SPP has been able to retain its leading position on the market by providing competitive offers to customers and by adding value in terms of reliability, flexibility and customer care.

Dr. Achim Saul

Content

Statement by the Chairman of the Board of Directors 6

Company Profile 8

Strategy and Goals of the Company 9

Board of Directors 10

Top Executive Management 12

Supervisory Board 14

Economic and Financial Performance 15

Capital Structure 17

Natural Gas Trading 19

Integrated Communication 27

Human Resources 28

SPP for the Future 30

Equity Holdings 41

Individual Financial Statement of SPP 42

Independent Auditor’s Report 44

Consolidated Financial Statement of the SPP Group 46

Independent Auditor’s Report 50

Contacts 52 Statement by the Chairman of the Board of Directors

SPP has been able to retain its leading position on the market by providing competitive offers to customers and by adding value in terms of reliability, flexibility and customer care.

Dear ladies and gentlemen,

2010 was a year with a very heterogeneous experience for SPP. The partial recovery of the Slovak economy throughout the year certainly had a positive impact on certain parts of SPP’s business. Rising demand for gas increased sales, as well as distribution and transport volumes on the market. SPP nevertheless faced its highest ever loss in respect of its gas supply activities. Significant part of these losses was derived from the company´s gas sales in the regulated segments of households and heating plants. In figures it meant loss before tax of over EUR 70 million. The sales prices set by the regulator for these segments dit not allow the company to recover its gas purchase and delivery costs, and so created a negative margin for each cubic meter sold. Given that regulated prices for 2011 also still do not allow the actual full cost to be recovered, SPP will again face losses, but this time they will be of an even higher magnitude than last year’s record loss unless some appropriate solution is implemented soon.

As representative of SPP, I can accept transparent and fair price regulation. Such price regulation, though, regardless of how exactly it is applied, essentially has to fully and duly take into account the real cost of the energy supply, while also allowing reasonable profit for the business in question. SPP is available to actively support ÚRSO in the development of a transparent and fair method for the new regula- tion period starting in 2012.

In non-regulated segments, SPP has been operating on a fully liberalized gas market. In 2010, price has probably become the most deci- sive criterion for customers when choosing their gas supplier. SPP has been able to retain its leading position on the market (82% market share) by providing competitive offers to customers and by adding value in terms of reliability, flexibility and customer care.

6 As a natural consequence of rising competition on the Slovak gas market, the company lost some customers for 2011. On the other hand, we succeeded in regaining some customers that we had previously lost. This gives us valuable feedback that many customers have been satisfied with SPP’s services and have decided to continue their business relationship with SPP. Complementing its domestic sales activities, SPP actively trades on neighbouring gas hubs in order to optimize its gas portfolio. SPP also managed to build up a successful business operation on the Czech market via its subsidiary SPP CZ, which currently ranks third on the Czech gas market in terms of import. In 2010, SPP was also able to expand its business portfolio in the Czech Republic even further by increasing its shareholding in SPP Bohemia to 100%.

In order to enhance its operational efficiency, in 2010 SPP focused on the reorganization of the company and strict cost management. As an example, SPP successfully implemented Slovakia’s largest ever car fleet outsourcing project in 2010. The SPP group also started aligning its organization in 2010 to the requirements set by the 3rd Energy Package, with the process to continue until 2012. In parallel, we use these necessary changes as an opportunity to further optimize our organisational structure and processes in general.

2011 will be a very decisive year for SPP. The Slovak government has to decide on the transposition of the 3rd Energy Package into national legislation. Three implementation models for achieving this are equally acceptable for the EU. The aim of the directive is to ensure non-discriminatory and transparent access to energy infrastructure. Whichever model is chosen, there will be no difference for Slovakia in terms of the degree of market liberalization achieved or the effect on gas prices. SPP shares the position of the Slovak Government declared in all past discussions on the EU level, which favours the so-called Independent Transmission Operator (ITO) model as the best one for Slovakia. Only under this model will Eustream be able to remain 100% within the SPP group and SPP be able to retain a size to keep it in the European Champions League of energy companies.

In line with its strong commitment to sustainability in energy supply and consumption, SPP has intensively promoted the efficient use of energy. In 2010 we offered our customers the option of consulting energy savings via our seven Customer Centres and our interactive web page www.sppporadimevam.sk. We continued to support the use of environmentally friendly CNG (Compressed Natural Gas) as a fuel for cars. Sales of CNG in Slovakia increased by 2.9% compared to the previous period, but in 2011 this trend might be negatively influenced by higher excise tax on natural gas as a fuel for CNG.

In 2010, SPP won the TOP Corporate Philanthropist award for the fifth time in a row. The key programme “Let’s renovate our house” aims to protect important Slovak cultural heritage. SPP also continued its long-lasting close cooperation with the Slovak Paralympic team, which confirmed its excellent quality and talent at the Xth Winter Paralympic Games in Vancouver, Canada. SPP also continued to support projects aimed at energy savings and at improving energy efficiency. All these projects serve as proof that the company acts as a socially responsible entity.

I am fully committed to caring for our most valuable capital - our employees. Skilled, motivated and loyal employees are crucial to face challenges and to achieve the company’s vision successfully. Apart from well-established tools of open communication, we gave employ- ees the incentive to play an active part in improving the working environment, enhance efficiency and improve the image of the company through their ideas and proposals. In 2010, the company agreed with the Trade Union on a new 3-year Collective Agreement with effect from 1st January 2011. I am confident that it provides our employees with the necessary benefits and security for the coming years.

I know that the good results in 2010 could only be achieved thanks to efficient teamwork, close cooperation and the strong commitment of all employees. I would therefore like to express my thanks to all employees for their responsible and efficient cooperation.

I would also like to express my gratitude to our customers, business partners and shareholders for the trust, loyalty and cooperation you have shown us.

I am confident that by ongoing and targeted improvement, the company can master challenging times and maintain the trust of our customers, business partners and employees.

Dr. Achim Saul Chairman of the Board of Directors

7 Company Profil

Slovenský plynárenský priemysel, a.s. (SPP) is a multinational energy company and a reliable supplier of energy and services. SPP directly follows on from over 150 years of gas industry in Slovakia.

Structure of SPP shareholders

Slovenský plynárenský priemysel, a.s. was established in 2001 by the transformation of a state-owned company. In 2002, the State sold a 49% share to strategic investors – German Ruhrgas (currently E.ON Ruhrgas) and French Gaz de France (currently GDF SUEZ), as a result of which SPP became an integral part of the largest family of energy companies in Europe.

The shareholders of Slovenský plynárenský priemysel, a.s. are the National Property Fund (51%) and Slovak Gas Holding – a consortium of the companies E.ON Ruhrgas and GDF SUEZ (49%).

Slovak Gas Holding (E.ON Ruhrgas and GDF SUEZ) 49%

National Property Fund 51%

8 Strategy and Goals of the Company

The mission of SPP is to provide reliable and competitive supplies of energy to Slovak and interna- tional customers.

SPP’s vision is to be one of the leading energy groups in the region of Central and Eastern Europe by strengthening the trust of its cus- tomers and business partners through quality, safe and reliable energy supplies and services, as well as the technical know-how and professionalism of our employees. We offer solutions for saving energy and we support initiatives oriented on sustainable development.

In the context of constant changes in the business environment and trends in the energy sector, SPP pursues the following strategic goals:

n to strengthen our customer orientation in order to stabilise the customer portfolio and ensure long-term and reliable supplies of natural gas to SPP’s customers,

n to increase the sales of natural gas on other markets and to enter the market with other energies,

n to improve all support processes and services within the company so that they support the strategy of the company’s core activities to the maximum possible extent,

n to contribute to the creation of a fair, transparent and competitive business environment,

n to develop the entrepreneurial activities of SPP in related energy sectors with the goal of supporting sales

of natural gas as an environmentally-friendly commodity with the lowest production of CO2 among all fossil fuels,

n to develop projects for utilising renewable energy sources, which in addition to lowering energy depend- ency and increasing the energy security of Slovakia, contribute significantly to reducing emissions of pol- lutants into the atmosphere,

n to implement the 3rd Energy Package without SPP losing value.

9 Board of Directors as of 31st December 2010

Dr. Achim Saul, Chairman of the Board of Directors. He studied heat and process engineering at Ruhr University in Bochum (Germany). After receiving his doctorate, he first worked in the car industry and later in 1988 joined the Technical Development Department in Ruhrgas AG (Essen). In 1991 he moved to the Technical Controlling Department and three years later to the Gas Purchasing Division, where he took charge of coordinating the projects in Central and Eastern Europe. From 1996 he was responsible for gas sales and acquisition projects in Central and Eastern Europe. He was a Member of the Supervisory and Executive Bodies in the Czech and Slovak affiliates of E.ON Ruhrgas AG. In 2005 he was appointed the General Director of E.ON Gaz Romania, where he became the President of the Administrative Board in June 2007. Since March 2008 he has been a Member of the Board of Management of E.ON Ruhrgas International AG in Essen, exercising mandates in several affiliated European gas companies. He has been a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. since December 2009. He became the Chair- man of the Board of Directors of SPP, in July 2010. At the same time he has been a Member of the Board of Trustees of Nadácia SPP.

Ing. Štefan Slezák, MBA, Vice-Chairman of the Board of Directors. He graduated from International Trade at the University of Economics in Bratislava in 1997. In 1998 he acquired MBA degree at Nicholls State University (USA). He started his carrier as a credit analyst with RZB Finance in New York. From 2004 to 2006 he was acting as the Vice-President with NIB Capital in London. From 2007 to 2008 he managed the corporate development and strategy in Východoslovenská energetika (Eastern Slovak Power Engineering Company). Since 2009 he has been executive Head of Lalix Investment Management. He became the Vice-Chairman of the Board of Directors of Slovenský plynárenský priemysel, a.s. in September 2010.

