
Bank          DEXIA a.s. DEXIA           DEXIA a.s.     Cidel bank   VUB a.s.      VUB a.s.
              Zilina,      a.s.          Zilina, bank   Barbados     Bratislava,   Bratislava,
              bank         Zilina,       branch in                   bank          bank
              branch in    bank          Lipt.                       branch in     branch in
              Lipt.        branch in     Mikulas                     Lipt.         Lipt.
              Mikulas      Lipt.                                     Mikulas       Mikulas
                           Mikulas
Amount          3 500 th.   18 500 th.    17 000 th.     600 th.      15 000 th.    7 800 th.
Currency          SKK           SKK         SKK           USD           SKK           SKK
Amount in 2 625 th.         12 947 th.    14 000 th.    15 748 th.    14 790 th.    4 920 th.
SKK
Interest         7.11 %       6.83 %        6.91 %        11.38 %     7.11 %      7.77 %
Maturity       20.7.2008 14.6.2010        14.2.2011     26.10.2011 30.6.2007 20.8.2008
Secured by Long-term Long-term           Receivables    Long-term Long-term Long-term
              assets,      assets,       Dewert,        assets     assets,     assets
              receivables receivables    Protherm                  receivables
Purpose       Term loan Term loan        Term loan      Coverage   Bank        Term loan
                                                        of         overdraft
                                                        operating
                                                        needs

11. Data of deferred liabilities accounts
11.a) Description of important deferred items and method of their dissolution
Description of item                                  Amount       Dissolution method
383 – Accrued expenses                                         0
384 – Deferred revenues                                    7 907 in 1/2007
      - deferred revenues from leasing                     7 005 till 2009
      - leases invoiced for 2006                             902 1/2007

11.b) Deferred assets accounts towards close partners
Description of item                                   Amount   Dissolution method
383 – Accrued expenses                                       0
384 – Deferred revenues                                      0

12. Information about revenues and expenses

   Data concerning revenues from sales of own products, goods and services according to
    market segments and territories
Kind of revenues                          Segment / Territory
                           Inland               Abroad            Czech republic
                      2006        2005      2006      2005       2006       2005
Sales of merchandise    3 759       1 715         0          0         0          0
Sales of own products 174 216     105 339   156 783   190 649     39 148     38 017
Sales of services      32 572      35 061       670      1 475         0         50




    Liptovský Hrádok a.s.                                                                  43
                          Remarks to Annual Financial Statement

2. Inventory status change data
              Text                      Difference in status Change of status Difference   Reason of
                                         by 31 Dec. of c.y.       61x                      difference
                                               minus
                                         by 31 Dec. of p.y.
Work-in-progress                                   -1 578            -1 578           0
Semi-finished goods of own production              -7 799            -7 799           0
Finished goods                                      1 156             1 156           0
Animals                                                 0                 0           0

3. Revenues from capitalization of expenses
                                 Text                                              thous. SKK
Capitalization of material                                                                   1 138
Capitalization of long-term intangible assets                                                6 151
Capitalization of long-term tangible assets                                                     10

  Date about other revenues from economic activity
                                  Text                                             thous. SKK
Revenues from sale of long-term assets                                                       8 477
Revenues from sale of material                                                               4 518
Other operating revenues                                                                    12 996
Accounting for provisions (i.e. reduction)                                                  32 844

   Financial revenues data
                                Text                                               thous. SKK
Revenues from bank interests                                                                       15
Revenues from financial transactions (loans)                                                    5 923
Exchange rate gains from financial transactions                                                 2 358
Exchange rate gains from conversions by 31 December                                             4 387
Other revenues from financial activity                                                             82

6. Data about expenses for services provided
                               Text                                                thous. SKK
Repair and maintenance                                                                       7 962
Travel expenses                                                                              1 636
Representation expenses                                                                        490
Other services                                                                              29 031

7. Personnel expenses data
                                    Text                                           thous. SKK
Wages and salaries                                                                          74 414
Remuneration of board members                                                                4 811
Tax-based income policy                                                                     24 539
Contributions for transport of employees to job                                              1 079
Other social expenses                                                                        4 260




     44                                                                               Liptovský Hrádok a.s.
                      Remarks to Annual Financial Statement


