J&T FINANCE GROUP, a. s. ANNUAL REPORT 2008

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5 TABLE OF CONTENTS Selected Indicators 005 Board of Directors Report 007 The Group s Financial Operations in Report by the Supervisory Board 013 J&T Management Structure 015 FINANCIAL SECTION Independent Auditors Report to the Shereholders, Board of Directors and Supervisory Board of J&T FINANCE GROUP, a. s. 018 Consolidated Income Statement 019 Consolidated Balance Sheet 020 Consolidated Statement of Changes in Equity 022 Consolidated Cash Flow Statement 024 Notes to the Consolidated Financial Statements 039 Contact

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7 SELECTED INDICATORS In thousands of SKK Assets Total assets 104,157, ,101,157 88,877,517 76,676,599 41,585,549 Property plant and equipment 689,596 19,902,279 14,456,945 16,056,390 5,383,718 Investment property 6,290,181 6,157,697 3,161,985 3,809,434 Loans to customers 45,881,296 25,260,143 17,488,872 14,011,253 8,243,385 Cash and cash equivalents 10,537,769 11,875,092 9,118,003 7,432,641 7,082,661 Equity and liabilities Equity 16,198,807 16,420,099 14,513,493 12,237,905 6,977,875 Deposits from banks 7,836,203 21,341,856 19,103,567 20,242,586 8,842,946 Deposits from customers 57,333,360 44,893,236 30,945,238 26,544,297 17,637,277 Income statement Net interest income (expense) -1,323, , , , ,466 Net fee and commission income (expense) -263,339-1,081,112-3,738,004-1,114, ,062 Operating income 40,475,272 38,602,034 36,658,952 17,772,163 10,770,710 Operating expenses -37,844,808-35,929,157-28,939,440-14,498,550-8,820,407 Net profit 3,194,163 1,684,492 2,572,723 4,315, ,679 Ratios ROA 2.87% 1.43% 3.32% 5.71% 1.93% ROE 17.93% 8.62% 18.25% 31.74% 10.02% Average number of Group employees 9,821 8,869 6,357 4,873 3,724 For more detailed information please see consolidated financial statements presented on pages

8 FUNCTIONAL STRUCTURE OF THE CONSOLIDATED J&T GROUP CONSOLIDATED GROUP J&T UNTIL BANKING Banks Investment funds Private equity funds Servicing companies CORPORATE INVESTMENTS Energy Automotive industry Industry Meat-processing industry REAL ESTATE DEVELOPMENT Multifunctional project Hotels and tourism Flats and offices Residental projects Industrial parks CORPORATE SERVICES Airplanes Health Services Sports Media 006

9 BOARD OF DIRECTORS REPORT J&T GROUP With equity exceeding SKK 16 billion, J&T Group ranks among the strongest financial groups in the Czech and Slovak Republics. By 2008 J&T Group has created a consolidated group comprising banks, financial institutions and a number of non-financial entities (investment projects in the energy and industrial sectors, real estate development and services). Functionally, the internal business segmentation of the consolidated group reflected the above mentioned business areas. A clear vision helped the J&T Group to become one of the business leaders in these areas. The Banking segment is strategically focused on clients and transactions requiring a largely individual approach. Besides complex private banking services, the Group s banks and financial institutions also provide standard and mezzanine financing in the areas of real estate development and business acquisitions and trade in securities on behalf of private investors as well as on their own accounts. The Group s clients are not only private individuals but also institutions. The Banking segment is currently represented by J&T Banka, a. s. in the Czech Republic, J&T BANKA, a.s., pobočka zahraničnej banky in the Slovak Republic, Swiss bank J&T Bank (Switzerland) Ltd., J&T Bank (ZAO) in Russia and J&T Bank and Trust Corporation, domiciled in Barbados. Throughout the years, the J&T Group has built a compact, vertically integrated, investment group in the energy sector producing and selling electric power and heat. Also a progressive increase of the share of renewable sources of energy in power production has traditionally been an important part of the segment s strategy. Investments in the industrial sector historically represent an important part of Group s expansion. Companies engaged in engineering, automotive and food processing have been gradually added to the consolidated group. Another pillar of J&T Group activities was represented by real estate development projects comprising development of residential and office premises, hotels, multifunctional projects, industrial and logistic parks. J&T Group achieved leading position in the Slovak real estate market and had previously been playing an increasingly important role in the Czech Republic. J&T Group developed its investment activities also in the service sector, focusing primarily on private airplanes, health services, media and sport. The Group s management believes that for further efficient and dynamic business development, it is necessary to express the mutual relations between financial and nonfinancial entities strictly via financing or investments. By the end of 2010, J&T Group expects to complete the separation of non-financial entities operating in the Corporate Investment, Real Estate and Service segments into separate homogeneous business units (holding companies). The holding companies will be managed and administered by professional management within private equity funds that, in a structure common in the private equity world, will be open to other potential qualified investors (shareholders). Our aim is to provide funds for these holding companies in a way standard for financial institutions and to participate in their operations as a financial investor. In establishing the holding companies the Group has paid significant attention to compliance with arms-length principles and to the system of corporate governance. The Group intends to apply this approach to all other new investment projects as well. ENERGY-INDUSTRIAL HOLDING In February 2009, J&T Group, PPF and Daniel Křetínský concluded a Joint Venture Agreement (JVA) on the establishment of an energy-industrial holding company. This agreement initiated the creation of a new important player in the Central European market. In December 2008 prior to the JVA signing, several energy and industrial projects exited from the consolidated group. The new holding company will include, among others, UNITED ENERGY, a.s., SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s., a 41.1% share in PRAŽSKÁ ENERGETIKA a.s., SOR LIBCHAVY spol. s r.o., ČESKOMORAVSKÝ UZENÁŘSKÝ HOLDING, a.s., a portfolio of companies specialized in power distribution equipment installation, PLZEŇSKÁ ENERGETIKA, a.s. and PRVNÍ ENERGETICKÁ, a.s. J&T Group will act as a financial investor, which will enable the Group to participate in income from the new holding company s investment projects. J&T Group will not, however, take part in the management and administration of the projects or of the holding company as a whole. REAL ESTATE HOLDING The real estate holding company is a new business entity resulting from the Group s historically successful strategy in the real estate segment. Geographically, the new holding company operates primarily in the Slovak and Czech Republics. Real estate projects left the consolidated group in October The most important projects include River Park (SK), Westend Business Park (SK), Prosek Point (CZ) and a portfolio of land holdings (CZ, SK). In the future, we expect that the activities of the holding company will be additionally structured into a real estate development arm and a lucrative real estate arm. 007

10 CONSOLIDATED GROUP UNTIL CONSOLIDATED GROUP FROM 2010 BANKING BANKING NON-FINANCIAL INVESTMENTS Investments Financing Partnerships NEW HOLDING COMPANIES Energy-industrial Holding Real Estate Holding Best Hotel Properties Tatry Mountain Resorts Other separated companies Media NEW INVESTMENT PROJECTS 008

11 The position of J&T Group with respect to the real estate holding company will be the same as in the case of the energy-industrial holding company, namely as a financial investor. This will enable the Group to participate in income from investment projects of the holding company, but the Group will not participate in management and administration of the projects or the holding company itself. BEST HOTEL PROPERTIES The aim of the new hotel company BHP a.s. (Best Hotel Properties) is to build a platform for further development of the most important projects of J&T Group in the tourism industry, such as hotel Baltschug Kempinski Moscow and Crowne Plaza (Bratislava), former Sugarmakers Palace (Palác Cukrovarníků) in Prague and two other Kempinski hotels (Bratislava and Štrbské Pleso). The Group will hold a non-controlling interest up to 20% in the company. TATRY MOUNTAIN RESORTS The separation of investments in the areas of the High and Low Tatras from the consolidated group laid the foundation for Tatry Mountain Resorts holding company. The most important projects of the new holding company will be the tourist centres Tatranská Lomnica and Starý Smokovec, Grandhotel Praha Tatranská Lomnica, Grandhotel Starý Smokovec, resort Jasná Nízke Tatry and hotels Grand Jasná and Tri Studničky, among others. Part of the holding company will also be a lucrative portfolio of lands and real estate property designated for further development. As in the case of BHP a.s., the Group will hold a noncontrolling interest up to 20% in the company. OTHER SEPARATED COMPANIES Since the end of 2008 the process of separation of other projects from J&T consolidated group has been in progress. Namely the projects in the Health Services, Airplanes, Media and Sport sub-segments. 009

12 THE GROUP S FINANCIAL OPERATIONS IN 2008 NET PROFIT At the end of 2008, the Group recognised a net profit of SKK 3.2 billion attributable to the equity holders of the parent company, whereas the loss attributable to the minority shareholders was SKK million. The Group result was significantly influenced by the extraordinary events of the global financial and economic crisis and the separation of non-financial entities from the consolidated group commenced in the last quarter of Entities not yet separated are reported in compliance with International Financial Reporting Standards (IFRS) as Disposal group held for sale. The result generated by the Disposal group held for sale together with the effect of the separation of companies from the consolidated group is recognised as a profit from discontinued operations amounting to SKK 6.6 billion after taxes. Banking J&T Banka, a.s., the cornerstone of the J&T banking segment, reached in 2008 a record-breaking profit before tax of SKK million. The bank also achieved a 29% year-to-year increase in operating profit (SKK 535 million). This increase was primarily caused by an increase in the balance sheet amount accompanied by an increased volume of loans provided and related interest income (year-to-year increase of SKK 210 million). The downturn in the markets and continuing uncertainty of investors impacted the fee income from trading, which decreased by 30% year-on-year to SKK 44.6 million. Companies in the Banking segment also manage investments and trade in public markets. Negative revaluation of investments in our portfolios resulted in a loss of SKK 3.14 billion in the Financial Markets sub-segment. The value of our positions, primarily in Erste Bank der oesterreichischen Sparkassen AG and Unipetrol, a.s., were significantly reduced. However, we consider these losses temporary, until such time as the markets stabilise. Corporate investments The Group achieved consolidated profit before tax of SKK 3.4 billion in the Energy sub-segment. Income from joint ventures and associates increased by SKK million to SKK 1.6 billion primarily due to an increase in share in Pražská Energetika, a.s. from 34% to 41.1%. In 2008, West Bohemia Energy Holding a.s., which is a part of the consolidated group, obtained a 50% share in Plzeňská Energetika a.s. and thus increased its ownership in this company to 100%. Change in the consolidation method of this company from the equity method to full consolidation impacted the operating income (increase of SKK 1.22 billion) and expenses (increase of SKK 1.20 billion). The main reason for the negative result of the Industry sub-segment was a loss resulting from an end to the Group s cooperation in the project 1. Garantovaná. 1. Garantovaná a.s. was separated from the consolidated group in August In 2008 the amount of Operating income in the Industry segment also decreased by SKK million to SKK 12.5 billion. Operating income in 2007 was influenced by extraordinary income resulting from the sale of investments (for example, the sale of Kablo Elektro, a.s.). Real estate development The Group recognised consolidated losses of SKK 168 million in the Real Estate Development segment. Due to the separation of real estate projects from the consolidated group, this result includes development up to the exit dates of the respective companies in the last quarter of the year. Companies operating in the tourism industry recognised a consolidated profit of SKK 38.8 million, representing a significant increase compared to 2007, when these companies had a consolidated loss of SKK 413 million. The Group recognised a consolidated loss of SKK 127 million in the Flats and Offices sub-segment. In 2008, the Group was forced to slow the development of selected projects and the assets were restated at fair value in compliance with the chosen accounting policy. The revaluation of investments to fair value was the largest contributor to the consolidated loss in this area. Similarly, in the Industrial Parks sub-segment, the result decreased by SKK 190 million to SKK 48 million primarily due to the revaluation of these investments. Media Companies within the Media segment recognised a consolidated loss of SKK 494 million in 2008, which was mostly the result of the new Czech news television channel Z1, broadcasting of which commenced in June A general decrease in advertising markets in the second half of 2008 prevented the realization of expected income from the sale of advertising time. At the end of the year, the Group s management successfully optimised costs related to television operations. Initial results in 2009 indicate a positive change in trends. The Slovak company TV JOJ observed improvement in its results. Despite the predicted decrease of 20% in advertising markets in 2009, TV JOJ plans to maintain or eventually improve its operating result due to a continuous increase in viewer ratings. ASSETS AND LIABILITIES Due to the separation of projects from the consolidated group, the amount of total assets decreased by 7.1% to SKK billion. A significant effect of this process is an increase in the share of assets and liabilities of the 010