Dipl. Ing. Jean-Jacques Ciazynski, Member of the Board of Directors. He graduated as an engineer at the Mining School in Nancy (France) in 1976. He joined Gaz de France in 1978 where he held various positions in the Transmission and Storage Division and later moved to the management of national dispatching. In 1993 he started working in the International Division of Gaz de France as the Direc- tor of the Branch Office in Slovakia. Between 1995 and 1997 he was a Member of the Board of Directors of POZAGAS a.s. In 1997 he returned to France and worked in the Research Centre of Gaz de France and later in the transmission subsidiary of Gaz de France as the Director of the Western and Central Region of France. In July 2006 he became the Chairman of the Board of Directors of NAFTA a.s. Since September 2008 he has been a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. (SPP). Since July 2009 until June 2010, he was the Chairman of the Board of Directors of SPP. Since July 2010 he has been a Member of the Board of Directors of SPP.

Dipl. economist Frédérique Dufresnoy, MBA, Member of the Board of Directors. In 1988 she graduated both from the Lyon Graduate School of Business in France and with a MBA from the University of Texas at Austin (USA), major in Finance. She started her career as a business developer for Alsthom selling small turnkey powerplants mainly in Asia and Europe. Then moved on into banking from 1991 to 1999, working successively with two French institutions in project finance, primarily in energy (both gas and electricity). She joined Gaz de France in May 1999, first in Mergers & Acquisitions, then in the Initial Public Offering team. She was named a Head of Financing of Gaz de France in January 2005 and sub- sequently the Chief Financial Officer of Gaz de France’s International Branch in September 2007 (which became GDF SUEZ Energy Europe Division in July 2008). She has been a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. since February 2010.

10 Ing. Vladimír Klimeš, Member of the Board of Directors. In 1980 he graduated from the Slovak Technical University as a civil engineer. Already during his studies he worked in daily Šport and Smena. In 1980’s he was acting in daily newspaper Práca, where he as economic reporter devoted especially to building of big industrial entities mainly in the energy sector. In 1991 he became the Deputy Editor-in-chief and two years later also the Director and an Executive Head of Práca s.r.o. He was establishing the weekly about economy and business TREND. Since 1997 he has been the Executive Head and Director of one of the companies of publishing group TREND holding, which publishes also the weekly TREND and he is also a Member of the management. He has been a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. since September 2010.

Dr. Hans-Gilbert Meyer, Member of the Board of Directors. He completed his mining engineering studies at the Technical University of Clausthal (Germany) in 1987, where he also received his doctorate in 1991. His professional career began at the Mining Institute of the Technical University in Clausthal in 1987 in the position of research scientist. From 1988 he worked as a Chief technician and academic counsel. In 1991 he started in the gas business when he joined E.ON Ruhrgas AG in Essen (Germany). He gradually worked as a Gas Sales Analyst and Project Manager, where he was involved in the activities of the consortium formed by German gas companies for cooperation with the Russian gas distribution industry. From 1995 he was a Head of Gas Sales Section and a Member of the top management at the company. Between 2004 and 2007 he was the Managing Director of E.ON D-Gas B. V. in the Hague with responsibility for the storage business, wholesale and sales of natural gas to industrial customers. At the same time, he was a top manager in several other subsidiaries of E.ON Ruhrgas Group. He has been a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. since November 2007.

Ing. Juraj Ondris, MBA, Member of the Board of Directors. In 1997 he graduated from the University of Economics in Bratislava and in 2004 he acquired MBA degree. Since 1998 he has been working in Slovenský plynárenský priemysel, a.s. Until 2001 he was contractual relations officer, in 2001 to 2004 he was active as a Head of New Business Natural Gas Deals Unit. In 2004 he was appointed to the position of Planning and Risk Management Section Director. He has been a Member of the Board of Directors of SPP since September 2010.

Dipl. Ing. Jean-Jacques Ciazynski was the Chairman of the Board of Directors until 30th June 2010. Dipl. economist Frédérique Dufresnoy, MBA has been a Member of the Board of Directors since 10th February 2010. Ing. Štefan Slezák, MBA has been the Vice-Chairman of the Board of Directors since 3rd September 2010. Ing. Vladimír Klimeš has been a Member of the Board of Directors since 3rd September 2010. Ing. Juraj Ondris, MBA has been a Member of the Board of Directors since 3rd September 2010. JUDr. Anton Novák was the Vice-Chairman of the Board of Directors until 2nd September 2010. Ing. Robert Zadora was a Member of the Board of Directors until 9th February 2010. Ing. Ján Dudášik was a Member of the Board of Directors until 2nd September 2010. Ing. Rastislav Kupka was a Member of the Board of Directors until 2nd September 2010.

11 Top Executive Management as of 31st December 2010

Ing. Martin Bartošovič, Corporate Affairs Division Director. He graduated from the Faculty of Economics and Management of the Slovak University of Agriculture in Nitra in 1996. During his university studies he completed scholarship programmes at West Virginia University in Morgantown (USA) and the programme run by the A. Mellon and G. Soros foundations at the Institute of Economic Studies in Nitra. After graduating from university, he worked in ING Barings as a Management Trainee and later as an Account Manager. In 1998 he started working as a Consultant for A.T. Kearney in Prague. In this leading global consulting firm he participated in projects for renowned international financial institutions and com- panies in the field of energy and transport. He has been working in Slovenský plynárenský priemysel, a.s. since 2004, starting as the Strategy, Corporate Development and Procurement Section Director. Since 2008 he has been the Corporate Affairs Division Director. He has also been the Chairman of the Board of Directors in SLOVGEOTERM a.s. since 2007.

Ing. Rastislav Bráblik, Services and Central Functions Division Director. In 1995, he graduated in Machine Engineering Technology with specialisation in the welding of plastic materials at the Faculty of Materials Science and Technology of the Slovak University of Technology in Trnava. From 1995 he worked in the branch plant of Slovenský plynárenský priemysel, a.s. in Nové Mesto nad Váhom in the field of investments. After six years in the company he became a Head of the Technical Preparation and Reconstruc- tions of Local Networks Unit. In June 2001 he moved to the headquarters of SPP to take up the post of an Acquisition Project Manager, specialising in the project for construction and operation of gas networks in the selected areas in Croatia. In this period he also served as an Executive Officer in Ekomil, a company through which the project was implemented. From March 2003 he participated as a Specialist in the restructuring of SPP with regard to the entry of a strategic investor to the company. In 2004 he held the position of the Asset Management Section in Distribution Division Director and also worked on the project for legal unbundling of the operators of transmission and distribution networks from the natural gas trader. Between 2005 and 2008 he worked as the Assets Division Head, focusing on the preparation and implementation of investment projects in the transmission and distribution network. Since October 2008 he has been the Services and Central Functions Director.

Ing. Libor Briška, Economy and Finance Division Director. He graduated from the Faculty of Mechanical Engineering of the Slovak University of Technology in Bratislava in 1993, while he started working in the field of finance even during his studies. He gradually held various positions in companies such as Bratislava Option Exchange, Creditanstalt Securities and J&T Finance Group. He joined Slovenský plynárenský priemysel, a.s. (SPP) in December 1998. His career in the gas industry started in the position of Director of Finance Section and since July 2001 he has been the Economy and Finance Division Director. Between 1999 and 2002 he was a Member of the Board of Directors in NAFTA a.s., a subsidiary company, and between 2001 and 2002 he was a Member of the Board of Directors of SPP. Since 2003 he has also held the position of Chairman of the Board of Directors in P R O B U G A S a. s.

12 Top Executive Management as of 31st December 2010

Ing. Stanislav Hodek, Information Technology Division Director. He graduated from the Faculty of Electrical Engineering of the Slovak University of Technology in Bratislava in 1986. He received his first work experience in Chemické závody Juraja Dimitrova in Bratislava, which he eventually left for the banking sector. He worked for approximately eight years in Československá obchodná banka and later for the same period in ING Bank. He held various positions, from a Project Manager to the Operations Director in both countries – Slovakia and the Czech Republic. Since July 2003 he has been the Information Techno- logy Division Director in Slovenský plynárenský priemysel, a.s. (SPP). He is also the Chairman of the Board of Directors in InfoGas, a.s., a 100% subsidiary of SPP that provides information technology services.

JUDr. Viera Ottová, LL.M., Human Resources Division Director. In 1984 she gradu- ated from the Faculty of Law at Comenius University in Bratislava. In May 2009 she defended her dissertation work at Masaryk University in Brno under a study course organised by Nottingham Trent University, receiving her Master of Laws (LL.M.) degree. After completing her university studies, she worked as a corporate lawyer and later joined the field of commercial law. Her career in human resources began in Kraft Jacobs Suchard and later in Philips in the Netherlands, where she worked as a Human Resources Manager and also helped prepare for the establishment of a production operation in Slovakia. Between 1996 and 2003 she worked in the telecommunications field in Globtel as the Human Resources Department Director, this from the very start of the company’s operation on the Slovak market. Since 2003, she has held the position of the Human Resources Division Director in Slovenský plynárenský priemysel, a.s.

Ing. Dušan Randuška, MBA, Gas Trade Division Director. He graduated from Foreign Trade at the Faculty of Commerce of the University of Economics in Bratislava. In 1997 he completed his MBA studies at the Webster University in Vienna. Between 1987 and 1998 he worked in foreign gas com- panies in the field of natural gas trading in the Czech Republic and Austria. Until October 2000, when he joined Slovenský plynárenský priemysel, state enterprise, he founded and managed a company representing British manufacturers of gas and energy machinery and equipment. In 2001 he became a Member of the Board of Directors of Slovenský plynárenský priemysel, a.s. (SPP). Since January 2001 he has served in SPP as the Gas Trade Division Director. He has worked in the statutory bodies of several subsidiaries of SPP. Since November 2008 he has been a Member of the Board of Directors of SPP CZ, a.s., a company specialising in selling natural gas on the Czech market.

13 Supervisory Board as of 31st December 2010

Ing. Peter Paulen, Chairman of the Supervisory Board until 27th October 2010. He graduated from the Faculty of International Economic Relations at the Moscow State Institute of International Relations. In 1980 he started as a Sales Officer in Transakta, a foreign trade company. Between 1998 and 2004 he served as an Ambassador Extraordinary and Plenipotentiary of the Slovak Republic in the People’s Republic of China, Mongolia and the Democratic People’s Republic of Korea. Later he worked in the Office of the Slovak National Council and at the Slovak Ministry of Foreign Affairs. Since 2005 he has chaired the Administrative Board of the Slovak-Chinese Trade Council and has served as the Director of the Confucius Institute in Bratislava. Since 2007 he has been a Member of the Board of Trustees of Nadácia SPP. Since February 2007 until October 2010 he was the Chairman of the Supervisory Board of Slovenský plynárenský priemysel, a.s.