8. Data about other expenses for economic activity
                                 Text                                  thous. SKK
Road tax                                                                             29
Real estate tax                                                                   1 421
Other taxes and fees                                                                519
Net book value of long-term assets sold                                           5 600
Material sold                                                                       939
Gifts                                                                               181
Fines and penalties                                                                 433
Write-off of receivables                                                        131 215
Other expenses for economic activity                                                696
Depreciation of long-term assets                                                 42 202

9. Financial expenses data
                                 Text                                  thous. SKK
Shares and ownership interests sold                                                     0
Credit interests                                                                    6 770
Exchange rate losses from financial transactions                                    4 042
Exchange rate losses from conversions by 31 December                                1 720
Other expenses for financial activity (568)                                         3 085

10. Data about revenues from long-term financial assets
                Description of financial investment                    thous. SKK
Revenues from sales of shares and ownership interests                                200
Accounting for provisions to financial assets                                          0

11. Data about property damages caused
No. of account                  Description of damage                  thous. SKK
549-100          Damages to property                                             5 099
569-100          Damages to financial assets                                       200
12. Data about extraordinary expenses and extraordinary revenues
                             Description                               thous. SKK
Damages                                                                                0
Correction of accounting for previous accounting periods                               0
Other extraordinary expenses                                                           8

IV. Overview of property which market evaluation differs significantly from its evaluation in
accountancy
The company has not any entry of property in its accountancy, which market evaluation differs
significantly from its evaluation in the bookkeeping.




      Liptovský Hrádok a.s.                                                    45
                    Remarks to Annual Financial Statement



 V. Leased and hired property recorded in off-balance account

 -   Leased property recorded in sub-balance accounts
 Leasing company     Subject of leasing   Volume of leasing     Actual balance       Date of maturity
 Deutsche leasing    Machinery            329 000 EUR           9 000 EUR            15 February 2007
 Deutsche leasing    Machinery            87 000 EUR            5 000 EUR            15 April 2007
 Besides the above-mentioned facts the Company has records of property of Civil Defense in its
 sub-balance accounts as follows:
      Account 760 – Material in the warehouse of Civil Defense in the amount of 1,081,955.10
         SKK
      Account 763 – Long-term property of Economy Department of SR in the amount of 28,751
         SKK
 - Hired property recorded in sub-balance accounts
 Lessee           Subject of lease Value of lease Actual balance Termination of lease
 TLH Holding automobile            864 000 SKK 10 000 SKK            28 February 2008
 VI. Events occurred after the date of elaboration of annual financial statement
 After the date of elaboration of annual financial statement no events occurred which could exert
 significant influence upon it.

 VII. Events not described in the annex, but they are a part of Annual Financial Statement
 TLH owns 32 pieces of shares as a registered stock issued by DEVIN BANKA a.s. with the
 nominal value of 1,600,000.00 SKK. Because on 28 September 2001 the bankruptcy of this
 financial institution was declared, TLH made an adjusting entry in the amount of 100% nominal
 value of financial investment to the debit of non-tax expenses by 31 December 2001. By 31
 December 2006 there was not issued a resolution of bankruptcy court held in the matter of the
 bankrupted company.
 On the basis of the resolution No. 39-24K of District Court in Banska Bystrica the company
 TercioM s.r.o. was liquidated by 8 September 2006 due to lack of debtor’s property. On 6 October
 2006 this company was deleted from companies’ register of District Court in Zilina. On the basis of
 above-mentioned facts the share of TESLA Liptovský Hrádok a.s. in the above-mentioned
 company in the amount of 200,000 SKK was annulled and written off.

 VIII. Overview of owner’s equity
 Text                                                         Status of owner’s     Status of owner’s
                                                              equity in current     equity in previous
                                                              period                period
 Owner’s equity therein:                                                  180 085               227 299
 Registered (basic) capital                                               398 900               398 900
 Own shares                                                                     0                     0
 Share premium                                                                  0                     0
 Other capital funds                                                            0                     0
 Gains and losses                                                             719                   719
 Legal reserve fund                                                           480                   480
 Indivisible fund                                                               0                     0
 Statutory and other funds                                                      0                     0
 Retained earnings from previous years                                          0                     0
 Accumulated losses from previous years                                  -172 800              -125 715
 Net profit or loss from current accounting period                        -47 214               -47 085
 Dividends paid                                                                 0                     0
 Further changes in owner’s equity                                              0                     0




46                                                                                       Liptovský Hrádok a.s.
                          Remarks to Annual Financial Statement




X. Events not described in the annex which are a part of Annual Financial Statement

TLH owns 32 pieces of shares as a registered stock issued by DEVIN BANKA a.s. with the
nominal value of 1,600,000.00 SKK. Because on 28 September 2001 the bankruptcy proceeding of
this financial institution was declared, TLH made an adjusting entry in the 100% amount of
nominal value of financial investment to the debit of non-tax expenses by 31 December 2001. By
31 December 2006 there was not issued a resolution of bankruptcy court held in the matter of the
company bankrupted.




