The strategy of the Southern Energy Concern stipulates that the primary purpose of the Concern’s activity is to raise its value from the shareholders’ point of view.

The current makeup of the Capital Group is to a large extent still leftover from the period in which the power plants operating as part of PKE SA today, were independent and carried out their own strategies. At the time of PKE SA’s establishment, the Capital Group numbered 46 companies.

Currently the Concern has shares in 31 companies, including 3 that were established since PKE began to operate.

The implementation of PKE SA’s strategy in relation to the Capital Group’s constituent companies, i.e. the optimization of the Group’s configuration, means organizing the companies according to their potential to generate value. The restructuring program for the Capital Group that was accepted by the Board of PKE SA in March 2006 is a document that lays out the timetable and detailed actions for organizing the Group’s composition in accordance with the strategy currently in effect.

The companies in which the Concern has shares have been divided into the following categories:

• Companies recommended to stay in the PKE Group, with the following being distinguished:
• Companies of strategic importance, which are a part of the Concern’s chain of values, and which should remain in the Group for a long period of time (“strategic companies”),
• Companies that are assigned to realize tactical objectives and which should remain in the Group for the purpose of realizing defined objectives (“tactical companies”). These companies will be subject to periodic reviews designated to define the validity of maintaining the companies in the Group.
• Companies that it is recommended PKE pull its investment out of, with the following being distinguished:
• Companies for which defining the exit mechanism requires additional analyses (“Exit mechanism requires carrying out additional analyses”). Repair/servicing companies, among others, belong to this category.
• Companies lacking the long term potential to generate value for PKE (“companies in relation to which PKE is taking action intended to pull out of the investment”).

The timetable for carrying out the program includes the period up to 2009. The tab “Structure of the Capital Group” shows which category a given company has been assigned to, while the tab “Companies” presents the level of PKE SA’s engagement in a given company.