Eric Stab, Vice-Chairman of the Supervisory Board

Members: Prof. Ing. Peter Baláž, PhD. Arpád Csuri Ing. Juraj Horváth Ing. Valéria Janočková Ing. Peter Kováč Ing. Robert Maguth Ing. Ján Manduľák Ing. Jozef Polačko Ing. Daniel Šulík Viera Uhrová

The position of the Chairman of the Supervisory Board was not occupied since 28th October 2010 until 31st December 2010.

Dr. Ulrich Schöler was the Vice-Chairman of the Supervisory Board until 30th June 2010. Alena Bakanová, Mgr. Július Kázsmér and Ing. Richard Vadkerty were the Members of the Supervisory Board until 16th June 2010. PhDr. Eva Dušičková, RNDr. Peter Kršjak, Jaroslav Ninčák, Ing. Vladislav Ščešnák and Ing. Ján Wallner were the Members of the Supervisory Board until 27th October 2010. JUDr. Ernest Valko, PhD. was a Member of the Supervisory Board since od 28th October 2010 until 8th November 2010.

14 Economic and Financial Performance

The global economic crisis that has been affecting all sectors of the economy in recent times has also contributed to instability and uncertainty in the business environment in 2010. The persistence of the impacts of the crisis in 2010 saw the emergence of local crises inside the Eurozone, which then contributed to an even more unpredictable future trend. SPP managed to mitigate and even eliminate the negative impacts of these complex conditions in the business environment, which were also characterised by a strongly competitive environment, mostly by concentrating on improving its performance thanks to the continuous reinforcement of its customer orientation, optimisation of internal processes and by strict cost management.

Business Environment Development

The year 2010 was mostly characterised by unstable development of energy prices and counteractive trends on the foreign exchange market.

The unstable events on the foreign exchange market, already affected by the ongoing global economic crisis, were further multiplied in the Eurozone by the emergence of local crises arising in the course of the past year. Financial problems, which certain Eurozone countries had to face during the year, did not go unnoticed and were also reflected in the exchange rate of the euro against the US dollar. While in the first quarter the trend followed the previous year’s trend of the euro gradually weakening, already in the last months of the first half of the year we saw a sharp decline in the exchange rate. The trend reversed in the second half and the trend of a weak euro was replaced by the currency strengthening, accompanied by considerable volatility. At the end of the year, the trend once again changed and the increase was replaced by decline.

The impacts of the ongoing economic crisis also affected the commodity market in oil and oil products, the development of which showed an unstable tendency in the course of 2010. The start of the year saw a reversal in the form of rising oil prices, which persisted throughout the first quarter. Later, prices began dropping temporarily, but already by the end of first half the trend of rising oil prices returned and stayed with slight volatility until the end of the year.

The development of oil and oil product prices eventually manifested with a certain time delay in natural gas purchase and sale prices. In 2010, an unusual situation occurred on the European gas market accompanied by the emergence of an anomaly in the form of decou- pling of gas prices from oil prices.

The strong sensitivity of the gas market to climatic conditions significantly affects gas trading and, so also the financial results of the company. Although 2010 produced typically cold weather in the winter months, the average temperatures for the whole heating period of the year stayed above the long-term average.

In addition to monitoring and reacting to the latest changes resulting from complex market conditions, the priority for SPP in the last year was to continue adopting measures to prevent a gas crisis repeating itself. In addition to increasing gas reserves in underground storage facilities and diversification contracts signed with E.ON Ruhrgas and GDF SUEZ back in 2009, SPP created a third pillar for securing itself in the event of an interruption in gas supplies from the Russian Federation. The company eustream, a.s., a 100% subsidiary of SPP, technically secured the possibility of using the reverse flow of gas from the Czech Republic and Austria if necessary. At the same time, it is preparing a gas interconnector with Hungary, with efforts also aimed at establishing a gas interconnector between the Slovak Republic and Poland. With these measures, the safety and reliability of gas supplies to the Slovak market has increased and SPP is capable of guaranteeing stable and unrestricted gas supplies to all its customers under even unpredictable circumstances.

15 Economic and Financial Performance

Individual Results of SPP

In 2010, SPP generated revenues from the sale of products and services amounting to EUR 2,668 million, which was an increase of EUR 137 million compared with the previous year. The achieved revenues were primarily influenced by higher revenues from gas sales, corresponding to the year-over-year increase in sales volume, but also by the development of external factors affecting purchase prices and margins in individual segments. The conclusion of new contracts with other domestic and foreign business partners also had an impact on the amount of sales revenue and the volume of sold gas.

Operating costs (not counting income tax) amounted to EUR 2,540 million, which was a year-over-year increase by EUR 410 million. Key items comprised gas purchase costs, depreciation and amortisation, gas storage costs and personnel costs. Higher gas purchase costs related to the development of external factors that affected purchase prices.

Profit from financial operations before tax, which reached EUR 338 million in 2010, was particularly influenced by profit from invest- ments totalling EUR 347 million (composed mainly of dividends from subsidiaries and interest income). Compared with the previous year, the profit of SPP from financial operations was up EUR 96 million.

For the 2010 fiscal year, SPP posted a pre-tax profit of EUR 466 million, which is EUR 177 million down over the previous year. The total income tax liability amounted to EUR 23 million, of which current tax represented EUR 36 million and deferred tax (for the current period) EUR -13 million. Profit after tax came to EUR 443 million, representing a year-over-year decrease of EUR 126 million.

Comparison of After Tax Profit Structure (in EUR million)

2010 2009

Revenues from sale of products and services 2,668 2,531

Operating expenses -2,540 -2,130

Profit from financial operations before tax 338 242

Profit before tax 466 643

Income tax -23 -74

Profit after tax 443 569

16 Capital Structure

The company’s total assets came to EUR 7,250 million as of the balance sheet date and increased by EUR 435 million (index of 1.06) compared with the previous period.

Non-current assets amounted to EUR 6,219 million. The major items in non-current assets were buildings, plants, machinery and equip- ment (including unfinished capital construction) and investments in subsidiaries, joint ventures and affiliate companies. The share of non- current assets in total assets reached 85.8%.

The buildings, plants, machinery and equipment decreased by EUR 87 million (index of 0.97) in net book value compared with the balance as of 31st December 2009.

Capital expenditures reached EUR 378 million in 2010. These funds primarily went to the development and reconstruction of the trans- mission network, information technology, environmental and other constructions and financial investments.

As of the balance sheet date, current assets consisted of receivables, inventories, cash and cash equivalents and other current assets. The volume of current assets reached EUR 1,031 million and their share in the value of total assets came to 14.2%.

Assets Structure Comparison (in EUR million)

Current assets Current assets 1,031 786 14.2% 11.5%

2010 2009

Non-current assets Non-current assets 6,219 6,029 85.8% 88.5%

Shareholders’ equity amounted to EUR 5,374 million, representing 74.1% of company resources. In addition to registered capital, this consisted of statutory funds, reserves from revaluation and retained earnings. Shareholders’ equity fell by EUR 352 million on a year-over- year basis, mostly due to the drop in retained earnings.

Registered capital of the company comprised the capital registered in the Companies Register in the amount of EUR 1,736 million. It consists of 52,287,322 ordinary shares with a nominal value of EUR 33.19.

SPP Shareholder Structure as of 31st December 2010

National Property Fund 26,666,536 shares 51.0%

Slovak Gas Holding B.V. 25,620,786 shares 49.0%

17 Capital Structure

The balance of the statutory reserve fund reached EUR 347 million as of 31st December 2010.

Total liabilities amounted to EUR 1,876 million, recording an increase of EUR 787 million compared with the initial balance, while the increase was caused by a higher credit balance. Total liabilities comprised long-term liabilities amounting to EUR 1,078 million and short- term liabilities amounting to EUR 798 million.

Comparison of the Resources Structure (in EUR million)

Liabilities Liabilities 1,876 1,089 25.9% 16.0%

2010 2009

Equity Equity 5,374 5,726 74.1% 84.0%

18 Natural Gas Trading

The Changing Gas Market

In 2010, the gas market, both in Slovakia and across Europe, was particularly characterised by a surplus of supply over demand, which resulted in a substantial decrease in gas prices on spot markets and the so-called decoupling of gas prices from oil prices. The Slovak gas market does not function autonomously, but rather within the context of a far bigger European market that many players operate on and in which large gas volumes are traded daily. That is why this market is now much more dynamic and less predictable than in the past. A major change on the Slovak market in 2010 came in particular with the entry of competition to the small and medium consumers segment.

Importance of Flexibility and a Competitive Offer

SPP managed to quickly react to new market conditions and adapt its offer from the viewpoint of price and products tailored to customer needs in order to do well in the strong competitive environment. In the aspects of reliability, availability and premium standard of service (presence in regions, call centre, 19 customer centres), SPP held onto its position as clear leader in the past year.

SPP – Reliable and Long-term Partner in the Gas Industry

When creating an offer for its customers, SPP has four tools available: a long-term contract with Gazprom export, diversification contracts with GDF SUEZ and E.ON Ruhrgas, which can cover up to 20% of annual gas consumption in Slovakia, gas reserves in underground storage systems and short-term spot transactions at gas hubs. Thanks to these tools, we are able to guarantee competitive and safe sup- plies of natural gas for our customers under any circumstances.

SPP Developing Activities outside Slovakia

SPP continues intensively with its endeavour to develop activities outside the Slovak Republic. At the end of 2008, we successfully entered the Czech gas market through our subsidiary SPP CZ and in the first year already, i.e. for 2010, we attained a strong market position with a sales volume of approximately 570 million m3.

Our Customers

Allowing our customers to fully enjoy all the advantages of natural gas as an energy source remained of primary importance to us also in 2010.

In addition to safe and reliable supplies, we offered consumers our professionalism and experience, gained through many years of ope- rating on the natural gas market. By doing so we met our goal to secure flexible solutions for customers that addressed their needs by continuously broadening the portfolio of products and services. The results achieved in 2010 confirmed once again that SPP’s offer stands up well even in the face of competition.