Transfer of business share of MOLTES s.r.o.
On 22 November 2005 on the basis of decision of General Meeting of the Company there was
signed an agreement about transfer of business share in MOLTES s.r.o. to MOLEX Slovakia
Management s.r.o. Bratislava.
The amount of the business share of 867 000 SKK was transferred to the above-mentioned
company for recompense (repurchase) in the amount of 2 Mil. SKK. Through the transfer of the
business share and its settlement (clearing), the investment interests in MOLTES s.r.o. ceased.

On 30 November 2005 there was signed a Contract for sale of realty, i.e. lands between TESLA
Liptovský Hrádok a.s. and TLH Holding a.s. Bratislava. The agreed upon cost of acquisition in the
amount of 9,468,750 SKK was accounted in December 2005 on the basis of deposit to the realty
cadastre.


XI. Overview of changes of owner’s equity
Text                                  Status of owner’s Status of owner’s Difference between
                                                    equity in current equity in         current and
                                                    period            previous period   previous period
Owner’s equity therein:                                     227 299           274 385              -47 086
Registered (basic) capital                                  398 900           398 900                    0
Own shares                                                        0                 0                    0
Share premium                                                     0                 0                    0
Other capital funds                                               0                 0                    0
Gains and losses                                                719               719                    0
Legal reserve fund                                              480               195                  285
Indivisible fund                                                  0                 0                    0
Statutory and other funds                                         0                 0                    0
Retained earnings from previous years                             0                 0                    0
Accumulated losses from previous years                    - 125 715         - 130 232                4 517
Net profit or loss from current accounting period           -47 085             4 803              -42 282
Dividends paid                                                    0                 0                    0
Further changes in owner’s equity                                 0                 0                    0




    Liptovský Hrádok a.s.                                                                             47
                                                       Cash Flow Statement

 Cash Flow Statement

       Item                       Name of item                  Row No.                        Accounting period
                                                                                       current         directly previous
 A.                                                  Cash flow from operating activity (OA)
 A.1          Operating activity expenses                           01                      -543 017
 A.2          Adjustment of expenses for OA by the amount           02                       -14 518
 A.3          OA expenses adjusted (A.1+/-A.2)                      03                     -557 535
 A.4          Revenues from OA                                      04                      506 146
 A.5          Adjustment of revenues into income from OA by         05                         9 907
              the amount
 A.6          Revenues from OA adjusted by income                   06                       516 053
              (A.4+/-A.5)
 A.7          Other income from OA                                  07                              0
 A.8          Other expenses for OA                                 08                              0
 A*           Cash flow from operating activity without items stated09                       -41 482                -51 631
              separately in the overview
              (A3+A6+A7+A8)
 A.9          Items shown separately                                10                          -632
 A**          Cash flow from operating activity (A* + A9)           11                       -42 114                -50 979
 A.10         Income taxes from OA incl. overpayments               12                              5
              refunded (from account 341)
 A.11         Extraordinary income referred to OA                   13                              8
 A.12         Extraordinary expenses referred to OA                 14                             -4
 A.13         Changes in social fund                                15                           194
 A.14         Other items exerting influence on cash flows          16                              0
              from OA
 A***         Net cash flow from OA (A**+A10 up to A14)             17                       -41 911               -51 631
 B.                                                  Cash flow from investment activity (IA)
 B.1          Expenses for acquisition of long-term assets          18                        33 872
 B.2          Income from sales of long-term assets                 19                         8 677
 B.3          Expenses for long-term loans granted to the           20                              0
              consolidated whole
 B.4          Incomes from repayment of long-term loans granted 21                                  0
              to the consolidated whole
 B.5          Expenses for other long-term loans granted            22                              0
 B.6          Income from repayment of other long-term loans        23                              0
 B.7          Income from leasing of movable and immovable          24                              0
              assets
 B.8          Income from subsidies for long-term assets            25                              0
              acquired
 B.9          Interests and dividends received except for ones      26                              0
              included in OA
 B.10         Extraordinary income referred to IA                   27                              0
 B.11         Extraordinary expenses referred to IA                 28                              0
 B.12         Other income referred to IA                           29                         9 294
 B.13         Other expenses referred to IA                         30                              0
 B.           Net cash flow from IA (B1 + up to B13)                31                        51 843                -10 776
 C.                                                   Cash flow from financial activity (FA)
 C.1          Cash flow arising out of owner’s equity               32                              0
 C.1.1        Income from shares subscribed and ownership           33                              0
              interests and from further deposits into owner’s
              equity
 C.1.2        Monetary gifts received                               34                              0
 C.1.3        Income from settlement of loss by partners            35                              0
 C.1.4        Expenses for acquisition of own shares and            36                              0
              ownership interests