13 Banking segment of J&T Group. The share of total assets increased from 46.2% to 55.3%, whereas the share of total liabilities increased from 39.6% in 2007 to 49.7% in The share of total assets and liabilities of the Group s Banking segment will continue to increase during the ongoing process of project separation. The most significant changes in the balance sheet were observed in the captions Disposal group held for sale and Loans and advances to customers. As at 31 December 2008 the Disposal group held for sale comprised primarily investments of the Group in the energy and industrial sectors. At the end of 2007, the Group recognised primarily real estate investments as Disposal group held for sale (Crowne Plaza, Tower 115). The most significant assets in this category are investments in: Pražská Energetika, a.s. United Energy, a.s. První energetická a.s. SOR Libchavy spol. s r.o. Českomoravský uzenářský holding, a.s. The Disposal group held for sale amounts to SKK 21.9 billion and comprises primarily equity interest, property, plant and equipment and trade receivables. Liabilities of these companies are recognised under Liabilities associated with disposal group held for sale in the amount of SKK 13.5 billion. This is comprised primarily of Deposits and loans from banks (SKK 9.3 billion) and Trade payables and other liabilities (SKK 1.9 billion). Sale of these assets will result in a ratio of consolidated equity to total consolidated assets exceeding 20%. The Group will take advantage of its high capitalisation during these times of global financial and economic crisis to realize lucrative acquisition opportunities in the market. Deposits and loans from customers as at 31 December 2008 amounted to SKK 45.9 billion, representing more than an 81.6% increase year-on-year. Loans provided to companies in the Corporate Investment, Real Estate Development, Airplanes, Health Services and Sport subsegments were in prior years recognised only at the subsegment level and were eliminated at the Group level. As at 31 December 2008 these companies were no longer part of the consolidated group and therefore no longer eliminated at the Group level. 011

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15 REPORT BY THE SUPERVISORY BOARD The Supervisory Board of J&T FINANCE GROUP, a. s., consisted of three members in It carried out the responsibilities required of it under the law and the Company s Articles of Association. In its capacity as a supervisory body, the Supervisory Board monitored the performance of the Board of Directors of J&T FINANCE GROUP, a. s., and communicated key activities across the entire J&T Group. The Supervisory Board monitored the financial management and implementation of strategic plans. On a regular basis the Supervisory Board was informed about the Company s major transactions, financial situation, and other important events and issues relating to the Company and its individual subsidiaries. The Group s consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS). Separate financial statements were prepared in compliance with the Act on Accounting and other mandatory regulations applicable in the Slovak Republic. The consolidated financial statements prepared in accordance with IFRS were audited by KPMG Slovensko spol. s r.o. KPMG issued its auditors report on 15 July 2009, the full wording of which is published on page 18 of this Annual Report. The Supervisory Board has reviewed the separate and consolidated financial statements submitted to it and has concluded that the accounts and records were maintained in a manner which is transparent and in accordance with the regulations applicable in the Slovak Republic, and that the financial statements provide a true and fair picture of the financial situation of J&T FINANCE GROUP, a. s., and the entire Group as at 31 December The Supervisory Board concurs with the auditors conclusions and acknowledges the auditors report. In light of these circumstances, the Supervisory Board recommends that the General Meeting approve the consolidated financial statements of J&T FINANCE GROUP, a. s., for the year ended 31 December August 10, 2009 Bratislava Marta Tkáčová 013

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17 J&T MANAGEMENT STRUCTURE BOARD OF DIRECTORS Chairman of the Board of Directors Jozef Tkáč Vice-chairman of the Board of Directors Ivan Jakabovič SUPERVISORY BOARD Marta Tkáčová Ivan Jakabovič senior Jana Šuterová TOP MANAGEMENT Patrik Tkáč Ivan Jakabovič Tomáš Martinec Štěpán Ašer Monika Céreová Kamil Bendák Jozef Spišiak Jiří Uvíra Miloš Badida Taťána Turziková Jarmila Jánošová 015

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20 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS, BOARD OF DIRECTORS AND SUPERVISORY BOARD OF J&T FINANCE GROUP, a. s. We have audited the accompanying financial statements of J&T FINANCE GROUP, a. s. and its subsidiary companies ( the Group ), which comprise the consolidated balance sheet as at 31 December 2008, and the consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements Management as represented by the statutory body is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2008 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards. Emphasis of Matter Without qualifying our audit opinion, we draw attention to the fact that the Group started in 2008 a long-term planned process to reorganise its activities. The effect of the related transactions on the Group s financial position and performance is described in Notes 3, 4 and 26 attached to these financial statements. The reader should refer to those notes for a proper understanding of the financial statements. Bratislava, 15 July 2009 Auditing company: Responsible auditor: Responsible audit partner: KPMG Slovensko spol. s r. o. Ľuboš Vančo Marc Derydt Licence SKAU No. 96 Licence SKAU No

21 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008 In thousands of SKK Note Interest and similar income 5 2,909,899 1,892,056 Interest expense and similar charges 5 (3,274,862) (1,990,585) Net interest expense (364,963) (98,529) Fee and commission income 1,134, ,554 Fee and commission expense 6 (1,316,731) (1,440,314) Net fee and commission expense (182,194) (906,760) Dealing profits (losses), net 7 (3,433,559) 1,908,576 Negative goodwill 8 62,973 16,520 Other operating income 9 8,423,666 3,519,439 Operating income 5,053,080 5,444,535 Personnel expenses 10 (708,450) (2,339,824) Depreciation and amortisation 13, 14 (258,713) (141,177) Goodwill impairment 8, 14 (325,006) Impairment of property, plant and equipment and intangible assets 13, 14 (253,571) (44,808) Other operating expenses 11 (2,927,800) (3,810,541) Operating expenses (4,148,534) (6,661,356) Increase in allowance for impairment of loans 21 (2,323,566) (317,249) Profit (losses) from operations (1,966,177) (2,539,359) Income (expense) from associates and joint ventures 16 (1,515,550) 399,557 Profit (loss) before tax (3,481,727) (2,139,802) Income tax expense 12 (115,235) (188,098) Profit (loss) for the period from continuing operations (3,596,962) (2,327,900) Profit for the period from discontinued operations 4 6,581,769 3,929,025 Profit for the period 2,984,807 1,601,125 Attributable to: Equity holders of the parent 3,194,163 1,684,492 continuing operations (3,422,940) (2,281,753) discontinued operations 6,617,103 3,966,245 Minority interest (209,356) (83,367) continuing operations (174,022) (46,147) discontinued operations (35,334) (37,220) 2,984,807 1,601,125 Profit from discontinued operations in 2007 includes the whole year of operations of the entities discontinued in In 2008, the results of the discontinued entities are included up to the date of disposal. The notes presented on page 39 to page 111 form an integral part of the consolidated financial statements. An analysis of the income statement by segment is provided in Note 2 Segment information. 019

22 CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008 Assets In thousands of SKK Note Property, plant and equipment ,596 19,902,279 Intangible assets 14 5,069,513 8,372,027 Investment property 15 6,290,181 Investments in joint ventures and associates 16 2,001 14,060,975 Trade receivables and other assets , ,091 Loans and advances to customers 20, 21 8,235,438 2,802,939 Receivables from the sale of discontinued operations 4,065,964 Financial assets at fair value through profit or loss ,487 Financial instruments held to maturity 25,652 20,858 Deferred tax assets 17 26, ,674 Total non-current assets 18,895,149 52,233,511 Inventories ,781 2,139,317 Trade receivables and other assets 19 4,698,823 11,166,519 Loans and advances to customers 20, 21 37,645,858 22,457,204 Receivables from the sale of discontinued operations 1,758,621 Financial assets at fair value through profit or loss 23 7,606,294 7,502,228 Financial instruments held to maturity 5,208 21,993 Securities available for sale ,492 1,130,242 Cash and cash equivalents 25 10,537,769 11,875,092 Disposal group held for sale 26 21,849,918 3,575,051 Total current assets 85,262,764 59,867,646 Total assets 104,157, ,101,157 Equity In thousands of SKK Note Share capital 950, ,000 Share premium 450, ,000 Retained earnings and other reserves 14,798,807 15,020,099 Equity attributable to equity holders of the parent 27 16,198,807 16,420,099 Minority interest ,871 2,159,361 Total equity 16,648,678 18,579,

23 Liabilities In thousands of SKK Note Deposits and loans from banks 29 2,149,914 13,006,777 Deposits and loans from customers 30 1,807,757 1,932,666 Subordinated debt 34 2,798,345 2,497,519 Trade payables and other liabilities , ,338 Provisions ,814,907 Deferred tax liabilities ,892 3,527,567 Total non-current liabilities 7,673,970 24,662,774 Deposits and loans from banks 29 5,686,289 8,335,079 Deposits and loans from customers 30 55,525,603 42,960,570 Subordinated debt 34 3,471 4,988 Financial liabilities at fair value through profit or loss , ,509 Trade payables and other liabilities 33 4,407,553 13,237,151 Current income tax 47, ,932 Provisions 31 58, ,894 Liabilities associated with disposal group held for sale 26 13,534,870 2,856,800 Total current liabilities 79,835,265 68,858,923 Total liabilities 87,509,235 93,521,697 Total equity and liabilities 104,157, ,101,157 The notes presented on page 39 to page 111 form an integral part of the consolidated financial statements. 021

24 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008 In thousands of SKK Share capital Share premium Non-distributable reserves Balance at 1 January , , ,145 Foreign exchange translation differences Change in fair value of financial assets available for sale Net income recognised directly in equity Profit for the year Total recognised income and expense Contribution to equity by shareholders other than issue of share capital Transfer to legal reserve fund 26,933 Dividends Effect of disposals (83,182) Effect of acquisitions Effect of changes in shareholdings on minority interest Balance at 31 December , ,000 96,896 In thousands of SKK Share capital Share premium Non-distributable reserves Balance at 1 January , ,000 96,896 Foreign exchange translation differences Revaluations from step acquisitions Revaluations on transfers to investment property Change in fair value of financial assets available for sale Cash flow hedges: Effective portion of changes in fair value Net income recognised directly in equity Profit for the year Total recognised income and expense Transfer to legal reserve fund 232,896 Dividends Effect of disposals (34,697) Effect of acquisitions Effect of changes in shareholdings on minority interest Balance at 31 December , , ,095 The notes presented on page 39 to page 111 form an integral part of the consolidated financial statements. 022

25 Foreign exchange translation reserve Revaluation reserve Retained earnings Total attributable to equity holders of the parent Minority interest 370, ,677 11,762,452 14,513,493 1,676,157 16,189, , ,547 23, ,094 (44,662) (44,662) (44,662) 329,547 (44,662) 284,885 23, ,432 1,684,492 1,684,492 (83,367) 1,601, ,547 (44,662) 1,684,492 1,969,377 (59,820) 1,909,557 (62,771) (62,771) (62,771) (26,933) (43,938) (43,938) 83,182 (66,095) (66,095) 864, ,375 (211,318) (211,318) 699, ,015 13,440,422 16,420,099 2,159,361 18,579,460 Total Foreign exchange translation reserve Revaluation reserve Retained earnings Total attributable to equity holders of the parent Minority interest 699, ,015 13,440,422 16,420,099 2,159,361 18,579,460 (1,228,934) (1,228,934) (114,982) (1,343,916) 90,144 90,144 90,144 63,581 63,581 63,581 (2,265) (2,265) (2,265) 264, , ,373 (1,228,934) 415,833 (813,101) (114,982) (928,083) 3,194,163 3,194,163 (209,356) 2,984,807 (1,228,934) 415,833 3,194,163 2,381,062 (324,338) 2,056,724 (232,896) (2,602,354) (2,602,354) (126,908) (2,729,262) (190,119) 224,816 (1,097,743) (1,097,743) 124, ,503 (285,004) (285,004) (529,168) 1,008,729 14,024,151 16,198, ,871 16,648,678 Total 023

26 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008 Operating Activities In thousands of SKK Note Profit from operations 3,169, ,927 Adjustments for: Depreciation and amortization 13, 14 1,853,617 1,557,642 Impairment losses 13, , ,147 Revaluation of investment property 9 (131,429) (678,865) Revaluation of financial instruments at fair value 3,174,983 (464,576) (Gain) / loss on disposal of property, plant and equipment, investment property and intangible assets 9 153,073 (556,469) (Gain) / loss on the sale of emission rights 9 126,129 (508) Profit on disposal of subsidiaries, special purpose entities, joint ventures, associates and minority interests 9 (6,377,951) (3,527,109) (Profit) / loss on disposal of financial assets 159,168 (1,442,171) Interest expense, net 5 1,323, ,589 Increase in allowance for impairment of loans 21 2,323, ,249 Change in impairment of trade receivables and other assets 315,012 (308,716) Change in impairment of inventories 48,901 56,443 Change in provisions 31 (2,393,921) (264,068) Negative goodwill 8 (267,012) (46,196) Unrealised foreign exchange gains, net 2,522, ,361 Operating profit before changes in working capital 6,305,195 (2,902,320) Change in available for sale and held to maturity financial assets 228,779 (5,946,312) Change in loans and advances to customers 1,191,226 (7,487,543) Change in trade receivables and other assets (4,690,109) (2,808,828) Change in inventories (123,091) 104,985 Change in deposits and loans from banks (947,747) 1,629,479 Change in deposits and loans from customers 10,545,231 13,763,480 Change in trade payables and other liabilities 3,601, ,381 Cash generated from / (used in) operations 16,111,016 (2,917,678) Interest paid (3,184,711) (2,241,379) Income taxes paid (815,435) (1,182,348) Cash flows generated from / (used in) operating activities 12,110,870 (6,341,405) Investing Activities In thousands of SKK Note Purchase of financial instruments at fair value through profit or loss (8,750,781) (12,750,059) Proceeds from sale of financial instruments at fair value through profit or loss 4,986,093 18,167,104 Acquisition of property, plant and equipment, investment property and intangible assets (6,617,231) (4,993,872) Proceeds from sale of emission rights 1,325,851 6,105 Proceeds from sale of property, plant and equipment, investment property and other intangible assets 1,547,076 2,083,922 Acquisition of associates and joint ventures 3 (194,689) Acquisition of subsidiaries and special purpose entities, net of cash acquired 3 (1,465,023) (2,031,190) Net cash (outflow) / inflow from disposal of subsidiaries and special purpose entities 3 (2,179,556) 5,611,310 Increase in participation in existing subsidiaries and special purpose entities 3 (319,766) (188,823) Interest received 1,929,129 1,191,404 Dividends received 308,592 34,159 Cash flows generated from / (used in) in investing activities (9,235,616) 6,935,