Large Customers

We serviced the large businesses segment in the form of individual care provided by our sales managers, who assisted customers in selecting optimal solutions for their business at a competitive price. The offer, which we prepared in contractual and price products, reflected both basic and specific requirements of large commercial customers, while we also produced tailored-made solutions.

When creating complementary products, we took into consideration all the business specifics of our customers. Through the product series SPP PORADÍME VÁM (SPP ADVISING YOU) we offered the individual consulting activities of SPP technical specialists – so-called energy consulting, and through SPP BEZ STAROSTÍ (SPP WITHOUT WORRIES) we offered the services of SPP’s Alliance Partners.

We offered non-profit organisations a financial contribution from the non-investment fund EkoFond for projects that supported protection and creation of the environment and energy efficiency.

19 Natural Gas Trading

Small Customers and Organisations

Taking care of customers from the segment of small businesses was secured through special service channels such as the Business Line on 0850 111 565, the e-mail address [email protected] and 19 Customer Centres of SPP, with the option of preferential handling of customers from this segment. In 2010, we broadened the portfolio of contractual and price products for the segment of Small Customers and Organisations. In addition to the standard offer of M1 – M4 tariff products, customers had the option of selecting products that reflect their specific needs – Výhodne 12, 24 (Advantageous 12, 24), Výhodne Extra 12, 24 (Extra Advantageous 12, 24) or to contract for them- selves the Fixed Price product.

From complementary products and services, we recommended our customers to use the services of our Alliance Partners through the SPP BEZ STAROSTÍ (SPP WITHOUT WORRIES) product series, preventive inspections as part of SPP BEZPEČNE (SPP SAFELY) and the services of our technical specialists as part of the product SPP PORADÍME VÁM (SPP ADVISING YOU).

z“’:B—„—ˆê–Œ±êŽ’EŽ’ê–ê‘„Œê˜Oˆ—•B—ˆê ™’ꙄO’ê“’‡‘ŒŽ„‘B

|Oˆ—•Œ—ˆê–êzwwê„Wꇒê™UOŽœê¡ªêÜêê†ˆ‘œê „Ꝉ‘U꓏œ‘±ê„ê—’ê“’‡E„Ꙝ •„‘>‹’ê zwvy€ê ‘’™>‹’ê“•’‡˜Ž—˜®ê ■ }U‹’‡‘ˆê¡¢ „WꇒꡪêÜ ■ }U‹’‡‘ˆê¢¤ ■ }U‹’‡‘ˆêl›—•„ê¡¢ ■ }U‹’‡‘ˆêl›—•„ê¢¤ê ™U‹’‡‘ˆ‘5ꆈ‘„ꝄꝈ‘U꓏œ‘ê’“•’—Œê„Ž—˜5‘ˆê†ˆ‘‘BŽ’™ˆê†ˆ‘ˆê ˜‡ˆê “•ˆê™5–꓏„—ŒPꓒ:„–ꆈ>‹’ê’ ‡’ Œ„ꡢꄏˆ ’ꢤꐈ–Œ„†’™Ã­ •Œ„‡ˆ‘Œˆê“•’‡˜Ž—˜êˆê ˆê„ŽU†‹Ž’E™ˆŽê“’“„—Ž’™­

}Œ„†êŒ‘‰’•5†ŒBê’ꘙˆ‡ˆ‘U†‹ê“•’‡˜Ž—’†‹êB–Ž„—ˆ® ■êꑄꚚš­–““­–Ž± ■êꑄêiŒ‘Œ–ꏌ‘Žˆêzwwꪨ¥ªê¡¡¡ê¥¦¥ê™ê“•„†’™‘U†‹ê‡G’†‹ê™ê:„–ˆê§­ªªêÀꢪ­ªªê‹’‡­±ê ■ ‘„ꈾ„Œ’™ˆê„‡•ˆ–ˆ®ê Œ‘Œ–Œ‘Ž„Í–““­–Ž±êê ■êê™ê5Ž„‘B†Žœ†‹ê†ˆ‘—•5†‹êzwwꓒꆈ’êz’™ˆ‘–Ž˜­

20 Natural Gas Trading

Households

High quality and convenient handling of customers from this segment is secured by the SPP Customer Line through the 0850 111 363 phone number, the fax number + 421 2 5869 9000 and the [email protected] e-mail address. Our employees were also available to customers at 19 SPP Customer Centres. At the end of the year we opened 3 new service points in the premises of our Alliance Partners, so-called Infocentres. We also publish all necessary information relating to the offtake of natural gas and the complete product portfolio on our website at www.spp.sk.

The most successful offer realized for households in 2010 was the EkoBonus campaign. It involved contributions for households from the EkoFond, n.f., for the purchase of a new gas condensation boiler with maximum output of 30 kW. Of the total number of 2,136 applications, 1,847 applicants received the financial contribution.

In 2010, customers were able to select from 4 tariff products based on their consumption volume – D1 (Cooking), D2 (Water heating), D3 (Heating) and D4 (Heating maxi) and, at the same time, to select a suitable payment frequency – Klasicky (Classic) – monthly or Pohodlne (Convenient) – quarterly, semi-annually or annually. SPP also offered its customers the choice of several payment methods, i.e. through Plynkaso (or some other debit order), but also in the form of bank transfer, postal order or SIPO.

From complementary products and services, customers were able to use the Plynoúver (Gas Credit) product, which emerged out of cooperation with UniCredit Bank. For customers from this segment it was also very beneficial to use the services of our Alliance Partners through the SPP BEZ STAROSTÍ (SPP WITHOUT WORRIES) product series.

The SPP BEZPEČNE (SPP SAFELY) product series covers preventive inspections of gas appliances, the goal of which is to ensure safety and optimal operation of all gas equipment in our customers’ homes. Last year, we also provided a helping hand to families affected by floods. Together with our Alliance Partners we contributed not only by giving advice, but also by providing extraordinary assistance in the form of discounts on the purchase of new gas appliances, accessories or spare parts.

The main tool for providing advice under the SPP PORADÍME VÁM (SPP ADVISING YOU) product series was the website www.sppporadimevam.sk. In 2010, we developed the new Expert Advisory Centre application, which allows electronic communica- tion between customers and our technical specialists. The further broadening of services came with the introduction of a personal form of consulting at 7 Customer Centres of SPP once a week.

Cities and Municipalities

We also provided individual care to cities and municipalities through our sales managers and also through special service channels such as the Business Line 0850 111 565, the e-mail [email protected] or by arranging preferential handling at 19 Customer Centres of SPP.

We offered comprehensive solutions for arranging the gas supply to local governments. We reacted to individual customer requirements through SPP BEZ STAROSTÍ (SPP WITHOUT WORRIES), SPP BEZPEČNE (SPP SAFELY) and SPP PORADÍME VÁM (SPP ADVISING YOU) product series.

In the past year, we continued our support in developing environmentally-friendly transport based on CNG. Our activities mostly included consulting on the possibilities of using CNG in transport and the preparation of projects for converting the vehicle fleet of municipalities to run on CNG. We can also offer cities and municipalities the contractual supply of CNG, testing of CNG fuel and assistance in the construc- tion of CNG filling stations. The municipalities had the chance to draw a financial contribution from the EkoFond, n.f., for the purchase of CNG vehicles.

Other financial contributions from the EkoFond, n.f., to projects implemented by municipalities represented another key form of assist- ance. Mayors have the opportunity of securing funding for their municipalities for the installation of progressive technologies for combined production of electricity, heat and cold based on natural gas – co-generation and tri-generation units, for insulating buildings, replacing windows and regulating heating systems in public buildings, but also for pilot projects of organisations focusing on the utilisation of in- novative technologies based on natural gas.

The novelty in 2010 was the participation of SPP in the European Union’s Week of Sustainable Energy Europe Campaign, and this through implementation of the Energy Day project. As part of this activity, we organised an expert seminar for representatives of cities and municipalities and the Open Day in selected premises of SPP.

21 Natural Gas Trading

Support for Development of Natural Gas Utilisation in Transport

In 2010, SPP continued actively supporting the development of compressed natural gas (CNG) utilisation in the field of Slovak transport. The legislative change allowed us to install self-service CNG filling systems at all CNG filling stations operated by SPP. The end of the year witnessed the preparation and approval of the amendment to Act no. 609/2007, which repealed the exemption of CNG from excise tax and from 1st January 2011 CNG is subject to excise tax at a rate of 0.141 EUR/kg.

The trend in the a year-over-year increase in CNG sales continued in 2010, being higher by approximately 180,000 kg compared with 2009, representing a year-over-year increase of 2.9%.

22 Natural Gas Trading

CNG Production and Sales in 2004 - 2011 (in kg million)

2004 2,986 2005 3,723 2006 4,459 2007 4,873 2008 5,600 2009 6,200 2010 6,378 estimate 2011 6,600

Compared with 2009, in 2010 we recorded a higher number of CNG-powered vehicles, which SPP contributed to by continuing with the conversion of operated vehicles to CNG and also by implementing the “Test CNG with us” project, in which we provided our customers, partners, businesses and the public at large with the chance of testing the properties of CNG as a fuel on 11 vehicles powered by CNG from serial production.

23 Natural Gas Trading

Number of CNG-Powered Vehicles in Slovakia in 2004 - 2011 (units)

1 000 950 823 800

600 600 584 489 447 400 380 334 350 326 311 279 267 273 239 226 211 200 189 180 158 141 115 68 90 0 2004 2005 2006 2007 2008 2009 2010 estimate 2011

Buses Others Total

In 2010, we made the following major investment and cost projects for boosting CNG:

n pilot project for the construction of a public CNG filling station at Slovnaft, a.s. fuel station in Komárno,

n construction of public CNG filling station at the SPP Local Centre in Nové Mesto nad Váhom,

n replacement of vehicles operated by SPP Core Group companies – 265 CNG-powered vehicles were in operation at the end of 2010,

n implementation of the self-service CNG filling system at all filling stations (CNG FS) of SPP – ope- ration of all CNG FS in non-stop mode; change to the organisation and management of CNG sales and operation of CNG FS,

n implementation of the centralised settlement system (clearing) for CNG sales,

n implementation of the information system for remote monitoring of CNG FS – inspection and record- keeping of basic operating parameters of CNG FS in real time from the workplace of an CNG FS operating dispatcher,

n “Test CNG with us” project – testing of CNG as an alternative fuel for businesses and the public.

