Recent weeks proved to be crucial for our Company’s future. At the turn of February and March, the prospects of CO₂ allowances for 2008-2012 were still unclear. In addition, employees of all companies of Tauron Polska Energia holding looked forward to the results of work of the Company’s Supervisory Board, which in February launched the procedure to appoint new Management Board.

At the time of this letter, the question of emissions allowances was still unresolved. The adjustment suggested by the Ministry of Environment in February was still unfavourable for the energy sector, although it was fairly more beneficial than the proposal of December. Even though we have been offered 10% more allowances, we still need allowances corresponding to approximately 4 million tons to keep the pace with the last year’s production.

We have two solutions to overcome this difficult situation: we may either buy emissions allowances and sell more expensive energy or limit the production, which is rather difficult in the face of more and more probable energy deficit in the country.

Nevertheless, the issue of Tauron Management Board has been resolved. It is optimistic that the new board comprises industry managers as well as experienced energy engineers. Two of the new members have their roots in Południowy Koncern Energetyczny. There is hope that after months of tension and the previous Management Board not working in its full shape, there has come the time for quick and reasonable actions. And no doubt there is a lot to do, since further consolidation of many areas of our activity , investments, development of strategy for the entire group, settlement of the issue of trade and many other affairs can wait no longer... The competition is well ahead of us!

I sincerely wish the new Management Board many successes and declare on my and PKE team’s behalf that we are going to contribute to the works for the benefit of the entire group with even greater involvement. I would also wish to express my gratitude to the previous Management Board for several months of cooperation.

Tauron holding and its subsidiaries, including PKE, are facing numerous challenges. Our task is to cope with them!

JAN KURP