27 Financing Activities In thousands of SKK Note Subordinated debt issued 299,309 2,502,507 Payments for finance lease (30,482) (77,698) Dividends paid (2,729,262) (43,938) Cash flows generated from / (used in) by financing activities (2,460,435) 2,380,871 Net increase in cash and cash equivalents 414,819 2,974,837 Cash and cash equivalents at beginning of the year 11,982,459 9,346,397 Effect of exchange rate fluctuations on cash held (749,383) (338,775) Cash and cash equivalents at end of the year 11,647,895 11,982,459 Cash and cash equivalents 25 10,537,769 11,875,092 Cash and cash equivalents included in disposal group held for sale 26 1,110, ,367 Cash and cash equivalents at end of the year 11,647,895 11,982,459 See Note 4 Discontinued operations for the cash flows relating to operating, investing and financial activities from discontinued operations. Cash and cash equivalents includes cash included in disposal group, see Note 26 Disposal group held for sale. The notes presented on page 39 to page 111 form an integral part of the consolidated financial statements. 025

28 J&T FINANCE GROUP, a. s. (the Parent Company or the Company ) is a joint stock company having its legal seat and domicile at Lamačská cesta 3, Bratislava. The Company was founded on 7 February 1995 and incorporated into the commercial register on 20 March In 2008 the Company s shareholder structure changed, as on 14 July 2008 J&T Finance Group II, a.s. sold its 44.53% interest in the Company s share capital to Techno Plus, v.o.s., a partnership between Jozef Tkáč and Ivan Jakabovič, which thus became the sole shareholder. The shareholders of the Company as at 31 December 2008 and 31 December 2007 were as follows: Interest in share capital Voting rights TSKK % % 31 December 2008 Techno Plus, a.s. 950, Total 950, December 2007 Techno Plus, v.o.s. 526, J&T Finance Group II, a.s. 423, Total 950, The consolidated financial statements of the Company for the year ended 31 December 2008 comprise the Parent Company and its subsidiaries (together referred to as the Group ) and the Group s interests in associates, jointly controlled entities and special purpose entities. Until 2008 the main activities of the Group were investment and private banking, the development of real estate properties for sale and commercial use, asset management and corporate investments in the energy and industry sectors. In the last quarter of 2008, the Group started a long-term planned process of reorganisation of its activities, with the aim to separate its banking activities from the other business segments. The first part of the process resulted in disposal of the Real Estate segment by the end of 2008, and partial disposal of the Corporate Investment segment (energy and industry sectors). At the same time, governance of the Group was changed, leading notably to the termination of the positions of Partners and Top Managers. As at 31 December 2008, the disposed or partially disposed non-banking segments are under control of the former partners of the Group. Completion of the reorganisation process is expected in 2010 and, going forward, the Group will focus its activities on private banking, financial markets and investments in specific projects. 026

29 SIGNIFICANT ACCOUNTING POLICIES (a) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ). The financial statements were approved by the Board of Directors on 15 July (b) Basis of preparation The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, derivative financial instruments, financial assets and liabilities at fair value through profit or loss and available for sale. Non-current assets held for sale and discontinued operations are stated at the lower of their carrying amount and fair value less costs to sell. The consolidated financial statements are presented in Slovak Crowns, rounded to the nearest thousand. The accounting policies have been consistently applied by the Group enterprises and are consistent with those used in the previous year. Certain comparative amounts have been reclassified to conform with the current year s presentation, notably with regard to presentation of discontinued operations. Financial statements prepared in compliance with International Financial Reporting Standards require various judgements, assumptions, and estimates to be exercised that affect the reported amounts of assets, liabilities, income and expenses. Actual results will likely differ from these estimates. Critical accounting estimates and judgements made by management with a significant risk of material adjustment in the next year are discussed in Note 1 Critical accounting estimates and assumptions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. Issued but not yet effective International Financial Reporting Standards A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2008, and have not been applied in preparing these financial statements: The revised IFRS 3 will allow entities to choose to measure non-controlling interests using the existing IFRS 3 method (proportionate share of the acquiree s identifiable net assets) or at fair value. The revised IFRS 3 is more detailed in providing guidance on the application of the purchase method to business combinations. The requirement to measure at fair value every asset and liability at each step in a step acquisition for the purposes of calculating a portion of goodwill has been removed. Instead, goodwill will be measured at acquisition date as the difference between the fair value of any investment in the business held before the acquisition, the consideration transferred and the net assets acquired. Acquisition-related costs will be accounted for separately from the business combination and therefore recognised as expenses rather than included in goodwill. An acquirer will have to recognise at the acquisition date a liability for contingent purchase consideration. Changes in the value of that liability after the acquisition date will be recognised in accordance with other applicable IFRSs, as appropriate, rather than by adjusting goodwill. The revised IFRS 3 brings into its scope business combinations involving only mutual entities and business combinations achieved by contract alone. The Group is currently assessing the impact of the amended standard on its financial statements. The revised standard is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July IFRS 8 requires an entity to report financial and descriptive information about its reportable segments. Generally, financial information is required to be reported on the basis that is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments (management approach). The standard requires an explanation of how segment profit or loss and segment assets and liabilities are measured for each 027

30 reportable segment. IFRS 8 requires an entity to report information about the revenues derived from its products or services (or groups of similar products and services), about the countries in which it earns revenues and holds assets, and about major customers, regardless of whether that information is used by management in making operating decisions. IFRS 8 will affect the presentation and disclosure of segment information. There will be no effect on reported profit or net assets. The provisions of IFRS 8 are effective for annual periods beginning on or after 1 January The main change in IAS 1 is the replacement of the income statement by a statement of comprehensive income which will also include all non-owner changes in equity, such as the revaluation of available-for-sale financial assets. Alternatively, entities will be allowed to present two statements: a separate income statement and a statement of comprehensive income. The revised IAS 1 also introduces a requirement to present a statement of financial position (formerly balance sheet) at the beginning of the earliest comparative period whenever the entity restates comparatives due to reclassifications, changes in accounting policies, or corrections of errors. The Group expects the revised IAS 1 to affect the presentation of its financial statements but to have no impact on the recognition or measurement of specific transactions and balances. The revised standard is effective for annual periods beginning on or after 1 January The revised IAS 23 was issued in March The main change to IAS 23 is the removal of the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. An entity is, therefore, required to capitalise such borrowing costs as part of the cost of the asset. The revised standard applies prospectively to borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 January 2009 and the Group will adopt this revised standard accordingly. The revised IAS 27 will require an entity to attribute total comprehensive income to the owners of the parent and to the non-controlling interests (formerly minority interests) even if this results in the non-controlling interests having a negative balance. The current standard requires excess losses to be allocated to the owners of the parent, except to the extent that the non-controlling interests have a binding obligation and are able to make an additional investment to cover the losses. The revised standard also specifies that changes in a parent s ownership interest in a subsidiary that do not result in the loss of control must be accounted for as equity transactions. It also specifies how an entity should measure any gain or loss arising on the loss of control of a subsidiary. Any investment retained in a former subsidiary will have to be measured at its fair value at the date when control is lost. The current standard requires the carrying amount of an investment retained in a former subsidiary to be considered as its cost on initial measurement of the financial asset in accordance with IAS 39, Financial Instruments: Recognition and Measurement. The Group is currently assessing the impact of the amended standard on its financial statements. The revised standard is effective for annual periods beginning on or after 1 July The IAS 32 and IAS 1 Amendment requires classification as equity of some financial instruments that meet the definition of a financial liability. The Group is currently assessing the impact of the amendment on its financial statements. The provisions of the amended standards are effective for annual periods beginning on or after 1 January Amendments to IAS 39 Financial Instruments: Recognition and Measurement Eligible Hedged Items IAS 39 was amended to clarify the application of existing principles that determine whether specific risks or portions of cash flows are eligible for designation in a hedging relationship. The amendments will become mandatory for the Group s 2010 financial statements, with retrospective application required. The Group is currently in the process of evaluating the potential effect of this amendment. Embedded Derivatives When Reclassifying Financial Instruments The reclassification amendment allows entities to reclassify particular financial instruments out of the fair value through profit or loss category in specific circumstances. This amendment clarifies that on reclassification of a financial asset out of the fair value through profit or loss category, all embedded derivatives have to be assessed and, if necessary, separately accounted for. The amendment applies retrospectively and is required to be applied for annual periods ending on or after 30 June The International Accounting Standards Board made certain amendments to existing standards as part of its annual improvements project. The effective dates for these amendments vary by standard and most will be applicable to the Group s 2009 financial statements. The Group is currently assessing the impact of these amendments on its financial statements. 028

31 Other amended standards and new interpretations not yet effective that are currently not applicable to the Group include IFRS 1, IFRS 2, and IFRIC 12 through 18. Other International Financial Reporting Standards The Group has not early adopted any IFRS standards where adoption is not mandatory at the balance sheet date. Where transition provisions in adopted IFRS give an entity the choice of whether to apply new standards prospectively or retrospectively, the Group elects to apply the Standards prospectively from the date of transition. (c) Basis of consolidation (i) Subsidiaries Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise, so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The consolidated financial statements include the Group s interests in other entities based on the Group s ability to control such entities regardless of whether control is actually exercised or not. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. (ii) Associates Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued, except to the extent that the Group has incurred obligations in respect of the associate. (iii) Jointly controlled entities (joint ventures) Jointly controlled entities are those enterprises over whose activities the Group has joint control, established by contractual agreement. The consolidated financial statements include the Group s share of the total recognised gains and losses of joint ventures on an equity accounted basis, from the date that joint control commences until the date that joint control ceases. (iv) Special purpose entities ( SPEs ) The Group operates partly through SPEs, in which it does not have any direct or indirect shareholdings. Consolidated special purpose entities are principally those from which the Group will obtain the majority of the economic benefits embodied in or to be realised by those entities. (v) Consolidation scope There are 72 companies included in the consolidation as at 31 December 2008 (2007: 248). All fully consolidated companies prepared their annual financial statements at 31 December The companies are listed in Note 44, and this list is based on ownership hierarchy. Although the Group does not own shares in the SPEs, the majority of the economic benefits belong to the Group (refer to accounting policy c.iv). (vi) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group s interest in the enterprise. Unrealised gains arising from transactions with associates are eliminated against the investment in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 029

32 (vii) Purchase method of accounting The purchase method of accounting is used to account for the acquisition of subsidiaries of the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus the costs directly attributable to the acquisition. The excess of the cost of the acquisition over the fair value of the Group s share of the identifiable assets acquired and liabilities and contingent liabilities assumed is recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is reassessed and any excess remaining after that reassessment is recognised immediately in the income statement. Acquisitions of shares from minority shareholders subsequent to obtaining control of a subsidiary are accounted for at the carrying values of assets, equity instruments and liabilities as at the date of acquisitions of such additional shares. The excess of cost over the carrying value of the Group s share of these assets, equity instruments and liabilities is recorded as goodwill. If the cost of acquisition is less than the carrying value of the Group s share acquired, the excess is recognised in the income statement. (viii) Tax effect of inclusion of the consolidated subsidiaries reserves The consolidated financial statements do not include the tax effects that might arise from transferring the consolidated subsidiaries reserves to the accounts of the Parent Company, since no distribution of profits, not taxed at the source, is expected in the foreseeable future, and the Group considers that these reserves will be used as self-financing resources at each consolidated subsidiary. (ix) Unification of accounting principles The accounting principles and procedures applied by the consolidated companies in their financial statements were unified in the consolidation, and agree with the principles applied by the Parent Company. (d) Foreign currency (i) Foreign currency transactions Items included in the financial statements of each of the Group s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Slovak Crowns, which is the Company s functional and presentation currency. Transactions in foreign currencies are translated into Slovak Crowns at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Slovak Crowns at the balance sheet date at the exchange rate of the National Bank of Slovakia ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated into Slovak Crowns at the foreign exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into Slovak Crowns at the foreign exchange rates ruling at the dates the fair values are determined. (ii) Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into Slovak Crowns at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated into Slovak Crowns at the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are recognised directly in equity. Following the Euro conversion on 1 January 2009, assets and liabilities denominated in Slovak crowns (except for advance payments made and advance payments received) will be translated to Euro currency according to the official Euro conversion rate ( SKK/EUR), rather than the exchange rate announced by the National Bank of Slovakia as of the Balance Sheet date and are recorded with an impact on the income statement in