48                                                                                                    Liptovský Hrádok a.s.
                                Cash Flow Statement



C.1.5    Expenses for pay-out of participation share in      37        0
         owner’s equity (compensation shares of partners,
         members and others)
C.1.6    Expenses connected with reduction of funds          38        0
         included into owner’s equity
C.1.7    Expenses for other reasons connected with           39        0
         reduction of owner’s equity
C.2      Cash flow from long-term payables from FA           40   -10 915
C.2.1    Income from credits and loans received, from        41    88 822
         bonds issued and other long-term debentures and
         similar securities
C.2.2    Expenses for repayment of credits and loans,        42   -84 439
         bonds issued and other long-term debentures and
         similar securities
C.2.3    Income from other long-term payables                43         0
C.2.4    Expenses for repayment of other long-term           44   -15 298
         payables
C.3      Expenses for repayment of interests and             45        0
         dividends except for ones included in OA
C.4      Extraordinary income referred to FA                 46         0
C.5      Extraordinary expenses referred to FA               47         0
C.6      Other income referred to FA                         48         0
C.7      Other expenses referred to FA                       49         0
C.       Net cash flow from FA (C1+ up to C7)                50   -10 915         40 548
D.       Net increase or net reduction of finance            51       261        -21 859
E.       Status of finance and monetary equivalents at the   52   -11 805         10 054
         beginning of accounting period
F.       Status of finance and monetary equivalents at the   53   -11 544        -11 805
         end of accounting period before considering
         exchange rate losses and gains calculated by the
         date of elaboration of Annual Financial
         Statement
G.       Exchange rate losses or gains calculated from       54        0              0
         finance and monetary equivalents by the date of
         elaboration of Annual Financial Statement
G.1      Exchange rate losses or gains (from account 563)    55         0
G.2      Exchange rate gains (from account 663)              56         0
H        Balance of finance and monetary equivalents at      57   -11 544        -11 805
         the end of accounting period adjusted by exchange
         rate losses or gains calculated by the date of
         Annual Financial Statement




        Liptovský Hrádok a.s.                                               49
                               Business Objective for the year 2007


Business Objective for the year 2007

BUSINESS OBJECTIVE FOR THE YEAR 2007

The Business Objective for the year 2007 accepts the philosophy of a medium-term strategic
intention adopted and approved by the Company till 2008 and confirms a trend to stabilization. It
will be realized under conditions of terminating the Project of re-structuralization of Company’s
assets, the aim of which is to create a sound structure of assets and a sufficient working capital,
a positive balance of payments and to increase the solidity of the Company.

The Business Objective for the year 2007 will be realized under conditions of continuing changes
which are aimed at creation of a prosperous, modernly functioning company of the 21st century. It
will be realized under conditions of using team structures in production plants, under conditions of
pushing through the adopted principles of new company culture as well as under conditions of
implementing TPM – 5S tools, autonomous maintenance and quality. In 2007 there will be
implemented a project of improvement of personal quality in the production section to the full
extent, there will be carried out other changes in accordance with the conception of implementing
principles and directions of a modernly functioning company. All changes are carried out with low
risk enabling to implement changes without subversion of the whole company as to its economy
and organization.

