New World Resources N.V. Jachthavenweg 109h 1081 KM Amsterdam The Netherlands www.newworldresources.eu Resources World New N.V. Annual Report and Accounts 2009 NWR Annual Report and Accounts 2009 The power of efficiency Group Overview Business Review Corporate Governance Financial Statements 01 Highlights 08 Chairman’s statement 54 Corporate governance 83 General information 02 NWR at a glance – our operations 10 Board and Senior Management 84 Directors’ report 04 NWR at a glance – our presence 14 Executive Director’s statement 69 Certain Relationships and Related 88 Consolidated income statement 06 Strategy – our focus 16 Driving efficiency and investment Party Transactions 89 Consolidated statement of The Productivity Optimisation 74 Material Contracts comprehensive income Programme 2010 (‘POP 2010’) 77 Directors’ Statement of 91 Consolidated statement of financial 18 Management Q&A Responsibility position 22 Industry overview 78 Remuneration Report 91 Notes to the consolidated financial 26 Business review statements 26 A cost effective and reliable 148 Non-consolidated income statement supplier 149 Non-consolidated statement 30 Investing in our future of comprehensive income 36 Expanding our reserve base 150 Non-consolidated statement 38 Sustainable development review of financial position 40 Delivering value through people 151 Non-consolidated statement 44 Financial review of changes in equity 48 Delivering value through technology 152 Non-consolidated cash flow statement 50 Risk management 153 Notes to non-consolidated financial statements 167 To the Annual General Meeting 168 Shareholder Information 171 Ancillary Information for Shareholders New World Resources N.V. (‘NWR’ or the ‘Company’)1 is Central Europe’s leading hard coal and coke producer. The Company produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, a.s., the largest hard coal Forward Looking Statements Certain statements in this document are not historical facts and are or are deemed to be “forward-looking”. The Company’s prospects, plans, financial position and business mining company in the Czech Republic. NWR’s strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by coke subsidiary OKK Koksovny, a.s. is Europe’s the use of forward-looking terminology including, but not limited to; “may”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “will”, “could”, “may”, “might”, “believe” or “continue” or the negatives of these terms or variations of them or similar biggest producer of foundry coke. terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company’s ability to control or Our focus predict. Forward-looking statements are not guarantees of future performances. Factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: Efficiency Investment Sustainability risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Company’s products and demand for the Company’s customers’ products; coal mine reserves; NWR’s operations are Our principal capital investment Our current reserves will remaining life of the Company’s mines; coal production; trends in the coal industry efficiently run. Our coal and programme, Productivity enable us to remain in and domestic and international coal market conditions; risks in coal mining operations; coke are quality products Optimisation Programme 2010 business for the long-run. Our future expansion plans and capital expenditures; the Company’s relationship with, and conditions affecting, the Company’s customers; competition; railroad and other and our services are noted (‘POP 2010’) has already made commitment to POP 2010 transportation performance and costs; availability of specialist and qualified workers; for their reliability. We have significant productivity gains, has helped improve our and weather conditions or catastrophic damage; risks relating to Czech or Polish law, strong and long-lasting improved efficiency and, productivity capabilities, regulations and taxation, including laws, regulations, decrees and decisions governing customer relationships. importantly, raised the safety access deeper coal seams the coal mining industry, the environment and currency and exchange controls All these factors help provide levels at our mining operations. and reduce costs – improving relating to Czech and Polish entities and their official interpretation by governmental a firm foundation for Additionally our Coking Plant our competitive position. and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are described the future. Optimisation Programme 2010 Coupled with opportunities