33 (iii) Embedded derivatives Hybrid financial instruments are a combination of non-derivative host contracts and derivative financial instruments (embedded derivatives). Subject to certain conditions, IAS 39 Financial Instruments: Recognition and Measurement requires that embedded derivative components be separated from the host contracts and separately reported and valued. (e) Financial instruments (i) Classification Financial instruments at fair value through profit or loss are those that the Group principally holds for trading, that is, with the purpose of short-term profit taking. These include investments and derivative contracts that are not designated as effective hedging instruments and liabilities from short sales of financial instruments. Loans and advances to banks and customers are non-derivative financial assets with fixed and determinable payments, not quoted in an active market, which are not classified as securities available for sale or held to maturity or as financial assets at fair value through profit or loss. Held-to-maturity assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the intent and ability to hold to maturity. Available-for-sale financial assets are those non-derivative financial assets that are not designated at fair value through profit or loss, loans and advances to banks and customers or as held to maturity. (ii) Recognition Financial assets at fair value through profit or loss and available-for-sale assets are recognised on the date the Group commits to purchase the assets. Regular way purchases and sales of financial assets including held-to-maturity assets are accounted for at trade date. Loans and advances to banks and customers are recognised on the day they are acquired by the Group. (iii) Measurement Financial instruments are measured upon initial recognition at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs directly attributable to the acquisition or issue of the financial instrument. Subsequent to initial recognition, financial assets are measured at their fair value, except for loans and advances to customers and held-to-maturity instruments, which are measured at amortised cost. After initial recognition, financial liabilities are measured at amortised cost, except for financial liabilities at fair value through profit or loss. In measuring amortised cost, any difference between cost and redemption value is recognised in the income statement over the period of the asset or liability on an effective interest rate basis. (iv) Fair value measurement principles The fair value of financial instruments is based on their quoted market price at the balance sheet date without any deduction for transaction costs. If a quoted market price is not available, the fair value of the instrument is estimated by management using pricing models or discounted cash flows techniques. Where discounted cash flow techniques are used, estimated future cash flows are based on management s best estimates and the discount rate is a market-related rate at the balance sheet date for an instrument with similar terms and conditions. Where pricing models are used, inputs are based on market-related measures at the balance sheet date. 031

34 (v) Gains and losses on subsequent measurement Gains and losses arising from a change in fair value are recognised in the income statement for instruments at fair value through profit or loss and directly in equity as a revaluation difference for assets available for sale. Changes in fair value of available-for-sale assets are derecognised from equity through profit or loss at the moment of sale. Interest income and expense from available-for-sale securities are recorded in the income statement by applying the effective interest rate method. (vi) Derecognition A financial asset is derecognised when the Group loses control over the contractual rights that comprise that asset. This occurs when the rights are realised, expire or are surrendered. A financial liability is derecognised when the Group s obligations specified in the contract expire or are discharged or cancelled. Available-for-sale assets and assets at fair value through profit or loss that are sold are derecognised and corresponding receivables from the buyer for the payment are recognised as of the date the Group commits to sell the assets. Held-to-maturity instruments and loans and advances to banks and customers are derecognised on the day they are sold by the Group. (vii) Accounting for hedging instruments Hedging instruments which consist of derivatives associated with a currency risk are classified either as cash-flow hedges or fair value hedges. From the inception of the hedge, the Group maintains a formal documentation of the hedging relationship and the Group s risk management objective and strategy for undertaking the hedge. The Group also periodically assesses the hedging instrument s effectiveness in offsetting the exposure to changes in the hedged item s fair value or cash flows attributable to the hedged risk. In case of a cash flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity and the ineffective portion of the gain or loss on the hedging instrument is recognised in profit or loss. The movement in the revaluation reserve from hedging instruments in equity is disclosed in the Consolidated statement of changes in equity. In case of a fair value hedge, the gain or loss from remeasuring the hedging instrument at fair value is recognised in profit or loss. (f) Cash and cash equivalents Cash and cash equivalents comprise cash balances on hand and in banks, cash deposited with central banks and shortterm highly liquid investments with original maturities of three months or less, including treasury bills and other bills eligible for rediscounting with central banks. (g) Loans and advances to banks and customers Loans and advances to banks and customers originated by the Group are classified as originated loans and receivables. Loans and advances are reported net of impairment allowance to reflect the estimated recoverable amounts (refer to accounting policy k). (h) Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Purchased inventory is stated at cost, which includes the purchase price and other directly attributable expenses incurred in acquiring the inventories and bringing them to their existing location and condition. Inventories of a similar 032

35 nature are valued using the weighted average method except for the energy production segment where the first-in firstout principle is used. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. (i) Sale and repurchase agreements Where securities are sold under a commitment to repurchase at a predetermined price (repos), they remain on the balance sheet and a liability is recorded equal to the consideration received. Conversely, securities purchased under a commitment to resell (reverse repos) are not recorded on the balance sheet and the consideration paid is recorded as a loan. The difference between the sale price and the purchase price is treated as interest and accrued evenly over the life of the transaction. Repos and reverse repos are recognised on a settlement date basis. (j) Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet when the Group has a legally enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis. (k) Impairment The carrying amounts of the Group s assets, other than inventories (refer to accounting policy h), investment properties (refer to accounting policy n) and deferred tax assets (refer to accounting policy t) are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such indication exists, the asset s recoverable amount is estimated. Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation, but are tested annually for impairment as part of the cash generating unit to which they belong. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Loans and advances are presented net of impairment allowances. Allowances for impairment are determined based on the credit standing and performance of the borrower and take into account the value of any collateral or third-party guarantee. The recoverable amount of the Group s investment in held-to-maturity securities and receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest rate computed upon initial recognition of these financial assets). Receivables with a short duration are not discounted. The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss in respect of a held-to-maturity security or receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. An impairment loss in respect of an investment in an equity instrument classified as available-for-sale is not reversed through the income statement. If the fair value of a debt instrument classified as available-for-sale increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in the income statement, then the impairment loss is reversed, with the amount of the reversal recognised in the income statement. An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss no longer exists and there has been a change in the estimates used to determine the recoverable amount. 033

36 An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (l) Property, plant and equipment (i) Owned assets Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (refer to accounting policy k). Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, at which time it is reclassified as investment property. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items (major components) of property, plant and equipment. (ii) Leased assets Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases. Leased assets are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see below) and impairment losses (see accounting policy k). (iii) Subsequent expenditure Subsequent expenditure is capitalised if it is probable that the future economic benefits embodied in the part of property, plant and equipment will flow to the Group and its cost can be measured reliably. All other expenditures including the costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as an expense as incurred. (iv) Depreciation Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of items of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows: Buildings 40 years Equipment including airplanes 5-30 years Fixtures, fittings and others 5-10 years Depreciation methods and useful lives, as well as residual values, are reassessed annually at the reporting date. (m) Intangible assets (i) Goodwill and intangible assets acquired in a business combination Goodwill represents the excess of the cost of an acquisition over the fair value of the Group s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included under intangible assets. Goodwill on acquisitions of associates and joint ventures is included in the carrying amount of investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Negative goodwill arising on an acquisition is reassessed and any excess remaining after the reassessment is recognised in the income statement. 034

37 Intangible assets acquired in a business combination are recorded at fair value on the acquisition date if the intangible asset is separable or arises from contractual or other legal rights. Intangible assets with an indefinite useful life are not subject to amortisation and are recorded at cost less impairment. Intangible assets with a definite useful life are amortised over their useful lives and are recorded at cost less accumulated amortisation and impairment. (ii) Players acquisition costs The costs associated with the acquisition of players registrations at AC Sparta Praha fotbal, a.s. are capitalised as intangible assets. These costs are amortised over the period covered by a player s initial contract. When a player s contract is extended, any cost associated with securing the extension is added to the unamortised balance at the date of the amendment and that value is amortised over the remaining revised contract life. Where a part of the consideration payable on acquiring a player is contingent on a future event, this amount is recognised once it is probable, rather than possible, that the event will occur and is amortised from the start of the year in which the contingent payment becomes probable. (iii) Emission rights Emission rights are accounted for under the cost model. Initially, emission rights are recognized at their fair values with reference to an active market as a non-depreciable intangible asset with a corresponding deferred income amount (government grant). The consumption of rights is reflected in expenses on a continuous basis based on the actual production of emissions, with a corresponding decrease in the carrying value of deferred income on a systematic basis over the period for which the rights were issued. For a shortage of rights, a provision is recorded based on current fair values. Any surplus of rights is sold on the open market. (iv) Software, TV format, brands and other intangible assets Software and other intangible assets acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (refer to accounting policy k). TV format and brands as newly recognized intangible assets acquired in business combinations (based on IFRS 3 requirements) are recorded at their fair value as at acquisition date. The useful lives are usually finite. Those intangible assets that have an indefinite useful life are not amortised and are tested annually for impairment. Their useful life is reviewed at each period-end to assess whether events and circumstances continue to support an indefinite useful life. (v) Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets other than goodwill, from the date the asset is available for use. The estimated useful lives are as follows: Software 4 years Other intangible assets including players contracts 2-9 years TV format Indefinite Brand and customers relationships Company specific (n) Investment property Investment property is property held by the Group either to earn rental income or for capital appreciation or for both. Investment property is stated at fair value, as determined by an independent registered valuer or by management. Fair value is assessed based on current prices in an active market for similar properties in the same location and condition, or where not available, by applying generally applicable valuation methodologies. Any gain or loss arising from a change in fair value is recognised in the income statement. 035

38 Rental income from investment property is accounted for as described in accounting policy s. (o) Provisions A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. (i) Partners remunerations The provision for partners remuneration represents the best estimate of future costs for remuneration of partners of the Group. The provision is measured based on expected profits to be derived from the projects carried out by the Group. Due to the nature of the various schemes there exists uncertainties as to both the amounts and timings of these payments. (ii) Employee benefits The Group s net obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefits that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value. The discount rate is the yield at the balance sheet date in high quality bonds that have maturity dates approximating the terms of the Group s obligations. (iii) Warranties A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and weighting of all possible outcomes against associated probabilities. (p) Interest income and expense Interest income and expense is recognised in the income statement as it accrues. Interest income and expense includes the amortisation of any discount or premium or other differences between the initial carrying amount of an interest bearing instrument and its amount at maturity calculated on an effective interest rate basis. All borrowing costs are recognised in the income statement. (q) Fee and commission income and expense Fee and commission income arises on financial services provided by the Group, including cash management services, brokerage services, investment advice and financial planning, investment banking services, project and structured finance transactions, and asset management services. Assets under management comprising all client assets managed or held for investment purposes by the Group in its own name, but for the account of third parties, are not reported in its consolidated balance sheet (refer to Note 40 Assets under management). Commissions received from such business are shown in fee and commission income. Fee and commission income and expense are recognised when the corresponding services are provided or received. (r) Dealing profits, net Dealing profits, net includes gains and losses arising from disposals and changes in the fair value of financial assets and liabilities available for sale and at fair value through profit or loss, as well as gains and losses from foreign exchange trading. (s) Rental income Rental income from investment property is recognised in the income statement on a straight-line basis over the term of the lease. (t) Income tax Income tax on the profit for the year comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. 036

39 Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. No temporary differences are recognised on the initial recognition of goodwill. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. Income tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the unused tax losses and credits can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (u) Operating and finance lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Minimum lease payments for finance leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. (v) Research and development services Revenue from research and development services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the balance sheet date. (w) Revenue from goods sold and services rendered Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed. No revenue is recognised if there are significant uncertainties regarding the recovery of the consideration due, associated costs or the possible return of goods. (x) Construction contracts Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date, measured as the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer, it is probable that they will result in revenue and they can be measured reliably. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. (y) Trade and other payables Trade and other payables are stated at amortised cost. (z) Dividends Dividends are recognised in the statement of changes in equity and recorded as liabilities in the period in which they are declared. 037

40 (aa) Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (ab) Non-current assets held for sale and discontinued operations Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (and all assets and liabilities in a disposal group) are re-measured in accordance with applicable IFRSs. Then, on initial classification as held for sale, non-current assets and disposal groups are recognised at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group (discontinued operation) is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, and investment property, which continue to be measured in accordance with the Group s accounting policies. Impairment losses on initial classification as held for sale are included in profit or loss, even when there is a revaluation. The same applies to gains and losses on subsequent re-measurement. Gains are not recognised in excess of any cumulative impairment loss. Any gain or loss on the re-measurement of a non-current asset (or disposal group) classified as held for sale that does not meet the definition of a discontinued operation is included in profit or loss from continuing operations. (ac) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards different from those of other segments. The Group s primary format for segment reporting is based on business segments. 038