24 Natural Gas Trading

CNG Filling Stations in Slovakia in 2010

Žilina

Michalovce Prievidza Banská Bystrica Košice Nové Mesto n. V.

Zvolen

Trnava Nitra

Bratislava

Komárno

CNG FS – SPP CNG FS CNG FS bus operators under construction – bus operators

25 Natural Gas Trading

Purchase and Storage of Natural Gas

In 2010, SPP purchased a total of 52 529 GWh (4.95 billion m3) of natural gas for the purposes of supplying the domestic market. A dominant share of natural gas bought in 2010 came from imports from the Russian Federation from Gazprom export.

SPP secured the storage capacity necessary for the Slovak Republic by renting underground storage facilities from NAFTA a.s., (Gbely) and POZAGAS a.s., (Malacky). The reserves of natural gas stored in storage facilities served to ensure trouble-free supply to customers during the winter period and, at the same time, for balancing deviations in gas supplies on the part of the foreign supplier.

Natural Gas Sales

Unlike in 2009, SPP recorded a decline in the volume of natural gas sales in Slovakia in 2010, which was primarily due to the entry of new traders to the market.

Development of Natural Gas Sales in 2008 – 2010

Volume in m3 million Volume in GWh

2008 5,883 62,128

2009 5,037 53,369

2010 4,663 49,434

Prices and Regulation

Similarly to the previous period, in 2010 the prices for the supply of natural gas to customers in the Households segment in the agreed tariff type D1 – D3 continued to be the subject of price regulation by the Office for Regulation of Network Industries. Compared with 2009, from 1st January 2010 the prices for customers in the Households segment dropped by approximately 5% on average.

The gas supply for heat generation intended to households continued to be subject to price regulation in 2010. The price of gas supply for heat generation intended to households, including the conditions of its application, was determined by the Office for Regulation of Network Industries.

In the Small Customers and Organisations segment (Small Businesses), which are not subject to price regulation, there was a mild drop in prices as of 1st January 2010. The prices for this consumer segment were subsequently modified in the course of 2010 based on the development of market parameters, namely as of 1st April 2010 and as of 1st November 2010.

26 Integrated Communication

External Communication

SPP is not only a key energy supplier in Slovakia, but also a leader in the field of corporate communication.

SPP applies the principles of open communication towards the media and also the public at large, endeavouring to provide information quickly, flexibly and to the maximum possible extent. As an important entity in the Slovak economy, through its spokes- person, various managers and experts the company regularly provides statements on its goals and also important economic topics. During the whole last year, the company’s standpoints were actively presented also by the Chairman of the Board of Directors, who in- tensely communicated with both Slovak and foreign media.

In its daily external communication, SPP uses a wide range of communication tools, from press conferences, press releases, workshops on current topics for journalists and other experts from the external environment, through to websites and specialised subpages. With the aim of maintaining direct contact with its target groups, the company organises cultural and social events, supports charitable and philan- thropic activities, helps sportspeople, artists and scientists, and also supporting the restoration of cultural heritage in Slovakia.

SPP is one of the leading entities in corporate communication also in terms of intense use of social networks. In communicat- ing with current or future customers, employees, and also the general public, the company uses popular social network media such as Facebook, Twitter or YouTube. Also thanks to this approach, SPP is perceived as a reliable and stable company, which customers can fully trust.

The 2009 Annual Report of SPP won the Quality Annual Report Award. In the 11th annual Best Annual Report 2009 competition, it ranked in the Top 10 annual reports in the Electronic Annual Report category.

Marketing Communication

The marketing communication of SPP pays equal attention to all of our customer segments. Its goal is to strengthen the awareness of customers about the positive characteristics of natural gas compared to other energy sources and, at the same time, to draw their attention to the strengths of SPP as a key supplier of natural gas in Slovakia.

In 2010, above all it was the business segments – Large Customers, Small Customers and Organisations, Cities and Municipali- ties – that were selected as priorities for marketing communication. In marketing campaigns, the customers in these segments were informed in particular about changes on the gas market, but also about SPP’s competitive offer and new products.

In communicating towards customers in the Households segment, we focused on the topic of rational use of natural gas, which was in- cluded in the ÚSPORY (SAVINGS) campaign. It is the scope of energy consulting in the field of efficient gas consumption that represents one of SPP’s competitive advantages compared to alternative suppliers. In cooperation with the EkoFond, we prepared several activities as part of the Savings topic aimed at the use of efficient gas appliances. The campaign included the offer of financial support when buy- ing condensation boilers through the EkoBonus product and also the educational campaign Preventive Inspections of Gas Appliances focusing on proper care in the operation of these boilers. At the same time, a series of articles featuring specific tips on how to save when cooking or heating using natural gas was published in selected periodicals.

In the autumn, we continued informing about potential savings through a broader campaign, by which we introduced our new energy consulting service – Expert Advisory Centre, where customers can receive answers to various individual questions.

Internal Communication

Continuing in the tradition of proven activities with an innovative approach to communication – that is one way to summarise the internal communication of SPP last year. Transparent and open communication towards employees was particularly important in support- ing the business activities of SPP. That is also why throughout the year the company followed the concept of “SPP for the Future” and its subproject “SPP for Employees” with new features such as Open Day within the European Union’s Sustainable Energy Europe Campaign or Ekokino SPP (screening winning films from the international film festival Ekotopfilm on sustainable development).

On all levels of management, we continue to support and develop all effective written, face-to-face and interactive forms of communication with employees and management. The proven communication tool – regular informal meetings of members of the Boards of Directors and representatives of top management of the SPP Core Group companies with employees in regions also supported the idea of direct communication and open dialogue in 2010. The aim of those meetings was to inform employees about current events in the companies. Space for mutual dialogue with employees was created by working lunches with members of the Board of Directors or breakfasts with the Human Resources Director for newly recruited employees

Various events, such as meeting with our Paralympic athletes and canoeists, the European Wild Water Canoeing Championship in Čuňovo, International Children’s Day in the Slovak Gas Museum or the Volunteer Day with Nadácia SPP in Bratislava, all generated a positive response among employees of the SPP Core Group. Also of interest were the various employee competitions, which we organ- ised throughout the year with the aim of improving the awareness and sense among employees of being an integral part of their employer and the SPP brand.

27 Human Resources

The year 2010 saw the implementation of several important activities in the area Human Resources. The bargaining on the new Collective Agreement for 2011 – 2013 represented a significant part of these activities. The positive aspect was that despite the difficult situation on the market, affected by the ongoing economic crisis and increasing competition, we managed not only to preserve the standard of the previous Collective Agreement, but even to increase certain benefits in the social programme.

The year 2010 was also associated with preparing the company for implementation of the 3rd Energy Package. From 2010, new work posi- tions have been created in the organisational structure of the company eustream, a.s, which we have been gradually filling mostly from internal sources. With the goal of ensuring transparency in this process, we defined for ourselves exact principles governing the staffing of all newly-created job posts within eustream, a.s.

Employee Relations

With the aim of improving and maintaining the good physical health of employees, our company has been providing a premium standard of preventive medical examinations in accordance with the valid Collective Agreement. This opportunity was used by 659 company employees throughout Slovakia in 2010.

We support workforce recuperation in a similar way, as employees have the chance to take part in 7-day recuperation stays at any of several spa facilities in Slovakia. In 2010, a total of 269 employees stayed at the spa resorts of Slovenské liečebné kúpele Turčianske Teplice, Kúpele Číž, Kúpele Brusno and Bardejovské kúpele.

As part of our social policy and employee care system, we have been providing a package of various contributions from the Social Fund, and this for meals, work and personal anniversaries, support in need, social assistance to employees and their family members in difficult life situations, and we also rewarded blood donors.

Education

In the field of education, we at SPP pay extraordinary attention particularly to the development of necessary managerial and specific skills, as well as to securing required competences. In 2010, SPP approved the project co-financed from the European Social Fund under the Employment and Social Inclusion Operational Programme, focusing on development of communication and professional skills of SPP employees.

In 2010 we continued with the implementation of the Graduate Development Programme, allowing university graduates to get their first work experience and professional expertise in selected areas of our company. Under this programme, the graduates participated in various selected education and development activities and worked on the assigned tasks and projects under the leadership of managers – mentors.

Last year, we continued developing cooperation with universities. We gave a free lecture on sustainable development in cooperation with the Slovak University of Technology in Bratislava and the University of Economics in Bratislava. Together with the University of Economics in Bratislava, we continued preparing the Sustainable Development subject, which will be taught for the second year and in which our qualified and highly experienced experts will give lectures as well. By these activities, SPP implements the company’s long-term goal to support the interconnection of theory with practice and, at the same time, to win talented students and graduates and motivate them to start their career in our company.

Taking Care of Key and Talented Employees

In SPP we continue to pay close attention to employees with key know-how and employees showing strong potential. Therefore, also in 2010 we supported development activities for this employee group, which we prepare for future managerial and expert positions. We focused their development particularly on managerial, professional and language skills. We facilitated the broadening of expertise and professional know-how also through mentoring and common meetings with members of the company’s top management.

28 Human Resources

Qualification Structure of Employees as of 31st December 2010

University degree Secondary vocational education 681 91 51.6% 6.9%

Complete secondary education with school-leaving examination Basic education 537 12 40.7% 0.9%

Age Structure of Employees as of 31st December 2010

30 years or younger 31 - 40 years 141 417 10.7% 31.6%

41 - 50 years 51 years or older 422 341 31.9% 25.8%

As of 31st December 2010, the average age of employees was 42.6 years.

Women in SPP

1.321 employees worked in SPP as of 31st December 2010, of whom 755 were women, representing 57.2% of the total number of employees.

29 SPP for the Future

SPP thinking of Slovakia’s future

We have been supporting and developing activities leading to sustainable development on a long-term basis. We are keen to keep our business successful over the long-term and, at the same time, keep it beneficial and helpful to others.

