June 10th, 2005
KCM SA, Plovdiv

The eight regular General Assembly of the Shareholders of KCM SA, Plovdiv was held on June 10th, 2005.

The main emphases in the work of the GA were laid upon:

• the Annual Report on the financial and economic status of the Company as of December 31st, 2004; Acceptance of the Income Statement of the Company;
• Report by the certified public accountant who has made an audit certification of the Accounting Report of the Company for 2004 and election of a certified public accountant for the accounting 2005;
• 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 Assembly and their exoneration from responsibility.

In his Report, the Executive Director of KCM SA, Eng. Nikolay Konarev, pointed out that KCM SA did not complete the year in good financial state.

The management continued to look for adequate solutions to overcome the financial crises of the last years. The rise in the prices of metals in the forth quarter of the year led to a decrease of the loss from the main activity. The financial specialists of the Company hedged the revenues at a reasonable price and to the possible for the Company amount. But these measures, too, could not compensate completely the market problems. The Company finalized the year with a positive result of BGN 4 096 ths. but registered a loss of BGN 677 ths. from its main activity. Eng. Konarev, identified expensive raw materials, high treatment charges and the low exchange rate of the US dollar as factors that led to that loss.

In 2004 the management of KCM SA focused its attention on the optimization of the organization, more efficient business management and on deriving of the maximum of time and resources. Internal reserves were sought for in relation to the improvement of the structure of raw materials and finished products as well as with respect to the human resource. KCM SA continued to make efforts toward the:

• application of the best available techniques. KCM SA operates successfully under ISO 9000 and IPPC. The Company is to be certified under ISO 14001 and is considering to take steps towards the of adoption OHSAS 18000 - occupational health and safety management system of recommendable character;
• introduction of the integrated business management system;
• approval of innovational policy;
• efficient management of the power costs.

In the Report of the Executive Director it was mentioned that the rhythm of production was kept to a maximum degree with a minimum cost. As a result of that 75 710 t zinc SHG and 53 568 t lead were produced. The decreased quantity of lead is due to the general overhaul of the Lead Plant.

The revenues from sales of finished products in the year reached to almost BGN 232 mln compared to BGN 182 mln for 2003.

The Executive Director highlighted that irrespective of the objective difficulties, KCM SA kept its active investment policy. In 2004 BGN 12 569 ths were invested of which BGN 9 716 ths were utilized in actually started up projects.

The General Assembly of the Shareholders accepted the Audit Report for 2004 and reelected Ms Maria Dimitrova Georgieva to be a certified public accountant of the Company for 2005.

The shareholders approved the actions and decisions made by the members of the Managing and Supervisory Boards during the period of their management and voted to exonerate them from responsibility.

The General Assembly made a decision to reinvest the net profit amounting to BGN 4 096 ths. in the Company.

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