41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER Critical accounting estimates and assumptions 2. Segment information 3. Acquisitions and disposals of subsidiaries, special purpose entities, joint ventures and associates 4. Discontinued operations 5 Net interest expense 6. Fee and commission expense 7. Dealing profits (losses), net 8. Goodwill impairment and negative goodwill 9. Other operating income 10. Personnel expenses 11. Other operating expenses 12. Income tax 13. Property, plant and equipment 14. Intangible assets 15. Investment property 16. Investments in joint ventures and associates 17. Deferred tax assets and liabilities 18. Inventories 19. Trade receivables and other assets 20. Loans and advances to customers 21. Allowance for impairment of loans 22. Repurchase and resale agreements 23. Financial assets at fair value through profit or loss 24. Securities available for sale 25. Cash and cash equivalents 26. Disposal group held for sale 27. Shareholders equity 28. Minority interest 29. Deposits and loans from banks 30. Deposits and loans from customers 31. Provisions 32. Financial liabilities at fair value through profit or loss 33. Trade payables and other liabilities 34. Subordinated debt 35. Fair value information 36. Financial commitments and contingencies 37. Operating leases 38. Risk management policies and disclosures 39. Fiduciary transactions 40. Assets under management 41. Related parties 42. Subsequent events 43 Disposed entities 44. Group entities 039

42 1. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS The preparation of financial statements in accordance with International Financial Reporting Standards requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Company s accounting policies. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below. The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. (a) Business combinations and purchase price allocations The acquiree s identifiable assets, liabilities and contingent liabilities are recognised and measured at their fair values at the acquisition date. Allocation of the total purchase price among the net assets acquired for financial statement reporting purposes is performed with the support of professional advisors. The valuation analysis is based on historical and prospective information available as of the date of the business combination. Any prospective information that may impact the fair value of the acquired assets is based on management s expectations of the competitive and economic environments that will prevail in the future. The results of the valuation analyses are used as well for determining the amortisation and depreciation periods of the values allocated to specific intangible and tangible fixed assets. Fair value adjustments resulting from business combinations in 2008 are presented in the following table: In thousands of SKK Subsidiaries Intangible assets Land and buildings Other property, plant and equipment Other Deferred tax asset / (liability) Total net balance sheet effect Bayshore Merchant Services Inc. 996, ,247 EGEM s.r.o. 126,931 (26,655) 100,276 Plzeňská energetika, a.s. 613,950 (19,640) 228,647 (588,666) (44,515) 189,776 Total subsidiaries 1,737,128 (19,640) 228,647 (588,666) (71,110) 1,286,299 In thousands of SKK Joint ventures and associates Intangible assets Land and buildings Other property, plant and equipment Other Deferred tax asset / (liability) Total net balance sheet effect Pražská energetika a.s. 100% 3,730,038 (708,682) 3,021,356 Group s share acquired 7.1% 264,833 (50,317) 214,516 První Mostecká a.s. 100% (18,733) (126,939) 26,069 (119,603) Group s share acquired 47.1% (8,816) (59,737) 12,268 (56,285) MIKRO-K, s.r.o. 100% 159,402 (30,286) 129,116 Group s share acquired 47.5% 75,716 (14,253) 61,463 Joint ventures and associates 340,549 (8,816) (59,737) (52,302) 219,694 Total business combinations 2,077,677 (28,456) 168,910 (588,666) (123,472) 1,505,993 During 2008 the Group acquired an additional 50% share in Plzeňská energetika, a.s. and an additional 7.1% share in Pražská energetika a.s., which resulted in interests of 100% and 41.1%, respectively after acquisition. 040

43 (b) Goodwill and impairment testing The Group conducts impairment testing of goodwill arisen in a business combination during the current period and impairment testing of goodwill already recognised in prior years annually at the year end. The Group also conducts impairment testing of other intangible assets with indefinite useful lives and of business units where a trigger for impairment testing is identified. As at the acquisition date, goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination s synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit (CGU), to which the goodwill relates, on the basis of a value in use that reflects estimated future discounted cash flows or on the basis of fair value less costs to sell. In the majority of cases the Group estimated the recoverable amounts of goodwill and the cash generating units based on value in use. Value in use was derived from management forecasts of future cash flows updated since the date of acquisition. The discount rates used in estimating value in use ranged from 5.18% to 20.1%. In 2008 goodwill arose principally from the acquisitions of EGE-montáže, spol. s r.o., EGE-ENERGOVOD, s.r.o. and Energetické opravny a.s., see Note 3 - Acquisitions and disposals of subsidiaries, special purpose entities, joint ventures and associates. Set out below is a description of the impairment testing carried out on the largest CGUs. J&T Media Group and J&T Bank ZAO In 2008 the Group conducted impairment testing of goodwill arising from the 2007 acquisitions of J&T Media Group (CGU s carrying amount of SKK 3,772,112 thousand including goodwill of SKK 1,001,858 thousand at 31 December 2008) and J&T Bank ZAO (CGU s carrying amount of SKK 633,767 thousand including goodwill of SKK 160,500 thousand at 31 December 2008). The recoverable amount for J&T Media Group exceeded its carrying amount by SKK 2,742,945 thousand. The recoverable amount for J&T Bank ZAO exceeded the CGU s net asset value by SKK 83,057 thousand, without goodwill of SKK 160,500 thousand. The recoverable amount of J&T Media Group and J&T Bank ZAO was determined on the basis of value in use. Value in use was derived from the business plan prepared by management. The key assumption used, and which was also the most sensitive factor in determination of the recoverable amount, was expected revenues, as assessed by management considering the Slovak television and Russian banking markets, respectively. Were revenues to differ by 10% down from management estimates, the value in use would decrease by SKK 3,045,811 thousand and SKK 157,533 thousand for each of J&T Media Group and J&T Bank ZAO, respectively, and this would indicate an impairment loss of SKK 302,866 thousand and SKK 234,976 thousand respectively on the carrying amounts of the CGU, including goodwill at 31 December Management s approach to determining the values assigned to each key assumption reflects past experience in the television and banking markets and these are consistent with external sources of information. The cash flow projections used for the value in use determination cover a five-year period. The growth rate used to extrapolate cash flow projections beyond this period was 2.0% and 3.5% for each of J&T Media Group and J&T Bank ZAO respectively, which is considered to be reasonable within the markets and countries the companies operate in. The discount rates applied to the cash flow projections were calculated as the weighted average costs of capital of each company. Bayshore Merchant Services Inc. As part of the acquisition of Bayshore Merchant Services Inc. in April 2008, the Group acquired customer relationships in the amount of SKK 938,254 thousand, an intangible asset with an indefinite useful life. This was subject to impairment testing. The recoverable amount of this intangible asset as at 31 December 2008 was determined on the basis of value in use, derived from the business plan updated since the date of acquisition. The key assumptions used, and which were also the most sensitive factors in the determination of the recoverable amount, were planned revenues and the cost of capital used as discount factor for future net cash flows. Revenues have been forecast based on nominal GDP, inflation, redemption rate and volatility in financial and foreign exchange markets, which directly affect the expected appreciation of assets under management and the corresponding fees charged to investors. As a result, an impairment loss of SKK 255,486 thousand on the carrying amount of customer relationships was identified and recognised. Were revenues to differ by 10% down from management estimates, the value in use would 041

44 decrease by SKK 394,439 thousand and this would indicate an additional impairment loss of the same amount on the carrying amount of the intangible asset disclosed as at 31 December (c) Valuation of investment property Investment property as part of the Disposal group held for sale at 31 December 2008 is carried at fair value. Fair values of investment property are determined either by independent registered valuers or by management of the real estate segment (refer to accounting policy n), in both cases based on current market values and conditions. Market values are the estimated amount for which a property could be exchanged on valuation date between a willing buyer and a willing seller in an arm s length transaction after appropriate marketing, wherein the parties each act knowledgeably, prudently and without compulsion. In the absence of current prices in an active market, the valuations are prepared considering the estimated net cash flows expected to be received from renting out the property and a capitalisation yield that reflects the specific risks inherent in the market and in those cash flows. Valuations reflect, where appropriate, the type of tenants in occupation or responsible for meeting lease commitments, or likely to be in occupation after letting vacant property, the general market s perception of tenants creditworthiness, the allocation of maintenance and insurance responsibilities between the Group and lessees, and the remaining economic life of the properties. Were fair values to differ by 10% from management estimates, the carrying amount of investment property included in Disposal group held for sale would be an estimated SKK 12,782 thousand higher or lower than disclosed as at 31 December 2008 (2007: SKK 1,031,782 thousand). (d) Financial instruments Financial instruments carried at fair value are measured based on quoted market prices at the balance sheet date. These comprise most of the portfolio of financial assets at Fair value through profit or loss. If the market for a financial instrument is not active, fair value is estimated by using valuation techniques. In applying valuation techniques, management uses estimates and assumptions that are consistent with available information about estimates and assumptions that market participants would use in setting a price for the financial instrument. Were fair values to differ by 10% from management estimates, the net carrying amount of financial instruments would be an estimated SKK 792,588 thousand higher or lower than disclosed as at 31 December 2008 (2007: SKK 812,716 thousand) 042

45 043

46 2. SEGMENT INFORMATION Information about business segments Consolidated income statement for the year ended 31 December 2008 In thousands of SKK Credit & Loans Financial Markets Banking & Financial Services Private Banking Intrasegment Interest and similar income 3,082,270 40,365 60,619 (95,674) external 2,079,153 10,903 53,266 inter-segment 1,003,117 29,462 7,353 (95,674) Interest expense and similar charges (1,937,334) (609,665) (12,102) 95,674 Net interest income (expense) 1,144,936 (569,300) 48,517 Fee and commission income 171,145 77, ,017 (18,958) external 147,180 77, ,972 inter-segment 23, ,045 (18,958) Fee and commission expense (132,413) (542,436) (354,233) 18,958 Net fee and commission income (expense) 38,732 (465,391) 360,784 Dealing profits (losses), net (1,413,979) (2,389,955) (92,174) 3,569 Negative goodwill ,712 Other operating income 1,481, ,611 23,435 (1,740) external 1,444, ,611 21,866 inter-segment 37,381 1,569 (1,740) Other operating expenses (370,638) (13,945) (161,814) 1,910 Personnel expenses (357,401) (152,309) Depreciation and amortisation (60,190) (15,116) Goodwill impairment Other non-cash expenses (198,443) (263,418) Income (loss) from joint ventures and associates 68 Segment result before tax - total 264,878 (3,143,980) (236,383) 3,739 discontinued operations 299 (5,869) (724) continuing operations 264,878 (3,144,279) (230,514) 4,463 Inter-segment prices are determined on the basis of market rates for similar services and financing. 044

47 Total Banking & FS Flats & Offices Industrial Parks Real Estate Hotels & Tourism Infrastructure Intrasegment Total Real Estate Corporate Centre 3,087,580 5,181 2,803 11,505 4,374 23,863 1,407,203 2,143,322 2,486 3, , , ,258 2,695 2,803 8,090 4,371 17, ,360 (2,463,427) (543,968) (16,250) (267,172) (17,795) (845,185) (1,391,372) 624,153 (538,787) (13,447) (255,667) (13,421) (821,322) 15, ,249 26,900 11,009 37, , ,197 26,900 11,009 37, , ,052 65,631 (1,010,124) (16,492) (126) (13,193) (18,481) (48,292) (799,866) (65,875) 10,408 (126) (2,184) (18,481) (10,383) (201,458) (3,892,539) (50) (50) 539,760 15,820 1,385 1,385 28,548 1,797, , ,367 1,385, ,864 (38,024) 2,433,389 7,511,690 1,760, , ,367 1,384,677 94,288 2,414,558 7,416,872 37,210 42,975 1,304 12,576 (38,024) 18,831 94,818 (544,487) (526,935) (136,644) (530,665) (110,616) 38,024 (1,266,836) (662,593) (509,710) (3,953) (3,054) (281,917) (148,388) (437,312) 55,355 (75,306) (15,899) (959) (171,267) (4,582) (192,707) (9,647) (461,861) (1,061) (36,830) (54,921) 26,835 (65,977) (2,473,183) ,094 1,560 (17,065) 191,589 (3,111,746) (126,597) 47,867 72,295 (161,789) (168,224) 4,804,303 (6,294) (90,897) 42,464 72,295 (161,789) (137,927) 3,615,278 (3,105,452) (35,700) 5,403 (30,297) 1,189,

