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Brexit, the political development in Turkey, the unsuccessful referendum in Italy and last not least the result of the presidential election in the United States – who had thought about these events at the beginning of the year 2016 and would have made an assumption for these events. We learned during this year that volatility, uncertainty and things that seem to be impossible to happen might occur and we developed a “new normality“ in 2016.

The areas of crises increase worldwide, there is no reduction in sight. The relationship to Russia is still suffering under the sanctions; the political frame conditions in Ukraine are unsolved as they are in Syria. Parts of West Africa are affected by terrorism and humanitarian catastrophes. Many questions raised in the years before are still unanswered. The number of refugees coming to Europe certainly decreased but on the other hand problems of integration, which is partly not wanted, increased compared to the year before. The politicsof cheap money which is affected as a burden for the future overlaps the real problems which are not solved at all. People feel that politics cannot match the problems arising out of digitalization in a world becoming more and more complex. The European Union is not unified at all and shows shortcomings and fragility of the legal construction of this Union. In this situation populist representatives try to offer simple solutions and are in many cases elected because of the attitude of protest among the citizens. This leads to additional destabilization of the situation.

Trading lives to a certain extent from changes and has to find new ways on a permanent basis. The first half of the year showed historically low commodity prices, also because of the expected rise of interest in the United States the US-Dollar developed strongly against the Euro. Especially in the second half of the year we saw an increase of commodity prices.

Under these circumstances  and frame conditions VA Intertrading could achieve a remarkable result. Despite difficulties in the economic circumstances the employees of VA Intertrading could increase the volumes traded on a continuous basis. The turnover shown in the yearly profit and loss account only increased to a small extent because of the price levels of the commodities traded being still relatively low. Continuing the
philosophy of careful and precautious valuation of the annual results the result of operation could be increased by 13,4 % to 12,71 million Euro.

An amount of 4,5 million Euro out of the profit from 2015 was attributed to the legal reserves. Through this the net equity permanently available could be increased by 12,16 % to 61,80 million Euro. Through this decision the already existing solid capital basis has been strengthened in order to be prepared for future
business possibilities.

The contracts between the shareholders were executed as scheduled. The transfer of shares from voestalpine
and RLB OÖ will be finalized in the middle of 2017 and it will show a stable majority of Austrian key shareholders being management and key employees.

The supervisory board has executed its function in supervising the managing board and supporting the management with advice. For this purpose the supervisory board got information in 4 meetings in 2016 and the key business cases and intended measures were discussed and decided. The board of management reported to the supervisory board in all of the meetings based on written information about the profits achieved and the general financial situation. On top of this the chairman of the supervisory board got information about the current business under
execution on a regular basis.

A special duty of the supervisory board was to follow the execution of the strategy decided for the steel department. The philosophy of concentrating on special business cases and corner stones of steel trading was continuously executed.

The supervisory board dealt with the content of contractual agreements existing with the individual members of the management, also the question of remuneration was checked on a regular basis. The supervisory board dealt with the leave of a member of the board and decided to nominate a new member of the board which will join the board in April 2017.

The duties of the audit committee were performed by the entire supervisory board. The committee met twice and discussed together with the auditors individual aspects of balance sheet and profit and loss account. In addition to the duties listed in § 92, article 4a of the Stock Corporation Act, especially the effectiveness of internal control systems and the systems for managing risk were supervised.

The accounts of VA Intertrading as per December 31, 2016 were audited by KPMG Austria Gmbh, Vienna, and the auditors issued an unqualified audit opinion.

The supervisory board expresses its sincere gratitude to all employees, the representatives of the works council and the management board for the work and success realized in the past year and the exceptional efforts shown.

Dr. Hanno Bästlein
Chairman of the Supervisory Board

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