SPP for the Future is a unified concept covering environmental and public beneficial activities. It enables more transparent and better targeting of all activities of SPP that support the idea of sustainable development. Even nowadays SPP is implementing many projects in this field. These include, for example, environmental protection projects, consulting aimed at lowering energy consumption and enhanc- ing energy efficiency, but also various sponsoring and public beneficial activities and philanthropic programmes, which we implement in cooperation with our organisations established for this special purpose – EkoFond, a non-investment fund, and Nadácia SPP (SPP Foundation). SPP for the Future is based on the vision of the SPP Group and is intended to allow harmonisation of all the economic, social and environmental goals of our company.

Social Responsibility

With respect to the scope of our operations and our impact on the environment in which we operate, in SPP we fully understand our role as a socially responsible company, both towards the external environment and inwards – towards our employees. Supporting a civil society and providing assistance to people in difficult life situations comprise an integral part of our corporate culture, which is then reflected in all our activities. We are proud of the fact that as a strong and above all reliable partner, SPP has the chance not only to help people in need, but also to promote the development of extraordinary talents and help put innovative ideas into practice.

Conserving Cultural Heritage

In 2010, SPP succeeded already for the fifth time in defending its top spot in the TOP Corporate Philanthropist list, which is compiled each year by the Donors Forum. SPP won the award by the flagship donation programme of the company – Obnovme si svoj dom (Let’s Renovate Our House), which is carried out in cooperation with Nadácia SPP and the Ministry of Culture of the Slovak Republic. Through the programme Obnovme si svoj dom (Let’s Renovate Our House) in the field of corporate philanthropy, for which the company allocated funds exclusively from its own sources, SPP has already supported the renovation, reconstruction and overall preservation of many national cultural monuments and sites in Slovakia. In 2010, SPP contributed EUR 431,200 to the Obnovme si svoj dom programme, while Nadácia SPP contributed EUR 400,000.

30 SPP for the Future

Nadácia SPP Supports the Development of Spiritual and Cultural Values

Established in 2002 for the purposes of supporting, developing and protecting spiritual, cultural and moral values in Slovakia, Nadácia SPP is an important entity in the field of corporate social responsibility in Slovakia. Nadácia SPP also actively supports the development of a civil society and cooperates with organisations that promote positive long-term and innovative changes in the social field. Projects aimed at making life easier for people in difficult living conditions receive a lot of attention as well.

Nadácia SPP has been developing its profile on a long-term basis in the following fields:

n development and support of education,

n development and protection of cultural values,

n support for disadvantaged groups of the population,

n health protection,

n support for charitable and philanthropic activities,

n community and regional development.

In 2010, Nadácia SPP supported more than 400 projects in total, worth EUR 2.5 million.

Nadácia SPP creates partnerships with organisations, the goals and results of which correspond to fulfilment of its mission. All partnership projects of the foundation are innovative in their focus, covering the whole Slovakia or being of a model character in the given region. They have an impact on the whole society and they produce concrete results and change the quality of people’s lives.

In 2010, the amount of almost EUR 1.4 million was allocated through 70 contributions provided as part of support for partnership projects. Long-term supported projects included the following: institutional support for the GunaGu Theatre, the New Talent Prize awarded each year at the Bratislava Music Festival, support for young canoeists in cooperation with the Slovak Association of White Water Canoeing, the nationwide event “Children Davis Cup” or the Mladí filantropi (Young Philanthropists) project under the auspices of the Slovak Association of Community Foundations.

31 SPP for the Future

Nadácia SPP pays particular attention to health protection, in which it focuses on supporting a healthy lifestyle among children and the young and on providing support for the healthcare sector. In 2010, Nadácia SPP donated EUR 350,000 for the purchase of cerebral/ somatic oximeters for five teaching hospitals. As a part of the open grant programmes, which are open to all entities meeting the set criteria, in 2010, Nadácia SPP supported a total of 378 requests for support, while the granted amount came to more than EUR 1 million. The following grant programmes were opened in 2010: Hlavička (Smart Head) scholarship programme, Klub H programmes, Opora na podporu znevýhodnených skupín (Support for Disadvantaged Community Groups), O krok vpred (One Step Ahead) programme, Podpora komunít (Supporting Communities) programme, in cooperation with NAFTA a.s., the Municipality (Municipalities) programme implemented with eustream, a.s., Zamestnanecký grantový program (Employee Grant Programme) implemented with SPP and Obnovme si svoj dom (Let’s Renovate Our House) programme in cooperation with the Ministry of Culture of the Slovak Republic. The new grant programme of Nadácia SPP – Dedičstvo regiónov (Heritage of Regions) – focused on supporting cultural traditions in regions.

32 SPP for the Future

Helping is Part of SPP’s Corporate Culture

The Employee Grant Programme has been promoting philanthropy development among employees since 2005 and gives company employees the chance to receive financial support for their free time and public beneficial activities. The goal of the programme is to enhance philanthropic awareness among SPP employees and to allow the most active of them to influence the quality of life directly in the community where they live.

The programme met with great interest among SPP employees, which proves that the effort to develop communities and help others is a common goal of the company, its employees and Nadácia SPP. So far, the Employee Grant Programme has supported 340 projects totalling almost EUR 340,000.

The Employee Volunteer Day has been part of the programme since 2008. By their volunteer work employees have so far helped revi- talise the Open-Air Geological Museum in the Devín district of Bratislava, reconstruct Ostrovné lúčky nature reserve near Čunovské jazerá, and they have also contributed to enhancing the environment at the Crisis Centre of the Archdiocesan Charity in Košice. In 2010, Nadácia SPP was a partner of the Volunteer Day in Slovakia. The employees of SPP revitalised the environment of HESTIA Seniors House in Bratislava’s Dúbravka district.

The fate of disadvantaged fellow citizens concerns us. In the internal programme Spolu pomôžeme viac (Together We Can Help More), employees could financially contribute to five hard-tested families, whose stories were published on the intranet. A total of EUR 698 was raised under this programme and Nadácia SPP also contributed EUR 500 to each family.

33 SPP for the Future

SPP is behind Major Successes of Slovak Athletes

In 2010, SPP once again presented itself as a strong and reliable partner of top Slovak athletes. For more than six years we have been the supporter and general advertising partner of one of the most successful sports teams in the history of Slovakia – the Slovak National White Water Canoeing Team. Under this long-term and successful cooperation, in 2010 SPP was once again the general advertising partner of the triple Olympic medal winners in white water canoeing – Peter and Pavol Hochschorners, and the national speed kayak team comprising Michal and Richard Riszdorfers, Erik Vlček and Juraj Tarr.

34 SPP for the Future

In SPP, we highly regard our long-term partnership with the Slovak Paralympic Committee. We are proud that also thanks to our support the Slovak Paralympic athletes managed to win 11 medals (including 6 gold) at the Winter Paralympic Games in Vancouver (Canada), thanks to which Slovakia occupied the 4th most successful ranking ever in the medal table in competition with 44 countries of the world.

35 SPP for the Future

Environment

Environmental Protection and Work Safety

We consider environmental protection and occupational safety very important activities with a society-wide impact. A healthy living and working environment form the basis for preserving human existence and a precondition for sustainable development of the company.

SPP affects the environment by its operational activities. In the field of waste, emissions, water pollution and noise we monitor and minimize any impact on the surrounding environment. The company’s policy, which defines our commitments and obligations regarding the environ- ment and occupational safety, represents the foundation for achieving our environmental and safety concept. We support environmentally- friendly thinking and education of employees. The basic denominator of our activities regarding the environment is social responsibility.

Achieved Results

By optimising in the field of waste management we managed to lower the production of other waste by 27% on a year-over-year basis. We increased the recycling rate by 14.3% compared to 2009. We finished eliminating the environmental burden from the coal gas produc- tion from the Bratislava locality.

Environmental Goals

n to continue increasing the recycling rate of produced waste (for example, ensuring new contain- ers for recycling plastics),

n to finish post-decontamination monitoring in the Bratislava locality, and confirm the successful cleaning of the site,

n to continue resolving environmental burdens where risk analyses confirmed contamination.

36 SPP for the Future

Health and Safety at Work

The priority in 2010 was to introduce a systemic approach to cooperation with employees, to arrange the provision of information to them and to engage them in solving occupational health and safety issues. The goal is to eliminate the possible occurrence of accidents and exposure to harmful factors of the working environment.

We continued in developing the work health service project by identifying and evaluating harmful and negative factors of the working environment. We conducted an in-depth audit of all workplaces featuring display units and in the interest of clearly defining powers and responsibilities, we mapped out processes in the field of occupational safety.

Work accidents of employees, suppliers and contractual partners are among those efficiency indicators of the system for ensuring occu- pational health and safety. Compared with 2009, during which 4 work accidents were registered, in 2010, we recorded just 1 work accident. Although this is a huge improvement in this field, the achieved status does not satisfy us. For this reason, in 2010, we began applying the “Safe Workplace” action plan, which will continue in 2011.

We registered no fire in facilities owned by the company in 2010. We focused a substantial part of our activities in the field of fire protection on preventive activities and on safeguarding the operation of fire and technological equipment, the fire safety of buildings and technical equipment.

Development of Work Accident Rate

2008 2009 2010

Number of work accidents 1 4 1

EkoFond - Contributing to Greater Energy Efficiency and Environmental Protection

In SPP, we consider the rational use of energy important for society as a whole. This approach has also been reflected in one of our val- ues – “To respect resources”. Alongside the services that we provide to our customers through the SPP PORADÍME VÁM (SPP ADVISING YOU) product series, our company also supports other activities aimed at the efficient use of energy. Since 2008, SPP has been fulfilling this goal through EkoFond, a non-investment fund, the programmes of which concerns energy savings and improving the quality of the environment. The establishment of the fund, its funding and the scope and focus of its activities, constitute a unique activity not only in Slovakia, but also in the European Union. They serve as an example of innovative realisation of the socially responsible business concept.

Despite its short existence, the Fund has already managed to initiate and support a series of projects leading to the gradual fulfilment of its vision – to become a professional and reliable partner for everyone who seeks to improve energy efficiency and quality of the environ- ment, and so contribute to the creation of conditions for sustainable development of society.