in the Company’s annual report for the year ended 31 December 2009. (‘COP 2010’) remains on track, offered by our two rationalising our coking capacity development projects in Forward-looking statements speak only as of the date of this document. The Company through closing our Jan Šverma southern Poland, our expressly disclaims any obligation or undertaking to release, publicly or otherwise, site and modernising the sustainable growth any updates or revisions to any forward-looking statement contained in this report to Svoboda site, where we are remains sound. reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by refurbishing one coking battery applicable law. and building a new one. Amsterdam, 31 March 2010 1 NWR and its subsidiaries are collectively referred to as the ‘Group’ or the ‘NWR Group’. Board of Directors 01 1 1 Highlights Revenues (EUR million) EBITDA (EUR million) Group Overview 09 1,117 09 179 08 1,815 08 684 07 1,367 07 351 1 Operating prot (EUR million) Prot for the period (EUR million) BusinessReview 09 10 09 (62) 08 517 08 352 07 208 07 196 Coal sales (Mt) Coke sales (Mt) CorporateGovernance 09 10.1 09 0.7 08 11.4 08 1.1 07 12.1 07 1.3 1 2007 figures include Discontinued Operations (Electricity Trading). Financial StatementsFinancial ¼ Strong cash position Unrestricted cash of EUR 548 million as at 31 December 2009 ¼ EPS Adjusted loss per A share of EUR (0.25) ¼ POP 2010 Programme successfully completed NWR 2 ¼ Mining Lost Time Injury Frequency Rate Annual Report and Accounts 2009 Down 31 per cent in the last three years and 8 per cent in 2009 2 LTIFR = number of reportable injuries after three days of absence divided by total hours worked expressed in millions of hours. 02 NWR at a glance Our operations ¼ Central Europe’s leading hard coal and coke producer supplying 5.2 million tonnes of coking coal, 4.9 million tonnes of thermal coal and 0.7 million tonnes of coke in 2009.1 ¼ Strategically located mines and quality coal have made NWR a Czech coal leading and trusted supplier. business ¼ 418 million tonnes2 of JORC3 reserves. ¼ One of the Czech Republic’s largest industrial groups by assets and revenues and is one of the largest private sector employers. ¼ Four active coal mines run by OKD, a.s. (‘OKD’) and two coking plants producing blast-furnace and foundry coke run by OKK Koksovny, a.s. Coke (‘OKK’) in the Czech Republic. production ¼ Two major mining development projects in Poland. Reserve base2 Polish development 418Mt projects 1 Figures quoted do not include internal sales made by NWR to its subsidiaries. 2 As at 1 January 2009. 3 Full name: Joint Ore Reserves Committee. The Group currently uses both the FSU system and the JORC system in parallel to report reserves and resources. The Group employs a certified geologist who prepares the reserve numbers in accordance with JORC certified expert. Annual Report and Accounts 2009 4 As at 31 December 2009. NWR 03 Group Overview Key operations Assets Currently operating Development project BusinessReview Darkov Production in 2009 Four active coal mines owned via NWR’s subsidiary OKD. 11.0 million tonnes of Karviná coal produced in 2009 of which 5.2 million tonnes of coking coal and 4.9 ČSM 11.0Mt million tonnes of thermal coal were externally sold. Coking coal sales in 2009 were approximately 43 per cent hard Paskov coking coal and 57 per cent semi-soft. Thermal coal sales in 2009 were approximately 80 per cent coal and CorporateGovernance 20 per cent middlings. Production in 2009 OKK is the largest producer of foundry coke in Europe. It operates two plants in Ostrava, the Jan Šverma and Svoboda Svoboda StatementsFinancial facilities, which combined operate four 4 0.8Mt coking batteries totalling 226 chambers producing 0.8 million tonnes of coke in Jan šverma 2009. Svoboda is the largest of the two facilities. Coke sales in 2009 were approximately 45 per cent blast furnace coke, 25 per cent foundry coke and 30 per cent other applications. Proven and probable reserves in Dębieńsko Our Polish subsidiary, NWR KARBONIA Sp. z o.o. (‘NWR Karbonia’) oversees our two development projects in southern Morcinek Poland, Dębieńsko and Morcinek. In June 190Mt NWR 2008, NWR Karbonia was granted a 50-year licence to mine in Dębieńsko, Dębieńsko Annual Report and Accounts 2009 with 190 million tonnes of proven and probable reserves. NWR Karbonia is now in the process of applying for an amendment to its current ‘Dębieńsko 1’ mining licence to add further coal reserves to those already included in the currently held licence.