   -   Basic parameters: sale, expenses, revenues, profit

The BO 2007 is a transitional way from the stabilization phase to the phase of development and
economic prosperity. This philosophy is confirmed by the change of basic annual goal,
concentration on the rate of added value achieved from personnel expenses. The basic indicators
supposed to achieve by the BO for the year 2007 are as follows:

Revenues from sales
Profit before taxation
Added value
Added value labor productivity per employee
Added value / Personnel expenses

In the area of metal part production our customers are commercial and production companies with
which TESLA Liptovský Hrádok a.s. have been cooperating in previous years. It is assumed to
achieve the volume of revenues from sales of products from metal part production in the amount of
372.6 Mil. SKK, thereof only 4.8 % constitutes revenues from sales to new customers. For
achievement of this goal it is supposed to use existing capacities effectively, to harmonize logistics
of purchase, production and sales, to ensure a balanced financing and to strengthen a technological
capacity through purchasing machinery selected.

As to electrical engineering production, there will be realized total sales in the amount of 143.2
Mil. SKK divided into sales of PCBs in the amount of 22.9 Mil. SKK and revenues from assembly
and SMD placement in the amount of 120.3 Mil SKK. It is necessary to point out that additional
technological equipment of the PCB production plant is inevitable for increasing production
volumes in this area, especially as for automatic optical inspection devices and internal circuit
tester which are necessary for increasing flexibility in working out quotations, for guaranteeing
stability of production processes and quality level required.




       50                                                                                 Liptovský Hrádok a.s.
                        Business Objective for the year 2007


Sales of telecommunication equipment proceeds from the requirement to realize Tesla-Phonet
3000 technologies on the market of Slovakia and on markets of neighboring countries of Central
Europe in the minimal amount of 15.0 Mil. SKK. This volume is fulfillment of market
expectations confirmed by development of order backlogs in 2005 as well as it is necessary
condition for starting the process of evaluating investment and operational expenses spent at the
stage of preparation for commencing serial production, acquisition activities and activities
connected with marketing research and research of personnel and material expenses connected
with commercial security of future contracts. In realizing telephone exchanges of prior generations
we suppose demand for these products in the amount of 5.6 Mil. SKK. The remaining volume in
the amount of 8.0 Mil. SKK constitutes sales of system telephone sets: 2N and DTP.

The financial plan for the year 2007 assumes to achieve an economic result, i.e. profit in the
amount of 29.0 Mil. SKK before taxation and an operating income of 39.6 Mil. SKK. Revenues are
planned in the amount of 639.5 Mil. SKK, thereof revenues from sales of own products constitute
the volume of 544.4 Mil. SKK and sales of services constitute the amount of 39.6 Mil. SKK.
Revenues from sales of merchandise in the amount of 2.2 Mil. SKK constitute revenues from sales
of tools to customers purchasing especially metal parts and products. On the revenues side we
suppose also revenues from capitalization of materials in the amount of 1.0 Mil. SKK and
capitalization of intangible and tangible assets in the amount of 0.1 Mil. SKK, revenues from sale
of intangible and tangible assets in the amount of 0.2 Mil. SKK an sales of material for 1.4 Mil.
SKK. The plan assumes revenues from receivables transferred in the amount of 38.4 Mil. SKK,
these revenues are created due to transfer of receivables from certain customers to the factoring
company. other revenues in the amount of 10.5 Mil. SKK are created due to lease of property in
the amount of 10.3 Mil. SKK, refunding of wages in the amount of 160 thous. SKK and revenues
from housing stock in the amount of 40 thous. SKK. The Business Objective assumed financial
revenues in the amount of 1.1 Mil. SKK. They are created from credit interests from bank accounts
in the amount of 0.1 Mil. SKK and the rest in the amount of 1.0 Mil. SKK constitutes exchange
rate gains.

