Annual report 2005 - Sava dd

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shareholders’ structure. After each Supervisory Board meeting the minutes of the meeting were prepared
and were adopted with a resolution.
Reporting by the Board of Management
In the 2005 business year reporting by the Board of Management enabled the Supervisory Board to suitably
implement its supervisory role. The reports by the Board of Management were usually produced according
to individual areas with a synthetic review of all business impacts. These involved the operations of the
divisions: Rubber Manufacturing with the Foreign Trade Network, Trade, Tourism, Real Estate and
Investment Finance, thereby enabling one to monitor the positive and negative effects of individual
operations of the Sava Group.
The Supervisory Board was also allowed to make a review of individual companies or production and
service programmes within individual divisions. The interest of the Supervisory Board primarily referred
to the business operations of larger companies and production programmes and the consolidated
statements of the entire Group.
In its reports the Board of Management presented all the most important categories that affect the business
of the joint stock company Sava. These are the categories of profit, turnover, costs, added value, etc.
Furthermore, comparative statements for the previous year and planned statements for the current and
future two years were added to the statement for 2005. In this way the Supervisory Board could
continuously examine the trend with respect to the past and planned business performance.
Business performance assessment
The Supervisory Board examined the business operations of Sava d.d. and the Sava Group during the year
based on the submitted 2005 Annual Report, which for the Sava Group was prepared in accordance with
International Financial Reporting Standards for the first time. By doing so the results and assets of the Sava
Group were presented in a more realistic manner, since the major part of assets was shown at the fair value
principle. The use of new standards had a favourable effect on the shown return on capital of the Sava
Group, which in 2005 surpassed 10 per cent as planned in the strategy for the year 2007. The equity value
presented in balance sheets of the Sava Group increased to more than €392 million or €193.8 per share.
Irrespective of the single effect due to the transition to new financial standards it is to be ascertained in
every case that the Sava Group in 2005 operated successfully and all key performance indicators of the
Group surpassed the planned value. The comparison of values and business indicators does not show a
suitable increase with regard to the past year, the reason being the negative goodwill shown under
revenues for the year 2004 on account of the purchase of companies operating under the Pannonian Spas
brand (it involved a single event connected with entering into the ownership structure).