Financial Performance Commentary

STRUCTURE OF ASSETS AND SOURCES OF FINANCING

Structure of Assets

Severočeské doly a.s. registered a rise in assets to CZK 22,426 million at year-end 2001, an increase of CZK 2,011 million on the end of 2000. The Company's assets were mainly covered out of its own sources of financing.
In 2001, receivables for subscribed capital of an original amount of CZK 142 million were paid by takeover of land from residual state enterprises.
Tangible fixed assets and intangible fixed assets rose by CZK 349 million to CZK 10,720 million. This increase was connected with the ongoing capital investment programme, focusing primarily on construction, supply, reconstruction, and modernization to ensure the operation of extraction activities at the mines. Financial assets (long-term and short-term)made the greatest contribution to the overall rise in assets. The increase in financial assets was driven by the year-on-year rise in cash flow. Financial investments increased by CZK 674 million to CZK 4,217 million. This growth reflects the expansion in the portfolio of bonds and new equity holdings (i.e. the investment into Coal Energy, a.s. and the establishment of the subsidiaries SD – 1.strojírenská and SD – Kolejová doprava). Short-term financial assets went up CZK 944 million to CZK 4,906 million and were composed primarily of the deposit instruments of selected financial institutions, bonds, and treasury bills.
Inventories declined CZK 19 million to CZK 79 million. At the end of 2001, the Company reported no long-term receivables. Short-term receivables registered a year-on-year rise of CZK 398 million to CZK 1,548 million, which was affected in particular by the provision of a loan to VÍTKOVICE – PRODECO and a non-monetary contribution into the new subsidiaries.
Other assets were down CZK 192 million year on year to CZK 956 million. Much of this reduction can be attributed to the realization of prepaid expenses emerging historically in connection with overburden accruals.

Sources of Financing

In 2001, there were no changes to the Company's registered capital, which remained at CZK 8,998 million.
The increase in funds created from profit by CZK 577 million to CZK 4,772 million was mainly the result of growth in the investment fund. The Company also added to its reserve fund, social fund, and fund for contributions to cities and towns, and established a provision for its capital participation in activities focused on reducing unemployment in the region.
The largest liability item is provisions, which registered year-on-year growth of CZK 556 million to CZK 4,596 million. This increase was the result of the ongoing concentration of financial resources to eliminate the effects of mining activity and the creation of a provision for repairs to tangible fixed assets.
A deposit received from BIG for coal supply and a non-monetary contribution to the Company's new subsidiaries contributed to the year-on-year rise of CZK 799 million in short-term payables.
It should also be mentioned that in 2001 the Company prematurely paid off its remaining bank loans, confirming its financial strength and stability.

Asset structure, 1997 – 2001 (CZK'000)	Liability structure, 1997 – 2001 (CZK'000)