Expenses in the year 2007 are planned in the amount of 616.01 Mil. SKK, thereof the highest item
of expenses sharing 41.7 % in total expenses constitutes direct consumed material in the amount of
256.6 Mil. SKK. Consumption is calculated in accordance with development of actual purchase
prices for main material items and according to the planned structure of sales of particular product
lines. Energy consumption was calculated for electrical power with an estimated increase of prices
and for heat (thermal) energy on the basis of an estimated price arising out from the price
structure in using wooden chips as fuel in the winter heating season of 2007 –2008. Energy
consumption is planned in the total amount of 46.1 Mil. SKK, thereof 20.2 Mil. SKK for heat
energy (thereof 5.5 Mil. SKK re-invoiced to revenues) and 25.5 Mil. SKK for electric power (re-
invoiced to revenues in the amount of 4.8 Mil. SKK), 400 thous. SKK for surface water
consumption. Consumption of indirect cost-point items is planned in the amount of 23.9 Mil. SKK,
of other services in the amount of 30.4 Mil SKK. The depreciation plan for 2007 supposes to debit
expenses in the total amount of 50.9 Mil. SKK – compared between the years it is of significantly
higher volume – due to increase of value of property written off. Depreciation consists of
depreciation of assets put down till 31 December 2006 in the amount of 37.9 Mil. SKK and of
depreciation calculated from investment intention for 2007 in the amount of 13.0 Mil. SKK.

In financial expenses the crucial item are interests in the amount of 6.7 Mil. SKK. The Loan
burden - incl. an assumed drawing of new loans and repayment of loans granted till now by the
end of 2007 – is supposed in the amount of 62.895 Mil. SKK.




Liptovský Hrádok a.s.                                                                    51
                               Business Objective for the year 2007


- Added value, profit, employees

The company assumes to achieve the volume of added value of 228, 300 thous. SKK in 2007:
growth index is 1.87; expressed in ratio indicator of added value to personnel expenses this volume
constitutes 156.4%. In 2007 the Company will achieve profit before taxation in the amount of 29.0
Mil. SKK and profit from economic activity in the amount of 39.6 Mil. SKK. The planned volume
of profit before taxation , depreciation and amortization (EBIT) will reach the level of 79.9 Mil.
SKK and the planned volume of profit before taxation, depreciation, amortization and interests
(EBITDA) will be in the amount of 86.6 Mil. SKK. It is supposed that the profit from financial
activities will reach the loss in the amount of 10.6 Mil. SKK, which consists especially of interests
from bank loans and of other financial expenses (insurance premiums, bank fees, factoring fees,
exchange rate losses) and is reduced by financial revenues from credit interests and exchange rate
gains. The plan of human resources and wages is based on calculation of need in direct workers
from the submitted plan of sales and production. Total need in employees according to particular
categories constitutes 433 persons: 283 persons of Rj category (63.9% from total number), 69
persons of Rr category (15.6%) and 91 persons of THP category (20.5%).

- Investments

The investment plan assumes acquisition of investments for purchase prices in the amount of 43.8
Mil. SKK. The scope of investments proceeds from need of solution of labor productivity and
production quality in electric engineering production (electric tester, forming machine), in PCB
production (spindle drilling device, photo plotter). For metal part production it is supposed to
purchase TRUMATIC 3000 punching press, TRUMABEND press brake and to carry out a general
reparation (renewal) of press for 160 t or 250 t. From the viewpoint of further operation of a part of
technologies in metal part production the implementation of new degreasing technology will be
essential in accordance with conditions of audit for certification in conformity with EMS 14001
standard. For ensuring current need in financing development it is supposed to fulfil the business
plan of sales and gaining a portion of foreign sources what will be a subject of special negotiations
with banks and leasing companies. Investments planned for evaluation of building constructions
create preconditions for improving production premises, increasing labor protection and
appraisement of tangible assets.

- Preconditions for fulfillment of BO 2007

1. Fulfillment of expectations as to the volume of sales of TeslaPhonet telecommunication
   systems is a reaction to development of order backlogs in 2006 and prediction of realization for
   the 1st quarter of the year 2007 at the stage of preparation of BO 2007, at the same time the
   project is still supported in pushing it through on the market. The positive development above
   the level planned can only improve the balance of BO 207 as to a qualitative point of view
   (higher rate of gains and higher creation of added value from 1 SKK of personnel expenses in
   comparison with other commodities), as to quantitative point of view (due to increase of
   revenues from sales above the planned level of 15.0 Mil. SKK), personnel point of view (need
   to consolidate production capacity via increase of number of direct workers) and as to
   marketing point of view (penetration of the trade mark and implanting the producer into the
   public awareness). An accompanying and supporting effect, especially towards the interior of
   the Company, would be the synergy arising out from business success and pushing itself
   forward on the market.