48 Information about business segments Consolidated income statement for the year ended 31 December 2008 (continued) In thousands of SKK Energy Corporate Investment Industry Intra -segment Total Corporate Investment Interest and similar income 346,231 49, ,780 external 44,641 15,153 59,794 inter-segment 301,590 34, ,986 Interest expense and similar charges (795,010) (292,823) (1,087,833) Net interest income (expense) (448,779) (243,274) (692,053) Fee and commission income 142, ,233 external 142, ,233 inter-segment Fee and commission expense (36,031) (65,864) (101,895) Net fee and commission income (expense) 106,115 (65,777) 40,338 Dealing profits (losses), net 245, , ,478 Negative goodwill 181,069 40, ,176 Other operating income 19,184,824 12,468,525 (85,207) 31,568,142 external 19,087,466 12,468,027 31,555,493 inter-segment 97, (85,207) 12,649 Other operating expenses (14,374,912) (9,564,051) 85,207 (23,853,756) Personnel expenses (1,012,320) (2,187,865) (3,200,185) Depreciation and amortisation (734,709) (419,763) (1,154,472) Goodwill impairment Other non-cash expenses (1,344,234) 222,310 (1,121,924) Income (loss) from joint ventures and associates 1,628,271 (1,518,105) 110,166 Segment result before tax - total 3,431,048 (955,138) 2,475,910 discontinued operations 3,743,527 (543,960) 3,199,567 continuing operations (312,479) (411,178) (723,657) Inter-segment prices are determined on the basis of market rates for similar services and financing. 046

49 Airplanes Sport Services Health Services Media Intrasegment Total Services Total segments Inter-segment eliminations J&T Finance Group 4,621 1,005 1, ,733 4,922,159 2, ,204 2,980,067 2,980,067 1, ,529 1,942,092 (1,942,092) (106,310) (61,014) (54,455) (235,705) (457,484) (6,245,301) 1,942,092 (4,303,209) (101,689) (60,009) (52,949) (235,104) (449,751) (1,323,142) (1,323,142) 15 1,746 1,761 1,724, ,746 1,761 1,157,877 1,157, ,683 (566,683) (11,008) (467) (1,964) (14,283) (27,722) (1,987,899) 566,683 (1,421,216) (11,008) (467) (1,949) (12,537) (25,961) (263,339) (263,339) (764) (21,419) (22,183) (2,816,534) (69,743) (2,886,277) , , , ,315 2,089,131 1,272,230 (14) 4,449,168 47,760, , ,277 2,086,283 1,272,130 4,396,226 47,543,930 47,543,930 49, , (14) 52, ,450 (216,450) (548,810) (343,974) (1,247,667) (1,029,510) 14 (3,169,947) (29,497,619) 290,950 (29,206,669) (169,782) (42,770) (715,283) (292,558) (1,220,393) (5,312,245) 934 (5,311,311) (54,282) (103,187) (87,643) (176,373) (421,485) (1,853,617) (1,853,617) (3,233) (11,411) (17,435) 1,079 (31,000) (4,153,945) 357,168 (3,796,777) 5,018 5, , ,841 (68,298) (295,184) (28,777) (494,192) (886,451) 3,113, ,859 3,476,651 (68,298) (295,184) (71,348) (5,785) (14) (440,629) 6,229, ,383 6,958,378 42,571 (488,407) 14 (445,822) (3,116,203) (365,524) (3,481,727) 047

50 Information about business segments Consolidated balance sheet as at 31 December 2008 In thousands of SKK Credit & Loans Financial Markets Banking & Financial Services Private Banking Intrasegment Fixed assets 625, ,516 goodwill 166,137 42,800 other intangibles 96, ,017 tangibles 363,061 14,699 investment property Trade receivables, other assets 1,058,328 1,715, ,922 (99,068) Financial assets 1,149,156 6,304, ,791 (40,977) financial instruments available for sale 420 2,420 financial instruments at fair value through profit or loss 1,148,736 6,304, ,511 (40,977) financial instruments held to maturity 30,860 Loans and advances to customers 33,029,184 1,373, ,898 (1,243,048) Receivables from sale of discontinued operations 22,756 Cash and cash equivalents 9,036,515 22,150 1,676,749 (350,011) Disposal group held for sale Total 44,921,218 9,416,218 3,669,876 (1,733,104) Investments in joint ventures, associates 82 Total segment assets 44,921,300 9,416,218 3,669,876 (1,733,104) Deposits and loans from banks 2,556,302 3,743,047 1 (1,570,679) Deposits and loans from customers 36,563,188 4,936,376 1,736,143 (26,004) Financial instruments 519,174 8,145 45,311 (40,977) Trade and other liabilities 455, , ,442 (99,183) Subordinated debt 745,595 1,458,091 Liabilities associated with disposal group held for sale Total segment liabilities 40,839,503 10,537,907 2,106,897 (1,736,843) Capital expenditure 74,725 5,438 Inter-segment prices are determined on the basis of market rates for similar services and financing. 048

51 Total Banking & FS Flats & Offices Industrial Parks Real Estate Hotels & Tourism Infrastructure Intrasegment Total Real Estate Corporate Centre 1,526,795 10, , ,098 3, ,760 7,528 3,183,157 2,331,443 7,581,749 1,011,085 2, ,589 7,548, ,496 30,860 33,574,348 20,286,838 22,756 5,214,829 10,385,403 1,444, , , ,993 56,274, , ,380 31,117, ,274, , ,380 31,117,176 4,728,671 1,257,789 43,209,703 24,587, ,653 88,204 1,073,751 3,641,456 2,203,686 1,506,866 15,522 15,522 51,747,464 15,522 15,522 31,081,334 80,163 2,786, , ,164 20,194 3,587,749 17,

52 Information about business segments Consolidated balance sheet as at 31 December 2008 (continued) In thousands of SKK Energy Corporate Investment Industry Intra -segment Total Corporate Investment Fixed assets 318 1,283 1,601 goodwill 318 1,283 1,601 other intangibles tangibles investment property Trade receivables, other assets 52 26,845 26,897 Financial assets financial instruments available for sale financial instruments at fair value through profit or loss financial instruments held to maturity Loans and advances to customers 105, ,205 Receivables from sale of discontinued operations 587, ,000 Cash and cash equivalents 5 2,409 2,414 Disposal group held for sale 23,808,753 2,798,621 (644) 26,606,730 Total 24,396,128 2,934,363 (644) 27,329,847 Investments in joint ventures, associates 1,919 1,919 Total segment assets 24,396,128 2,936,282 (644) 27,331,766 Corporate items (deferred tax asset) Total assets Deposits and loans from banks 261, ,689 Deposits and loans from customers , ,467 Financial instruments Trade and other liabilities 366 4,119 4,485 Subordinated debt Liabilities associated with disposal group held for sale 13,608,858 1,771,051 (644) 15,379,265 Total segment liabilities 13,871,864 1,875,686 (644) 15,746,906 Corporate items (income taxes deferred, corporate) Total Capital expenditure 2,782, ,087 3,462,747 Inter-segment prices are determined on the basis of market rates for similar services and financing. 050

53 Airplanes Sport Services Health Services Media Intrasegment Total Services Total segments Inter-segment eliminations J&T Finance Group 4,220,104 4,220,104 5,759,109 5,759,109 1,001,858 1,001,858 1,212,396 1,212,396 2,913,938 2,913,938 3,857,117 3,857, , , , , , ,911 6,267,408 (519,592) 5,747, ,592,897 (64,251) 8,528, , ,492 7,670,545 (64,251) 7,606,294 30,860 30,860 53,966,391 (8,085,095) 45,881,296 5,824,585 5,824,585 46,872 46,872 11,879,068 (1,341,299) 10,537,769 27,552,103 (5,702,185) 21,849,918 4,992,950 4,992, ,841,561 (15,712,422) 104,129,139 2,001 2,001 4,992,950 4,992, ,843,562 (15,712,422) 104,131,140 26,773 26, ,157,913 2,056,227 2,056,227 8,304,376 (468,173) 7,836, , ,988 68,202,177 (10,868,817) 57,333,360 16,303 16, ,160 (64,251) 571, , ,427 5,299,119 (506,122) 4,792,997 1,399,265 1,399,265 5,109,817 (2,308,001) 2,801,816 15,394,787 (1,859,917) 13,534,870 4,355,210 4,355, ,946,436 (16,075,281) 86,871, , ,080 87,509, ,750 51,060 45, , ,185 7,799,420 7,799,

54 Information about geographical segments for the year ended 31 December 2008 In thousands of SKK Slovakia Czech Republic Interest and similar income 1,277,234 2,358,403 Fee and commission income 181, ,965 Dealing profits, net 881,776 (1,182,746) Negative goodwill 249,916 Other operating income 12,797,125 25,353,652 Total income 15,137,494 27,074,190 discontinued operations 11,094,415 25,125,186 continuing operations 4,043,079 1,949,004 Fixed assets 4,138, ,931 goodwill 1,003, other intangibles 2,923,719 86,441 tangibles 212, ,328 investment property Trade receivables, other assets 5,576,813 18,954,781 Financial assets 983, ,153 financial instruments available for sale 940, financial instruments at fair value through profit or loss 43, ,521 financial instruments held to maturity Loans and advances to customers 20,566,254 23,101,141 Receivables from sale of discontinued operations 279,949 32,248 Cash and cash equivalents 4,307,773 4,572,704 Disposal group held for sale 255,063 20,751,830 Total segment assets 36,108,444 68,696,788 Corporate assets (deferred tax asset, investments in associates) Total assets Capital expenditure 3,302,848 4,135,718 For details of the disposal group held for sale, refer to Note 26 Disposal group held for sale. 052

55 Russian Federation Other Total segments Inter-segment eliminations J&T Finance Group 154,050 1,686,976 5,476,663 (2,496,596) 2,980,067 24, ,626 1,293,627 (135,750) 1,157,877 (44,073) (2,908,833) (3,253,876) 367,599 (2,886,277) 17, , , ,251 9,804,526 48,848,554 (1,304,624) 47,543,930 1,027,905 9,392,391 52,631,980 (3,569,371) 49,062, ,438 4,352,521 41,442,560 (1,477,467) 39,965, ,467 5,039,870 11,189,420 (2,091,904) 9,097, , ,176 5,759,109 5,759, ,855 44,237 1,212,396 1,212,396 2, ,010 3,857,117 3,857,117 18,203 13, , ,596 6,067 4,935,527 29,473,188 (23,725,372) 5,747, ,244 7,936,519 10,069,511 (1,540,865) 8,528,646 1,136,836 2,077,532 (1,186,040) 891, ,244 6,768,823 7,961,119 (354,825) 7,606,294 30,860 30,860 30, ,879 24,104,936 68,098,210 (22,216,914) 45,881,296 5,512,388 5,824,585 5,824, ,919 2,893,199 12,145,595 (1,607,826) 10,537, ,025 21,849,918 21,849,918 1,287,114 47,127, ,220,116 (49,090,977) 104,129,139 28, ,157,913 80, ,723 7,799,420 7,799,

56 Information about business segments Consolidated income statement for the year ended 31 December 2007 In thousands of SKK Credit & Loans Financial Markets Banking & Financial Services Private Banking Intrasegment Interest and similar income 1,961,737 56,224 58,814 (62,568) external 1,329,878 6,319 49,417 inter-segment 631,859 49,905 9,397 (62,568) Interest expense and similar charges (1,052,033) (224,804) (11,606) 62,568 Net interest income (expense) 909,704 (168,580) 47,208 Fee and commission income 199, , ,877 (16,754) external 144, , ,309 inter-segment 54,668 3,910 (27,432) (16,754) Fee and commission expense (165,975) (626,501) (43,817) 16,754 Net fee and commission income (expense) 33,146 (443,934) 230,060 Dealing profits (losses), net 145,773 1,414,513 73,779 (141) Negative goodwill Other operating income 26, ,611 (2,175) external 12, ,041 inter-segment 13,498 33,570 (2,175) Other operating expenses (609,926) (86,159) (193,121) 3,286 Personnel expenses (276,027) (38,286) (156,089) Depreciation and amortisation (40,506) (12,328) Goodwill impairment Other non-cash expenses 26,560 Income (loss) from joint ventures and associates (43) Segment result before tax 215, ,828 83, Inter-segment prices are determined on the basis of market rates for similar services and financing. 054

57 Total Banking & FS Flats & Offices Industrial Parks Real Estate Hotels & Tourism Infrastructure Intrasegment Total Real Estate Corporate Centre 2,014,207 7,200 3,888 (12,314) 6,137 (12) 4, ,042 1,385,614 1, , , , ,593 6,055 3,849 (14,795) 6,125 (12) 1, ,439 (1,225,875) (440,417) (19,087) (216,735) (5,155) 12 (681,382) (981,496) 788,332 (433,217) (15,199) (229,049) 982 (676,483) (196,454) 638,811 (31) 19, ,430 41, , ,419 19, ,867 (112,835) 14,392 (31) 71 20,430 20, ,899 (819,539) (188,195) (16,665) (33,963) (1,430) (240,253) (470,969) (180,728) (188,226) 3,287 (32,977) 19,000 (198,916) (325,905) 1,633, , ,793 15,829 16, , , , , ,020 (25,693) 2,477, ,210 73, , , , ,931 2,323, ,839 44,893 43,985 10, ,089 (25,693) 154, ,371 (885,920) (219,407) (156,369) (462,673) (360,246) 25,725 (1,172,970) (638,599) (470,402) (1,688) (3,722) (241,680) (132,949) (380,039) (606,285) (52,834) (16,387) (664) (161,552) (6,538) (185,141) (14,643) (90,714) (90,714) 26,560 (8,185) 28,863 (2,887) (5,969) 11,822 (138,071) (43) 357,990 (100) (117,557) 240,333 (1,019) 977, , ,963 (412,778) 5, ,387 (1,095,435) 055

