Statement by the Chairman of the Board of Directors

Dear ladies and gentlemen,

the year 2005 in the energy sector has been yet another year of dynamic changes, not only in Slovakia, but also abroad. From a global perspective, market consolidation has continued and there have been animated debates concerning energy prices. In Slovakia, on top of the price debate, the focus has been on completion of privatization and the process of adaptation to the new Energy Act of 2004 (656/2004 Z.z.), which has concluded its first year in existence. The most important fact for Zapadoslovenska energetika (ZSE) however, is that of fulfillment of economic expectations and reaching bettert-than-planned profit, among other things also due to good trade policy.

Implementation of the new Energy Act has expanded the free market by all businesses. In case of ZSE it meant to conclude new sale contracts with almost 40,000 customers and for their 110,000 off-take points. It was from the market perspective this particular group, to which ZSE offered a product portfolio characterized by effort to reflect as accurately as possible different needs of customers´ consumption diagram.

Customers have paid a great deal of attention to the structure of electricity price. New ZSE invoicing system based on SAP module enables customers to review directly in invoice how much they pay for electricity and how much for distribution fees and system operational costs. Its implementation has been neither smooth nor easy and actually led to a temporary decrease in quality of customer services during the Spring and Summer, particularly for households. On the other hand however, this market segment has benefited in 2005 in comparison to other regions in Slovakia from ZSE ability to maintain the electricity price for 2005 on the 2004 level.