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PRE Group Annual Report Professionalism Proactiveness Mutual trust ´18 Table of contents 002 PRE Group 005 PRE corporate bodies 010 Report of the Board of Directors on Business Activities 017 Selected financial indicators for the PRE Group 018 Trading in electricity and gas 020 Strategy 022 Human resources 025 Environmental protection and OHS 025 Public relations 027 Risk management system in the PRE Group 027 Internal audit, compliance, ombudsperson 030 Subsidiaries 038 Structure of shareholders 039 Information from the General Meeting 039 Information required by law 040 Supervisory Board Report on Activities 042 Report on Relations 062 Independent Auditor’s Report to the shareholders of Pražská energetika, a.s. 074 Consolidated financial statements 138 Separate financial statements 199 Affidavit 200 PRE Group history 204 List of abbreviations 206 Contact information This document is an unsigned English translation of the Czech Annual Report. Only the Czech version of the Annual Report is legally binding. #002 PRE Group PRE Group The PRE Group also includes the 100% subsidiaries of PRE Group PREměření, a.s.: PRE FVE Světlík, s.r.o., (since 30.11.2017), SOLARINVEST – GREEN ENERGY, s.r.o., (since 3.5.2018) and FRONTIER TECHNOLOGIES, s.r.o., (since 30.11.2018). PRE Pražská energetika, a.s., (PRE) and its subsidiaries are FVE Světlík, s.r.o., owns and operates a photovoltaic power a modern integrated energy corporate group, whose plant under relevant licences. SOLARINVEST – GREEN principal activities include electricity and gas sales and ENERGY, s.r.o., carries out installations of solar and thermal trading, electricity distribution, the generation of electricity systems, such as air-conditioning units, heat pumps, etc. from renewable sources and the provision of energy FRONTIER TECHNOLOGIES, s.r.o., develops, produces and services. supplies indoor and outdoor smart lighting solutions. The PRE Group also includes PREnetcom, a.s., a 100% subsidiary PRE has a more than one hundred and twenty year long of PREdistribuce, a.s., which was founded on 27 November history of supplying electricity and developing the electricity 2017 and started operating on 1 January 2018. The main system in Prague. It dates back to 1897, when the Electricity task of PREnetcom, a.s., is to develop communication Works of the Royal Capital City of Prague (Elektrické podniky infrastructure within the distribution network in connection královského hlavního města Prahy) was founded. Today, with with the implementation of smart grids. its more than 800 thousand consumption points, the PRE Group is the third largest electricity supplier in the Czech Republic, operating a high quality and reliable distribution Licence overview network. As part of its activities, it supports state-of- the-art technological solutions and provides consultancy Pražská energetika, a.s. on the implementation of innovative technologies and Electricity trading licence from 17 January 2007, renewed energy savings. Last year, it distributed almost 6.33 TWh until 16 January 2022 of electricity on all voltage levels to end customers and Gas trading licence from 12 January 2011, renewed until generated 29.67 GWh of electricity from renewable sources. 12 January 2021 In 2018, the PRE Group consisted of the parent company PREdistribuce, a.s. Pražská energetika, a.s., which holds licences for electricity Electricity distribution licence from 1 January 2006 for an and gas trading in the Czech Republic, and its subsidiaries: indefinite period of time PREdistribuce, a.s., the owner and operator of the distribution system in the capital Prague and in Roztoky; PREměření, a.s. PREměření, a.s., which specialises in installations and Electricity generation licence from 17 May 2010 to 17 May readings of electricity meters, energy services, service 2035 products and the generation of electricity from renewable Electricity distribution licence from 31 October 2016 for sources; eYello CZ, k.s., which sells electricity and gas to an indefinite period of time households and small businesses under the Yello Energy brand; KORMAK Praha a.s., which provides a complete range eYello CZ, k.s. of engineering, design and construction services related Electricity trading licence from 27 September 2012 to to electricity infrastructure and transformer stations; 26 September 2022 PREservisní, s.r.o., (until 30.9.2018, KORMAK nemovitosti Gas trading licence from 27 September 2012 to s.r.o.), which carries out central purchasing for the PRE 26 September 2022 Group; and PREzákaznická, a.s., which provides complete customer services to the clients of Pražská energetika, a.s., PREdistribuce, a.s., PREměření, a.s., and eYello CZ, k.s. 1 The new seat of PRE was inaugurated in 1997. Its original design received a special mention of the Czech Association of Architects Grand Prix. 3 1 2 2 PRE has run a gallery for the past 20 years, hosting a number of interesting exhibitions every year. 3 The subsidiary eYello, based in Kubánské square, specialises in the sale of electricity and gas outside of the capital Prague. 