58 Information about business segments Consolidated income statement for the year ended 31 December 2007 (continued) In thousands of SKK Energy Corporate Investment Industry Intra -segment Total Corporate Investment Interest and similar income 154,737 60, ,618 external 35,459 14,787 50,246 inter-segment 119,278 46, ,372 Interest expense and similar charges (451,737) (194,092) (645,829) Net interest income (expense) (297,000) (133,211) (430,211) Fee and commission income 3,229 41,442 44,671 external 3,627 6,261 9,888 inter-segment (398) 35,181 34,783 Fee and commission expense (149,686) (210,736) (360,422) Net fee and commission income (expense) (146,457) (169,294) (315,751) Dealing profits (losses), net 120,359 19, ,835 Negative goodwill 3,404 3,404 Other operating income 17,102,018 12,764,768 (55,212) 29,811,574 external 17,037,393 12,759,182 29,796,575 inter-segment 64,625 5,586 (55,212) 14,999 Other operating expenses (14,434,443) (8,693,108) 217,824 (22,909,727) Personnel expenses (1,176,115) (2,297,455) (3,473,570) Depreciation and amortisation (521,298) (461,132) (982,430) Goodwill impairment Other non-cash expenses (53,810) 106,423 52,613 Income (loss) from joint ventures and associates 1,131, ,451 1,506,210 Segment result before tax 1,725,013 1,514, ,612 3,401,947 Loss from unallocated items (income tax expense) Total consolidated profit for the period Inter-segment prices are determined on the basis of market rates for similar services and financing. 056

59 Airplanes Sport Services Health Services Media Intrasegment Total Services Total segments Inter-segment eliminations J&T Finance Group 8, , ,099 3,031,865 7, ,336 1,953,476 1,953,476 1,106 (74) 2,743 (12) 3,763 1,078,389 (1,078,389) (84,008) (59,601) (36,458) (86,701) (266,768) (3,801,350) 1,097,285 (2,704,065) (75,491) (59,263) (33,265) (86,650) (254,669) (769,485) 18,896 (750,589) 8,541 (17) 73 (3,669) 4, ,811 8, ,162 9, , ,206 (90) (17) (1) (4,831) (4,939) 322,605 (322,605) (35,492) (709) (15,093) (16,906) (68,200) (1,959,383) 326,065 (1,633,318) (26,951) (726) (15,020) (20,575) (63,272) (1,084,572) 3,460 (1,081,112) 1,864, ,432 2,032,741 10,478 10,478 46,196 46, , ,519 2,001, ,554 (683) 3,796,344 36,923, , ,269 1,993, ,010 3,731,901 36,523,097 36,523,097 56, , (683) 64, ,133 (400,133) (549,411) (519,786) (1,498,840) (325,468) 668 (2,892,837) (28,500,053) 449,878 (28,050,175) (99,911) (50,865) (645,731) (103,929) 15 (900,421) (5,830,717) 6,644 (5,824,073) (44,037) (147,778) (76,391) (54,388) (322,594) (1,557,642) (1,557,642) (325,006) (325,006) (415,720) (415,720) (4,279) (6,549) (112,960) (88,448) (212,236) (259,312) (139,484) (398,796) 712 2,204 2,916 1,748,397 1,748,397 (110,019) (203,448) (367,920) (479,910) (1,161,297) 2,164, ,693 2,272,324 (671,199) 1,601,

60 Information about business segments Consolidated balance sheet as at 31 December 2007 In thousands of SKK Credit & Loans Financial Markets Banking & Financial Services Private Banking Intrasegment Fixed assets 680, ,831 goodwill 178,059 24,815 other intangibles 91,028 76,980 tangibles 411,701 9,036 investment property Trade receivables, other assets 929,471 1,278, ,315 (303,562) Financial assets 817,605 6,166, ,442 (191) financial instruments available for sale 216 2,745 financial instruments at fair value through profit or loss 817,389 6,166, ,591 (191) financial instruments held to maturity 31,106 Loans and advances to customers 32,671, , ,601 (987,475) Cash and cash equivalents 8,274, , ,635 (551,516) Disposal group held for sale Total 43,372,960 7,904,512 2,310,824 (1,842,744) Investments in joint ventures, associates Total segment assets 43,372,960 7,904,512 2,310,824 (1,842,744) Deposits and loans from banks 2,490,795 4,458, ,993 (1,335,594) Deposits and loans from customers 34,787, , ,627 (204,411) Financial instruments 137,183 29,559 5,896 (191) Trade and other liabilities 847, , ,021 (303,518) Subordinated debt 820,766 Liabilities associated with disposal group held for sale Total segment liabilities 39,083,732 5,663,886 1,519,537 (1,843,714) Capital expenditure 102,836 3,838 Inter-segment prices are determined on the basis of market rates for similar services and financing. 058

61 Total Banking & FS Flats & Offices Industrial Parks Real Estate Hotels & Tourism Infrastructure Intrasegment Total Real Estate Corporate Centre 791,619 10,705, ,998 5,581,407 27,271 16,497,661 16, , , , , , , ,497 6, ,737 4,659,110 41,608 4,291,823 26,885 9,019,426 10,706 5,608, ,328 80,168 5,829,787 (52) 2,128, , , , ,826 (188,688) 1,525,294 1,245,661 7,413,679 23,868 53,829 57, ,483 1,249,292 2,961 23,868 53,829 57, ,483 1,163,581 7,379,612 85,711 31,106 32,751,778 3,538 7,598 11,136 17,347,770 8,660, ,054 25, ,655 29,876 1,367,579 1,990,957 1,858,372 46,915 1,360,676 3,265,963 51,745,552 13,579, ,948 8,259, ,357 (188,688) 22,803,116 21,850, , ,784 1,348,788 4,942 51,745,552 14,419, ,948 8,768, ,357 (188,688) 24,151,904 21,855,474 6,029,306 7,959, ,524 1,828, ,211 10,281, ,131 36,350, ,865 3,372,074 5,730 4,128,669 16,427, , ,180 1,049,933 1,135,077 59, , ,616 (188,720) 1,642,838 6,219, ,766 1,681,741 1,676, ,084,419 2,761,610 44,423,441 11,522, ,339 6,745, ,557 (188,720) 18,815,016 25,025, ,674 2,527, , ,551 13,018 3,378,565 22,

62 Information about business segments Consolidated balance sheet as at 31 December 2007 (continued) In thousands of SKK Energy Corporate Investment Industry Intra -segment Total Corporate Investment Fixed assets 5,945,556 3,716,043 (16,641) 9,644,958 goodwill 283, , ,646 other intangibles 9, , ,736 tangibles 5,605,459 2,679,932 (16,641) 8,268,750 investment property 47,740 13,086 60,826 Trade receivables, other assets 2,355,404 5,522,741 (39,302) 7,838,843 Financial assets 177, , ,779 financial instruments available for sale 50,031 50,031 financial instruments at fair value through profit or loss 177, , ,748 financial instruments held to maturity Loans and advances to customers 5,885, ,359 6,568,199 Cash and cash equivalents 1,147, ,996 2,126,980 Disposal group held for sale 25, , ,088 Total 15,538,038 11,523,752 (55,943) 27,005,847 Investments in joint ventures, associates 10,038,967 2,587,067 12,626,034 Total segment assets 25,577,005 14,110,819 (55,943) 39,631,881 Corporate items (deferred tax asset) Total assets Deposits and loans from banks 10,318,514 3,461,417 13,779,931 Deposits and loans from customers 4,107,812 2,107,516 6,215,328 Financial instruments 53, , ,052 Trade and other liabilities 2,237,603 5,498,539 (218,555) 7,517,587 Subordinated debt Liabilities associated with disposal group held for sale ,313 95,190 Total segment liabilities 16,718,543 11,492,100 (218,555) 27,992,088 Corporate items (income taxes deferred, corporate) Total Capital expenditure 348, , ,

63 Airplanes Sport Services Health Services Media Intrasegment Total Services Total segments Inter-segment eliminations J&T Finance Group 1,052,109 1,272, ,326 4,186,108 7,438,309 34,389, ,088 34,564, ,002 1,001,858 1,225,916 3,008,389 3,008,389 1, , ,103 2,975,646 3,805,201 5,363,638 5,363, , , , ,604 2,191,515 19,911,134 (8,855) 19,902, ,562 34, ,677 6,106, ,943 6,290, , , , ,327 1,397,372 14,135,237 (581,310) 13,553,927 32, ,038 9,349,271 (367,463) 8,981,808 21, ,293 1,373,349 (243,107) 1,130,242 7,933,071 (124,356) 7,808,715 11,745 11,745 42,851 42,851 3,239 3,356 6,595 56,685,478 (31,425,335) 25,260,143 50,045 8, ,786 12, ,229 14,363,154 (2,488,062) 11,875,092 3,575,051 3,575,051 1,481,512 1,418,339 1,450,536 4,742,156 9,092, ,497,590 (34,687,082) 97,810,508 81,211 81,211 14,060,975 14,060,975 1,481,512 1,418,339 1,531,747 4,742,156 9,173, ,558,565 (34,687,082) 111,871, , ,101, , , ,909 2,084,695 4,134,995 34,624,262 (13,282,406) 21,341, , ,744 11,011 1,236,037 2,679,339 65,802,216 (20,908,980) 44,893,236 37,258 37, ,937 (79,428) 812, , , , ,620 1,498,952 17,929,251 (523,961) 17,405,290 2,502,507 2,502,507 2,856,800 2,856,800 1,710,334 1,598,800 1,384,058 3,657,352 8,350, ,606,973 (34,794,775) 89,812,198 3,709,499 93,521, , , ,997 53, ,888 4,988,928 4,988,

64 Information about geographical segments for the year ended 31 December 2007 In thousands of SKK Slovakia Czech Republic Interest and similar income 664,869 1,518,838 Fee and commission income 158, ,945 Dealing profits, net 38, ,801 Negative goodwill 17,136 28,968 Other operating income 11,041,459 24,097,576 Total income 11,920,992 26,476,128 Fixed assets 15,589,994 12,704,572 goodwill 1,259, ,608 other intangibles 3,326,231 1,161,198 tangibles 4,956,542 10,339,378 investment property 6,047, ,388 Trade receivables, other assets 5,605,951 9,465,376 Financial assets 1,979,063 1,133,142 financial instruments available for sale 1,677,035 84,100 financial instruments at fair value through profit or loss 302, ,324 financial instruments held to maturity 149,718 Loans and advances to customers 10,872,883 27,649,924 Cash and cash equivalents 1,342,324 8,897,417 Disposal group held for sale 3,526,746 48,305 Total segment assets 38,916,961 59,898,736 Corporate assets (deferred tax asset, investments in associates) Total assets Capital expenditure 3,398,871 1,226,894 For details of the disposal group held for sale, refer to Note 26 Disposal group held for sale. 062

65 Russian Federation Other Total segments Inter-segment eliminations J&T Finance Group 57,722 1,134,599 3,376,028 (1,422,552) 1,953,476 6,629 1,182,603 1,789,108 (1,236,902) 552, ,614,263 2,042,928 (10,187) 2,032, ,196 46, ,604 1,417,214 36,801,853 (278,756) 36,523, ,222 5,348,771 44,056,113 (2,948,397) 41,107,716 5,047,081 1,222,840 34,564,487 34,564, , ,586 3,008,389 3,008, , ,448 5,363,638 5,363,638 3,895, ,806 19,902,279 19,902,279 6,290,181 6,290, ,462 3,439,559 18,715,348 (5,161,421) 13,553, ,426 8,458,389 11,711,020 (2,729,212) 8,981,808 1,813,748 3,574,883 (2,444,641) 1,130, ,426 6,613,535 7,955,313 (146,598) 7,808,715 31, ,824 (137,973) 42, ,202 23,274,221 62,212,230 (36,952,087) 25,260,143 1,188,673 2,739,743 14,168,157 (2,293,065) 11,875,092 3,575,051 3,575,051 6,995,844 39,134, ,946,293 (47,135,785) 97,810,508 14,290, ,101,157 43, ,027 4,988,928 4,988,