The support provided by the Fund is designed for all non-commercial entities, the primary target group being entities financed from pub- lic funds and entities involved in public beneficial activities, such as schools, hospitals, social and humanitarian organisations, or civic associations. Cities and municipalities and support for their activities are therefore one of the main priorities of the Fund.

Regarding grant programmes, EkoFond supported a total of 39 projects in 2010 worth more than EUR 670,000.

Since the establishment of the Fund, a total of 77 projects worth more than EUR 3,048,000 have been supported under its grant pro- grammes. The highest number of projects in 2008 – 2010 (65 in total) received support as part of the Improvement of Energy Efficiency of Buildings programme.

37 SPP for the Future

In 2010, the largest volume of funds went to supporting activities aimed at Improvement of Energy Efficiency of Buildings. We have also supported ambitious pilot projects that innovatively interlink natural gas with the use of renewable sources. Promoting innovative ways of using energy based on natural gas is considered in SPP as an investment in the future. Thanks to financial support from the EkoFond, it was possible in 2010 once again to improve the energy efficiency of buildings by thermal insulation of their peripheral walls and roofs, by replacing windows, and by hydraulic regulation or thermostatisation of their heating systems. Many schools, municipal of- fices or residential buildings and houses therefore received not only a new look but, more importantly, made significant savings in energy consumption. Total projected savings in projects approved so far in the programme Energy Efficiency of Buildings come to more than 7,447,000 kWh/year.

The EkoFond provides an alternative in the field of transport as well. By supporting the purchase of vehicles run on CNG (Compressed Natural Gas) for public organisations, we contribute to reducing harmful emissions from transport into the atmosphere. A total of 6 projects were supported in the Support for the use of CNG as motor fuel in the Slovak transport programme, of which 5 projects were in 2010.

38 SPP for the Future

In 2010, the EkoFond registered a total of 106 applications for a financial contribution in the field of grant programmes, of which 39 applications were supported. Most applications (34) were submitted under the programme Improvement of Energy Efficiency of Buildings.

In cooperation with SPP, in 2010, we also launched the Advisory Centre project on the Fund’s website, where interested parties can receive answers to their questions concerning heating in houses and water heating, opportunities for saving energy in heating, transport using natural gas and about the current programmes run by the EkoFond.

Protection of the environment and the associated efficient spending of energy are in the hands of individuals, whom it is necessary to educate and actively inform about this issue. That is also why in 2010, the EkoFond supported in the field of partnership projects those projects and activities that focus on education in both these fields. The total amount of funds spent on partnership projects in 2010 reached EUR 324,391. Successful projects include the organisation of the Ekotopfilm and Jeden svet (One World) film festivals, the ENEF 2010 and Zelená Architektúra (Green Architecture) conferences, as well as the extensive project “Conscious Municipalities React to Climate Change”, covering the education of local government representatives in the field of efficient management with respect to climate change.

Another interesting partnership project that was announced on 22nd March 2010 jointly by the EkoFond and the Fund’s founder, SPP, was the EkoBonus offer. This programme officially ended on 14th May 2010, when funds worth EUR 568,035 for the purchase of modern gas boilers had been depleted. The EkoFond granted contributions for condensation boilers to a total of 1,874 applicants. The media cam- paign associated with this offer had also an educational character, which was to generate in a motivational way the interest of the public in new, modern technologies for heat and hot water production for the needs of households. These technologies will mean more efficient and environmentally-friendly operation for consumers - lower consumption and lower emissions, and so also a higher standard of environ- mental protection. Another benefit that cannot be neglected is the higher operational safety of new, modern appliances.

5[_2_^ec v†ˆ‘B—ˆêŽ„W‡Uꆈ‘—

¾¢ªêê½

lŽ’i’‘˜–ê ˆê “•B–“ˆ™’Žê ‘„ê ‘’™Uê Ž’‘‡ˆ‘„:‘Uê Ž’—’ê ™’ê ™UOŽˆê ¢ªê Üê ê †ˆŽ’™ˆê †ˆ‘œê Ž’—„ê „›Œ5‘ˆê ¤ªªê €Ã±ê Ž—’•Uê JWˆ—ˆê B–Ž„Pê ’‡ê lŽ’m’‘‡˜­ê z—„:B±ê ê „Žê –Œê ’‡ê ¢¢­ê £­ê ¢ª¡ªêê ŽR“Œ—ˆê „ê ˜™ˆ‡Œˆ—ˆê ‡’ê “•ˆ™5‡Žœê ‘’™Uê Ž’‘‡ˆ‘„:‘Uê Ž’—’ê –ê ™UŽ’‘’ê ‡’ê £ªê Ž~ê ™•5—„‘ˆê „ê „Oˆ—ˆêê ‡’êlŽ’m’‘‡˜êWŒ„‡’–Pê’êlŽ’i’‘˜–ê–“’˜ê–ê“’W„‡’™„‘UŒê“•B’‹„Œ­êêê êê u5Ž˜“ê‘’™>‹’ꎒ‘‡ˆ‘„:‘>‹’ꎒ—„ê‘„ê 5ˆêˆ‘>‹’꓏œ‘˜ê–„ê—ˆ•„ê’“„—Bꋑˆ<ꗕŒŽ•5—·ê ■êlŽ’i’‘˜–ê™’ê™UOŽˆê¢ªêÜêê†ˆ‘œêŽ’‘‡ˆ‘„:‘>‹’ꎒ—„ê„Wꇒê™UOŽœê¤ªªê€. ■êuŒWOŒ„ê–“’—•ˆ „ê‘’™>‹’ꎒ—„ê–„ê“•ˆ„™BꙒê™U•„‘ˆêR–“’•ˆê‘„꓏„— 5†‹ê„ꈑˆ•ŠŒ˜­ ■ê}4:OŒ„ê ˆ“ˆ:‘’–Pꓕˆ™5‡Žœê™5O‹’ê‘’™>‹’꓏œ‘’™>‹’ê–“’—•ˆ Œ:„­ êê w’‡•’ ‘>ꌑ‰’•5†Œˆê’ê“’‡Œˆ‘Ž„†‹êB–Ž„‘Œ„êlŽ’i’‘˜–˜ê‘5‡ˆ—ˆê‘„êꚚš­–““­–Ž±êꚚš­ˆŽ’‰’‘‡­–Ž±êê ššš­–“““’•„‡Œˆ™„­–Ž±ê ‘„ê 5Ž„‘B†Žˆê Œ‘Žˆê ª¨¥ªê ¡¡¡ê £¦£ê „ê ™ê Ž—’•’Ž’E™ˆŽê 5Ž„‘B†Ž’êê †ˆ‘—•ˆêzww­ê ê vŽ•ˆêlŽ’i’‘˜–˜êJWˆ—ˆê“•ŒêŽR“ˆê‘’™>‹’ꎒ‘‡ˆ‘„:‘>‹’ꎒ—„Ꙝ˜WŒPꄍꝙU‹’‡‘ˆ‘Rꓒ‘˜Ž˜êŽ’‘‡ˆ‘„:‘U†‹êŽ’—’™ê’‡êhŒ„‘:‘U†‹ê“„•—‘ˆ•’™êzww­êhŽ—˜5‘œê’‘„ê –ê“’‘˜Ž’˜êhŒ„‘:‘U†‹ê“„•—‘ˆ•’™êzwwê‘5‡ˆ—ˆê‘„êššš­–““­–Ž­ê

zwwê„êlŽ’m’‘‡ê–„ê„Ž—B™‘ˆê„“5„Rꇒꎄ“„‘ˆê{UW‡ˆGꘇ•W„—ˆE‘ˆêˆ‘ˆ•ŠŒˆ­ê

{UW‡ˆGê ˜‡•W„—ˆE‘ˆê ˆ‘ˆ•ŠŒˆê ˆê –R:„–P’˜ê Ž„“„‘ˆê l ê {•™„’ê ˜‡•W„—ˆE‘5ê ˆ‘ˆ•ŠŒ„ê ™êl˜•I“ˆ­ê

jŒˆE’êˆê˜Ž5„Pꆈ–—˜êŽêOŒ•OŒˆ˜ê™œ˜WB™„‘Œ˜ê’ ‘’™Œ—ˆE‘U†‹ê‡•’’™±ê•„†Œ’‘5‘ˆ˜ê ™œ˜WB™„‘Œ˜êˆ‘ˆ•ŠŒˆê„êŽê:Œ–—ˆê‡’“•„™ˆ­

39 SPP for the Future

In 2010, the EkoFond continued implementing its long-term educational project called EkoFond for Schools, the goal of which is to stimulate interest in the area of energy sources and energy efficiency among pupils, students and teachers, but also among the general public. The Fund supported activities under this project with more than EUR 200,000 in 2010.

The project is divided into two areas, with each area focusing on a different target group:

The first area of activities seeks to stimulate interest in problems relating to energy sources among students and teachers at primary schools. The the goal of the EkoFond is to introduce this complex area in a creative and playful way, also in the form of a com- petition, the second year of which took place at the turn of 2009/2010, with the 3rd annual competition being announced in November 2010. Both annual competitions were announced on the topic of efficient use of energy. The main evaluation criteria in the competition concerned the active participation of students in the creation of educational activities and the ability of teachers and students to process the topic in a creative and original way. Of the total of 90 enrolled projects, 16 primary school projects were awarded in 2010 with prizes amounting to EUR 23,590.

Alongside the announcement of the 3rd annual competition, the Fund also launched a multimedia online platform about energy of the 3rd millennium. Through its three sections, this platform provides information about possible energy savings in schools and the principles of processing various energy forms, while providing a database of activities, trials and video clips on the energy topic. The e-learning for teachers also takes place on this platform.

A parallel activity comprised educational web games published on the Fund’s website, which were intended for younger and older students at primary schools. As some of the games were also made in English and German, in addition to environmental education the teachers can use them to make the teaching of foreign languages more interesting.