4 As part of its donor activities, PRE has traditionally cooperated with the Královské Vinohrady University Hospital. Its donations, for example, helped buy machines and equipment for the Burn Clinic and the Gynaecology and Obstetrics Clinic. 5 This transformer station is located close to Kubánské square in Prague’s Vršovice. Several dozen transformer stations in Prague have been spruced- up, sporting similar fresh new looks. 6 The subsidiary PREm offers smart solutions to customers, helping them increase energy efficiency. 4 1 The new seat of PRE was inaugurated in 1997. Its original design received a special mention of the Czech Association of Architects Grand Prix. 5 2 PRE has run a gallery for the past 20 years, hosting a number of interesting exhibitions every year. 6 3 The subsidiary eYello, based in Kubánské square, specialises in the sale of electricity and gas outside of the capital Prague. #004 PRE Group PRE Group PRE Group companies PREzákaznická, a.s. (PREzak) Production, trading and services not listed in Appendices Pražská energetika, a.s. (PRE) No. 1–3 of the Trade Licensing Act, lease of real estate, flats Trading in electricity and gas. The complete scope of the and non-residential premises business activities is stated in the company’s Articles of ID No.: 06532438 Association and in the relevant registers. Prague 10, Na Hroudě 1492/4 ID No.: 60193913 Prague 10, Na Hroudě 1492/4 PRE FVE Světlík, s.r.o. Electricity generation, production, trading and services not PREdistribuce, a.s. (PREdi) listed in Appendices No. 1–3 of the Trade Licensing Act Electricity distribution in Prague and Roztoky, planning the ID No.: 28080378 renovation and development of the distribution system, Prague 10, Na Hroudě 2149/19 construction, operation, administration and maintenance of the distribution system equipment PREnetcom, a.s. (PREnetcom)* ID No.: 27376516 Production, installation and repair of electrical machinery and Prague 5, Svornosti 3199/19a devices and electronic and telecommunication equipment ID No.: 06714366 PREměření, a.s. (PREm) Prague 10, Na Hroudě 1492/4 Repairs, installations and readings of electricity meters in the PRE supply territory, electricity generation, energy SOLARINVEST – GREEN ENERGY, s.r.o. (Solarinvest)** services Installation, repairs, inspections and testing of electrical ID No.: 25677063 equipment, execution of constructions, their alterations and Prague 10, Na Hroudě 2149/19 demolitions, installation, repair and renovation of cooling systems and heat pumps, design of constructions eYello CZ, k.s. (eYello) ID No.: 28923405 Trading in electricity and gas, production, trading and Prague 10, Na Hroudě 2149/19 services not listed in Appendices No. 1–3 of the Trade Licensing Act FRONTIER TECHNOLOGIES, s.r.o. (Frontier)*** ID No.: 25054040 Production, installation and repair of electrical and Prague 10, Kubánské náměstí 1391/11 telecommunication devices, installation, repairs, inspections and testing of electrical equipment KORMAK Praha a.s. (Kormak) ID No.: 27234835 Design and construction of energy networks – LV, MV and Prague 10, Na Hroudě 2149/19 HV transformer stations and line constructions ID No.: 48592307 Prague 10, K Sokolovně 667 * PREnetcom, a.s., founded on 27 November 2017, became part of the PRE Group when it started operating on PREservisní, s.r.o. (PREs) 1 January 2018. Until 30 September 2018, KORMAK nemovitosti s.r.o. Lease of real estate, flats and non-residential premises ** SOLARINVEST – GREEN ENERGY, s.r.o., became part of ID No.: 02065801 the PRE Group on 3 May 2018. Prague 10, Na Hroudě 1492/4 *** FRONTIER TECHNOLOGIES, s.r.o., became part of the PRE Group on 30 November 2018. #005 PRE Group PRE corporate bodies Monika Hášová PRE corporate bodies Member Jan Sixta Board of Directors as of 31.12.2018 Member Pavel Elis Fabian Spalthoff Chairperson Member Alexander Manfred Sloboda Stefan Theo Webers Vice-chairperson Member Marián Čalfa Jörg Reichert Vice-chairperson Member (until 20.12.2018) Pavel Pustějovský Works Council as of 31.12.2018 Member (until 20.6.2018) Jan Pokorný Chairperson Radim Kříž Member Alena Šafrová (since 21.6.2018) Vice-chairperson Helmut Oehler Miroslava Svobodová Member Member (until 30.6.2018) Martin Votava Markus Baumgärtner Member Member (since 1.7.2018) The Works Council was established as an independent body within the company in 2014 by an amendment to the Articles of Association reflecting the private law Supervisory Board as of 31.12.2018 recodification. It deals with employee matters and submits recommendations to the Board of Directors based on Jaroslav Štěpánek employee input. The Works Council consists of four Chairperson employees of the PRE Group, who attend meetings of the PRE Supervisory Board. Franz Retzer Vice-chairperson until 27.6.2018, member since 28.6.2018 In 2018, no members of the company bodies were subject to a conflict of interest or infringed prohibition of Bernhard Beck competition. Member until 27.6.2018, vice-chairperson since 28.6.2018 #006 PRE Group PRE corporate bodies Management of the PRE Group companies as of 31.12.2018 Pražská energetika, a.s.