30 June 2003

Annual General Meeting of the Shareholders

The regular General Meeting of the Shareholders of KCM SA, Plovdiv was held on June 30, 2003. The main emphasis in the work of the GM was laid on:

• Report-analysis on the financial and economic results of KCM SA as of December 31, 2002; acceptance of the statement of incomes and expenses during the year under review and making a decision to allocate a dividend;
• Report by the certified public accountant who has audited the financial statement of the company for 2002 and election of a certified public accountant for the current year 2003;
• Approval and confirmation of all the actions and decisions made by the members of the Managing and Supervisory Boards during the period of their management until the day of the General Meeting and their exoneration from responsibility.

The Executive Director of KCM SA Nikola Dobrev, Ass. Prof., Dr., Eng. stressed in its report-analysis that the company has finalized a very unfavourable year form the market point of view. The negative tendencies on the international market and the restricted domestic non-ferrous metals market had a bad influence on the financial results of KCM. A profit drop was reported as compared to the previous year. Eng. Dobrev pointed out that the main reasons for the worse results were the lower prices of the basic metals - lead and zinc, the worsened conditions for the raw materials and the going down rate USD/Euro, resp. Lev.

Nevertheless, the year left a significant trace in the development of the company. The adopted policy of restructuring the management and production activities, the large-scale investment program, the active policy with regard to production and our socially committed programs implemented during the last years are already bringing positive results. The achieved reduction of the costs and the increased efficiency of the use of energy and labour resources resulted in going up labour productivity - a main parameter which keeps the competitive powers of the company.

The Executive Director stressed that the company's policy with regard to investments was directed to the renovation and reconstruction of a part of the production facilities. While operating, KCM SA not only takes account of the environmental preservation, but it is also at the root of a series of regional activities which support the government and the society in their efforts to protect the environment in which we work and live.

As a prove that 2002 was a successful year for the company we can point out some important figures:

• 63 475 t. zinc SHG and 60 614 t. lead were produced; - the income from sales came close to BGN 174 mln.;
• the net financial result is BGN 1.369 mln.;
• the capital resource of KCM SA reached BGN 213.507 mln. of which BGN 71.441 mln;
• company's own net assets;
• 5% profit-yield of the shares was reported for as compared to their face value.

The General Meeting of the Shareholders of KCM SA, Plovdiv voted to allocate the net profit for 2002 to the amount of BGN 1 369 000 as a dividend.

The Meeting accepted the auditor's report for certification of the book-keeping activity of the company for 2002 and re-elected Mrs. Maria Dimitrova Georgieva to be the chartered accountant of the company for 2003.

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