      52                                                                                Liptovský Hrádok a.s.
                              Business Objective for the year 2007


   -   Reaction to movements of exchange rate SKK:EUR towards strengthening of the Slovak
       crown. Deviation of each –0.50 SKK from levels calculated in BO will exert negative
       influence on creation of added value and gains in the amount of 1.4 Mil. SKK. It is
       necessary to direct an elimination of impacts of such influence towards the interior of the
       Company (logistics, purchase, technical preparation of production, economy) as well as
       towards the Company’s environment (suppliers, customers).

   -   The prolongation of the process of starting heat production in the supplying company on
       the basis of wooden chips up to the end of the winter heating season 2006 – 2007 can cause
       changes in parameters of consumption of thermal energy and in the total expenses balance.
       By means of negotiation with the supplier of heat energy it is necessary to achieve the
       status minimizing negative impacts of that precondition.

   Balancing of the volume of sales in metal part production to the maximal possible production
   capacity together with strengthening of technological capacity via investment – it all assumes
   an increase of requirements of customers in this segment above the level calculated in BO. The
   philosophy of necessity to acquire new technological machinery for punching and bending is
   supported by the fear included in BO, i.e. fear of failure of revenues from sales of
   telecommunication equipment (TeslaPhonet) and therefor it is substituted by revenues from
   sales of metal part production. This argumentation is supported by increased number of signals
   giving evidence of growth of interest of existing and potential customers. As to investments,
   BO contains a requirement for supplementing the technological capacity of punching and press
   braking in the amount of ca. 18.5 Mil SKK ( technology of TRUMPF) with use of leasing as
   a financing source.

   -   Continuation of the project of personal quality improvement on all levels of Company’s
       management with aim to intensify the process of carrying out changes, implementing TPM
       and 5S elements, starting activity of training center, implementing modern methods of
       management on the way to creation of a world class company.


Ing. Emil Rychvalsky
Chairman of BoD
General Director




         Liptovský Hrádok a.s.                                                         53
            Development of Employees from ASF




 Development of Employees from ESF

 In the period from 1 January 2005 till 31 December 2006 TESLA Liptovský Hrádok a.s. has been
 implementing the project of education of employees from funds of SR SR and ESF.

 Name of program: Sector Operational Program “Human Resources”

 Priority: Qualification and adaptability improvement of employees and persons entering labor market

 Measure: 3.2. Increase of scope, improvement and wider providing of further education with the aim
          to improve qualification and adaptability of employees

 Name of project: Education and development of employees in TESLA Liptovský Hrádok a.s. for
                  realization of the Company’s strategy till the year 2008

 The project was directed at the realization of the approved Company’s development strategy till the year
 2008. It was divided into several separate sections.
 1. Development of managing skills of managers on all levels of management, development of
    professional qualification of line managers - foremen in workshops; gaining managing skills and
    abilities by employees prepared as personnel substitutes and young talents of the Company.
 2. Development of business skills for business representatives and purchasing agents of the Company.
 3. Development of professional knowledge of foremen directed at production management.
 4. Analysis of education needs in worker’s professions for multi-professionalism and mastering of new
    technologies.
 5. Creation of education program for workers and implementation of the pilot project.
 6. Language education of employees.

 Education was carried out by following companies:

 NOVIDEA Poprad                    Development of managing skills of managers, development of business
                                   skills for business representatives and purchasing agents of the
                                   Company in 2006

 TRANSFER Slovensko                Development of business skills for business representatives and
                                   purchasing agents of the Company in 2005

 SLCP Consulting s.r.o. Zilina     Development of professional knowledge of foremen directed at
                                   production management and training in worker’s professions for multi-
                                   professionalism and mastering of new technologies

 ALADON L.Mikulas                  Language education of selected employees from all categories


 Budget of project:                     3,746,074.00 SKK
 Real expenses for project:             3,276,906.36 SKK
 Refunding from MPSVaR SR /ESF/:        1,966,143.82 SKK

 Number of training days:                   98




54                                                                                    Liptovský Hrádok a.s.
Liptovský Hrádok a.s.   55
              Liptovský Hrádok a.s.
Pálenica 53/79
033 17 Liptovský Hrádok
Slovak Republik
tel.: + 421 – 44 – 5201 201
Fax: + 421- 44 – 5222 391
e-mail: teslalh@teslalh.sk
www.teslalh.sk

								
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