The second area of activities focuses on students of secondary vocational schools with technical specialisation. These activities began in the second half of 2009 when the EkoFond, together with the Secondary Vocational School of Electrical Engineering in Trnava, Secondary Vocational School of Civil Engineering in Banská Bystrica, Technical Secondary Vocational School in Prešov and the State Vocational Education Institute, started to prepare a four-year study course with school-leaving exam - Power Equipment Technician, the start of which has been scheduled for the school year of 2010/2011. The study course has been designed so that students receive high- quality theoretical knowledge and practical skills with respect to various types of electrical engineering and basic construction activities associated with the installation, maintenance and repair of power equipment based on natural gas and renewable energy sources. At the same time, graduates from the course should be able to provide appropriate energy advisory services (how and where to save energy) and should be able to install power equipment in order to ensure the required level of safety and comfort for users in houses, apartment buildings, or even small businesses. Practical training workshops are being set up in the aforementioned secondary vocational schools, serving for practical education, with the schools to be fitted with state-of-the-art equipment provided by SPP’s Alliance Partners. The educa- tion concept and preparation of textbooks was prepared in order to allow teachers and heads of practical training to receive the necessary knowledge to be able to teach this new subject.

Through the EkoFond project, SPP has joined the European Union’s Sustainable Energy Europe Campaign, and the European Commission endorsed the Fund as an Official Partner of this campaign.

Ekofond pre školy has been endorsed by the European Commission’s Sustainable Energy Europe Campaign as an Official Partner.

By its activity, the Fund proactively responds to topics that are particularly relevant at the current time, especially in relation to the need to lower energy consumption and protect the environment. Our goal is for the EkoFond to become a launching platform for the latest information and trends, but also for discussions among experts and also the general public. We do not want to stay just on the level of discussions, however, as our aim is also to support the implementation of individual measures and projects, and so also demonstrate that the discussed solutions are feasible in practice and are able to produce the desired results.

40 Equity Holdings

Subsidiaries, Joint-Ventures and Associated Companies

1 SPP - distribúcia, a.s., Bratislava

2 eustream, a.s., Bratislava

3 SPP CZ, a.s., Praha, Česká republika

4 NAFTA a.s., Gbely

5 SPP Bohemia a.s., Praha, Česká republika

6 POZAGAS a.s., Malacky

7 GEOTERM KOŠICE, a.s., Košice

8 SLOVGEOTERM a.s., Bratislava

9 P R O B U G A S a. s., Bratislava

10 InfoGas, a.s., Bratislava

Other Equity Holdings

1 GALANTATERM spol. s r.o., Galanta

2 Energotel,a.s., Bratislava

Other Equity Holdings Abroad

1 Severomoravská plynárenská, a.s., Ostrava, Česká republika

2 Východočeská plynárenská, a.s., Hradec Králové, Česká republika

Other Subsidiaries

1 Nadácia SPP, Bratislava (SPP Foundation)

2 EkoFond, n.f., Bratislava

41 Individual Financial Statement of SPP

Individual Balance Sheet (Selected Data in EUR million)

As of 31st December 2010 and 31st December 2009

31st December 2010 31st December 2009 ASSETS: NON-CURRENT ASSETS Property, plant and equipment 2,911 2,998 Financial investments 3,282 3,002 Non-current intangible and other assets 26 29 Total non-current assets 6,219 6,029 CURRENT ASSETS 1,002 779 Assets available for sale 29 7 TOTAL ASSETS 7,250 6,815 EQUITY AND LIABILITIES: CAPITAL AND RESERVES Registered capital 1,736 1,736 Reserves 2,003 2,084 Retained earnings 1,635 1,906 Total equity 5,374 5,726 NON-CURRENT LIABILITIES 1,078 505 CURRENT LIABILITIES 798 584 Total liabilities 1,876 1,089 TOTAL EQUITY AND LIABILITIES 7,250 6,815

Individual Income Statements (Selected Data in EUR million)

Years ended 31st December 2010 and 31st December 2009

Year ended Year ended 31st December 2010 31st December 2009 Revenues from sales of products and services 2,668 2,531 Operating expenses (2,540) (2,130) Operating profit 128 401 Investment income 347 249 Finance revenues/(costs) (9) (7) Profit before income taxes 466 643 Income tax (23) (74) NET PROFIT FOR THE PERIOD 443 569

42 Individual Financial Statement of SPP

Individual Cash Flow (Selected Data in EUR million)

Years ended 31st December 2010 and 31st December 2009

Year ended Year ended 31st December 2010 31st December 2009 Operating activities Cash flow from operating activities 271 551 Interest paid (10) (1) Interest received 1 3 Income tax paid (74) (123) Net cash flows from operating activities 188 430 Investing activities Provided loans - (30) Proceeds from investments in securities 10 8 Acquisition of investments in securities (316) 0 Purchase of property, plant and equipment (46) (107) Proceeds from sales of property, plant and equipment and intangible assets 12 5 Dividends received 364 247 Net cash inflow/(outflow) from investing activities 24 123 Financing activities Proceeds from interest-bearing borrowings 603 97 Dividends paid (797) (797) Other proceeds and expenditures from financial activities, net (2) 0 Net cash flows from financing activities (196) (700) Net increase/(decrease) in cash and cash equivalents 16 (147) Effects of foreign exchange fluctuations 1 (4) Cash and cash equivalents at the beginning of the period 56 207 Cash and cash equivalents at the end of the period 73 56

43 Independent Auditor’s Report

44 Independent Auditor’s Report

45 Consolidated Financial Statement of the SPP Group

Consolidated Balance Sheet of the SPP Group (Selected Data in EUR million)

As of 31st December 2010 and 31st December 2009

31st December 2010 31st December 2009 ASSETS: NON-CURRENT ASSETS Property, plant and equipment 6,731 6,611 Financial investments 85 320 Non-current intangible and other assets 131 34 Total non-current assets 6,947 6,965 CURRENT ASSETS 1,113 961 Assets held for sale 188 7 TOTAL ASSETS 8,248 7,933 EQUITY AND LIABILITIES: CAPITAL AND RESERVES Registered capital 1,735 1,735 Reserves 3,760 3,923 Retained earnings 277 357 Share in equity attributable to SPP’s shareholders 5,772 6,015 Minority interests of other owners of subsidiaries 311 311 Total equity 6,083 6,326 NON-CURRENT LIABILITIES 1,741 1,121 CURRENT LIABILITIES 424 486 Total liabilities 2,165 1,607 TOTAL EQUITY AND LIABILITIES 8,248 7,933

46 Consolidated Financial Statement of the SPP Group

Consolidated Income Statement (Selected Data in EUR million)

Years ended 31st December 2010 and 31st December 2009

Year ended Year ended 31st December 2010 31st December 2009 Revenues from sales of products and services 3,133 2,760 Operating expenses (2,539) (2,010) Operating profit 594 750 Income from investments 101 34 Finance costs (12) (10) Profit before income taxes 683 774 Income tax (122) (152) NET PROFIT FOR THE PERIOD 561 622 Profit attributable to: SPP shareholders 525 588 Minority interests of other owners of subsidiaries 36 34 Total 561 622

47 Consolidated Financial Statement of the SPP Group

Consolidated Cash Flow of the SPP Group (Selected Data in EUR million)

Years ended 31st December 2010 and 31st December 2009

Year ended Year ended 31st December 2010 31st December 2009 Operating activities Cash flows from operating activities 628 985 Interest paid (10) (1) Interest received 1 3 Income tax paid (156) (195) Net cash flows from operating activities 463 792 Investing activities Net cash outflow upon acquisition of a subsidiary (62) - Purchase of property, plant and equipment (168) (233) Proceeds from sale of property, plant and equipment and intangible assets 14 6 Dividends received 13 16

Net cash inflow/(outflow) from investing activities (203) (211) Financing activities Proceeds from interest-bearing borrowings 605 85 Expenses for interest-bearing borrowings (35) - Dividends paid (829) (830)

Net cash flows from financing activities (259) (745) Net increase/(decrease) in cash and cash equivalents 1(164) Cash and cash equivalents at the beginning of the period 90 257 Effects of foreign exchange fluctuations 0 (3) Cash and cash equivalents at the end of the period 91 90

48 49 Independent Auditor’s Report

50 Independent Auditor’s Report

51 Contacts

Registered Office:

Slovenský plynárenský priemysel, a.s. Mlynské nivy 44/a 825 11 Bratislava 26 Slovak Republic

Phone: + 421 2 6262 1111 Fax: + 421 2 6262 8070 E-mail: [email protected] Website: www.spp.sk

Households:

Customer Line of SPP Phone: 0850 111 363 (weekdays from 7 a.m. to 8 p.m.) Fax: + 421 2 5869 9000 E-mail: [email protected]

Small Business and Organisations:

Business Line Phone: 0850 111 565 (weekdays from 7 a.m. to 8 p.m.) E-mail: [email protected] Fax: + 421 2 5869 9010

For calls from abroad and from the network of alternative operators: +421 2 5869 9092.

Slovak Gas Museum

A specialised museum that has been mapping the past and present of the Slovak gas industry for 15 years, with more than four hundred exhibits on display. To document the development of the gas industry in Slovakia the museum was established in March 1996 on the occasion of the 140th anniversary of the first gasworks to be established in Slovakia.

Seat: Slovenský plynárenský priemysel, a.s. Mlynské nivy 44/c 825 11 Bratislava 26 Slovak Republic

Phone: + 421 2 6262 4164 (weekdays from 10 a.m. to 2 p.m.) Phone: + 421 2 6262 4169 Fax: + 421 2 6262 8669 E-mail: [email protected]

Group visits (for around 20 people or more) must be arranged at least 3 days in advance. Entry to museum is free of charge.

SPP Gallery

The SPP Gallery has been providing space for the presentation of top Slovak and renowned international artists in the fine arts, sculpture, glass, ceramics and textile for almost 11 years. More than 100 exhibitions have been held here since it opened in 2000.

Seat: Slovenský plynárenský priemysel, a.s. Mlynské nivy 44/c 825 11 Bratislava 26 Slovak Republic

Phone: + 421 905 320 342 (weekdays from 11 a.m. to 5 p.m.)

52

Business Line 0850 111 565

Slovenský plynárenský priemysel, a.s. Mlynské nivy 44/a 825 11 Bratislava 26 Slovak Republic www.spp.sk

Design: Istropolitana Ogilvy & Mather