66 3. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES, SPECIAL PURPOSE ENTITIES, JOINT VENTURES AND ASSOCIATES Acquisitions In thousands of SKK New subsidiaries and fully consolidated SPEs Date of acquisition Cost Cash outflow Group s interest after acquisition % Bayshore Merchant Services Inc ,078,598 1,044, EGE-ENERGOVOD, s.r.o , , EGE-montáže, spol. s r.o , , Energetické opravny, a.s , , HEBILAB s.r.o ,787 67, Hotel SASANKA s.r.o , PROFI-ELRO s.r.o ,288 61, Plzeňská energetika a.s , , STEMWILL, a.s , TP 2, s.r.o , , Others various 33,920 26,912 Total 2,770,434 2,643,284 New SPEs consolidated as joint ventures and associates MIKRO - K, s.r.o , PRVNÍ MOSTECKÁ a.s Total 163,141 1 Acquired with subsidiaries. 2 The Group acquired a 20.59% share in PRVNÍ MOSTECKÁ a.s. for consideration of SKK 79,569 thousand in This investment was presented as available for sale in In 2008 the Group obtained significant influence after obtaining representation on the Board of Directors. In thousands of SKK Additional participations in existing associates, subsidiaries and special purpose entities Date of purchase Cost Cash outflow Interest acquired % Group s interest after acquisition % AC Sparta Praha fotbal, a.s , Equity Holding, a.s. various 2,321 2, Pražská energetika, a.s ,500, První brněnská strojírna Brno DIZ,a.s., ,099 2, PRVNÍ MOSTECKÁ a.s. various 62,084 62, RM-S HOLDING, a.s. various SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. (SES a.s.) , , SOR Libchavy spol. s r.o. various 16,141 16, Tatranské lanové dráhy, a.s , VULKAN akciová společnost various 16, Total 1,980, ,766 The increase in the investment in AC Sparta Praha fotbal, a.s. was through a contribution in kind. The consideration for the additional interest in Pražská energetika, a.s. was settled through a share exchange. The additional shareholdings in Equity Holding, a.s., PRVNÍ MOSTECKÁ a.s., RM-S HOLDING, a.s., SOR Libchavy spol. s r.o. and VULKAN akciová společnost were acquired from minority shareholders in successive steps during the year. The increase in participation in existing subsidiaries and special purpose entities during 2008 led to negative goodwill of SKK 68,739 thousand and additional goodwill of SKK 116,578 thousand (2007: negative goodwill of SKK 36,959 thousand and additional goodwill of SKK 26,500 thousand). 064

67 Establishment of subsidiaries and SPEs Date of establishment Group s interest after establishment % 1. SVIDNÍCKA, s.r.o SVIDNÍCKA MEDICÍNSKA, s.r.o INTEGRIS BANK AND TRUST (TURKS & CAICOS ISLANDS) LTD J&T BFL Anstalt J&T Hotels Management, LLC J&T REAL ESTATE PL SES CHILE LTDA United Energy Coal Trading Effect of acquisitions The acquisitions of new subsidiaries and special purpose entities had the following effect on the Group s assets and liabilities: In thousands of SKK Bayshore Merchant Services Inc. 1 Plzeňská energetika a.s. STEM- WILL, a.s. Property, plant and equipment 9,200 1,006, ,403 1,440,340 Intangible assets 1,027, , ,152 1,919,729 Investment in joint ventures (533,089) (5,059) (538,148) Deferred tax assets 56,885 1,146 58,031 Inventories 32, , ,831 Trade receivables and other assets 49, , ,692 1,399,392 2,083,208 Loans and advances to customers 58,067 4,243 62,310 Financial assets at fair value through profit or loss 16,237 38,811 55,048 Financial assets held to maturity 201, ,689 Securities available for sale 328, ,381 Cash and cash equivalents 824,895 54,917 2, ,005 1,178,261 Provisions (48,170) (48,170) Deferred tax liabilities (30) (87,627) (63,677) (151,334) Deposits and loans from banks (432,241) (1,337,326) (1,769,567) Deposits and loans from customers (750,948) (429,710) (1,000) (1,181,658) Trade payables and other liabilities (18,495) (774,585) (60) (351,753) (1,144,893) Minority interest (121,538) (42) (2,923) (124,503) Net identifiable assets and liabilities 1,093, , ,828 2,506,555 Goodwill on acquisition of new subsidiaries 1, , ,967 Negative goodwill on acquisition of new subsidiaries (15,247) (179,018) (3,823) (198,088) Cost of acquisition 1,078, ,071 2,714 1,335,051 2,770,434 Consideration paid, satisfied in cash (1,044,920) (354,071) (1,244,293) (2,643,284) Cash acquired 824,895 54,917 2, ,005 1,178,261 Net cash (outflow) inflow (220,025) (299,154) 2,444 (948,288) (1,465,023) Profit (loss) since acquisition date 6,728 34,213 2, , ,211 Pro forma profit (loss) for whole year , ,060 2, , ,322 Revenues for whole year , ,912 3,131,226 4,193,718 1 Consolidated group acquired Other 2008 Total Negative goodwill on acquisition of new subsidiaries 198,088 Foreign exchange differences 185 Negative goodwill from additional participation in existing subsidiaries and SPEs 68,739 Total negative goodwill 267,012 Bayshore Merchant Services Inc. located in St. Michael, Barbados is a group offering a range of services primarily focusing on the provision of trust, corporate, wealth management and legal counsel services. 065

68 Plzeňská energetika a.s. is a company in Plzen, Czech Republic whose activities are electricity and heat energy generation, heat energy distribution as well as the production and distribution of compressed air, water and steam. STEMWILL, a.s. is a company in Prague, Czech Republic trading with receivables. The majority of profit since acquisition date included in Other relates to FORAX PROPERTY LIMITED and was generated by the sale of the subsidiary TP2, s.r.o. (SKK 636,566 thousand), a company in the Slovak Republic near the eastern border distributing gas, heat and electricity. Goodwill included in Other relates principally to the acquisition of EGE-montáže, spol. s r.o., EGE-ENERGOVOD, s.r.o. and Energetické opravny a.s. Management believes that there is long-term strategic value in these investments due to the expected developments in their markets, and this resulted in initial goodwill paid as part of the acquisition cost. Property, plant and equipment included in Other relates principally to TP2, s.r.o. and Hotel SASANKA s.r.o. An amount of SKK 954,477 thousand in Trade receivables and other assets and an amount of SKK 1,279,883 thousand in Deposits and loans from banks, both in Other, relate to FEBOSEM LIMITED and POPELANTE DEVELOPMENT LIMITED. In thousands of SKK Disposals of joint ventures and associates Discountinued operations Date of sale Sales price Cash inflow Gain/(loss) on disposal Henbury Development, s.r.o ,901 (6,048) Interhouse Košice, a.s ,690 Interhouse Tatry s.r.o ,367 JASNÁ Nízke Tatry, a.s ,282 (46,509) Popper Capital, s.r.o ,246 55,822 Real Estate Administration, a.s (48,691) TESAKO s.r.o ,864 1,447 Other ,706 Other disposals 1,261,971 71, garantovaná a.s ,223,504 Other 27 (1,617) 27 1,221,887 Total 1,261,998 1,293,671 Companies with negative equity were disposed from the Group for SKK

69 Effect of disposals The disposals of subsidiaries and special purpose entities had the following effect on the Group s assets and liabilities: In thousands of SKK Included in discontinued operations Corporate Investments Real Estate Services Other disposals Property, plant and equipment 3,840,951 9,891,229 2,331, ,115 16,356,576 Intangible assets 1,613,424 1,568, ,651 95,955 4,233,844 Investment property 12,485 7,084, ,248 7,839 7,222,959 Participations with significant influence 383, ,291 85,070 1,259,999 2,095,083 Inventories 1,045, ,714 85,377 3,912 1,392,409 Trade receivables and other assets 6,920,470 1,394,598 1,220, ,880 10,407,002 Loans and advances to customers 1,596, ,905 94,734 2,212,630 4,101,867 Financial assets at fair value through profit or loss, available for sale and held to maturity 203,850 84,409 4, , ,818 Cash and cash equivalents 1,040,397 1,097, , ,754 2,435,972 Disposal group held for sale 55,947 3,976, ,188 4,302,466 Deposits and loans from banks (5,023,319) (12,042,378) (2,104,601) (1,992,929) (21,163,227) Deposits and loans from customers (1,879,058) (1,006,681) (2,388,915) (1,468,025) (6,742,679) Subordinated payables (3,193,904) (3,193,904) Trade payables, provisions and other liabilities (8,253,689) (3,418,945) (1,155,083) (742,272) (13,569,989) Deferred tax liabilities (297,767) (1,480,699) (211,089) (420) (1,989,975) Liabilities associated with disposal group held for sale (3,394,890) (321,165) (3,716,055) Minority interest (214,929) (837,771) (20,464) (24,579) (1,097,743) Net assets and liabilities 1,044, ,374 (875,060) 985,621 1,699,424 Sales price 2,189,253 2,813,919 88,240 1,692,292 6,783,704 Gain/(loss) on disposal 1,144,764 2,269, , ,671 5,084,280 Consideration received, satisfied in cash ,506 26, , ,416 Cash disposed of (1,040,397) (1,097,964) (109,857) (187,754) (2,435,972) Net cash inflows/(outflows) (1,040,168) (1,031,458) (82,943) (24,987) (2,179,556) 2008 Total The companies disposed during 2008 with the largest amounts of assets are as follows: In the Corporate Investments segment: SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. (total assets of SKK 6,590,941 thousand), Plzeňská energetika a.s. (SKK 2,205,887 thousand), VSS, a.s., Košice (SKK 847,773 thousand). In the Real Estate segment: Baltschug, LLC (SKK 3,776,052 thousand), Bratislavské nábrežie, s.r.o. (SKK 3,515,408 thousand), Pribinova 25, s.r.o. (SKK 2,891,883 thousand). In the Services segment: AC Sparta Praha fotbal, a.s. (SKK 1,275,693 thousand), ABS Sprinter Limited (SKK 643,584 thousand), ABS Jets, a.s. (SKK 538,016 thousand). Under other disposals: RM-S HOLDING, a.s. (SKK 1,979,328 thousand), FEBOSEM LIMITED (SKK 936,199 thousand). 067

70 4. DISCONTINUED OPERATIONS In thousands of SKK Results of discontinued operations Interest and similar income 70,168 61,420 Interest expense and similar charges (1,028,347) (713,480) Net interest expense (958,179) (652,060) Fee and commission income 23,340 18,652 Fee commission expense (104,485) (193,004) Dealing profits (losses), net 547, ,165 Negative goodwill 204,039 29,676 Other operating income 34,670,871 32,986,496 Personnel expenses (4,602,861) (3,467,087) Depreciation and amortisation (1,594,904) (1,416,465) Goodwill impairment (90,714) Impairment of property, plant and equipment and intangible assets (52,172) (18,619) Other operating expenses (27,446,337) (24,257,754) Net income from associates and joint ventures 1,822,391 1,348,840 Profit before tax 2,508,985 4,412,126 Gain on sale of discontinued operations entities 4,449,393 Income tax expense (376,609) (483,101) Profit for the period from discontinued operations 6,581,769 3,929,025 Profit before tax from discontinued operations includes profit of the companies presented as disposal group held for sale as at 31 December 2008 in an amount of SKK 2,719,689 thousand refer also to Note 26 Disposal group held for sale. In thousands of SKK Cash flows from (used in) discontinued operations Net cash flows from (used in) operating activities 1,950,745 1,143,576 Net cash flows from (used in) investing activities (6,734,810) (5,416,129) Net cash flows from (used in) financing activities (121,288) (72,165) Net cash flows from (used in) discontinued operations (4,905,353) (4,344,718) 068

71 5. NET INTEREST EXPENSE In thousands of SKK Interest and similar income Interest and similar income arise from: Loans and advances to banks and customers 2,434,831 1,502,702 Repo transactions 215, ,794 Bonds and other fixed income securities 29,236 1,594 Bills of exchange 15,389 51,646 Receivables from central banks 196, ,988 Financial assets held for trading 35,280 28,387 Other 53,324 84,365 Total 2,980,067 1,953,476 Less discontinued operations (70,168) (61,420) Total for continuing operations 2,909,899 1,892,056 Interest expense and similar charges Interest expense and similar charges arise from: Deposits and loans from banks and customers (3,527,523) (2,314,965) Repo transactions (306,125) (136,096) Bills of exchange (114,397) (87,112) Other (355,164) (165,892) Total (4,303,209) (2,704,065) Less discontinued operations 1,028, ,480 Total for continuing operations (3,274,862) (1,990,585) Net interest expense (1,323,142) (750,589) Less net interest expense of discontinued operations 958, ,060 Net interest expense of continuing operations (364,963) (98,529) 6. FEE AND COMMISSION EXPENSE In thousands of SKK Intermediation fees (639,265) (1,002,815) Other fees and commission expenses (781,951) (630,503) Total (1,421,216) (1,633,318) Less discontinued operations 104, ,004 Total for continuing operations (1,316,731) (1,440,314) Intermediation fees represent expenses relating to new and on-going projects of the Group, and are allocated across the different segments in Note 2 Segment information. 069

72 7. DEALING PROFITS (LOSSES), NET In thousands of SKK Realised and unrealised gains (losses) on financial instruments at fair value through profit or loss, net (3,334,151) 1,906,747 Realised gains on foreign exchange trading, net 11,403 Realised and unrealised gains from receivables held for trading 139,282 80,432 Dividend income 308,592 34,159 Total (2,886,277) 2,032,741 Less discontinued operations (547,282) (124,165) Total for continuing operations (3,433,559) 1,908,576 The majority of losses on financial instruments in 2008 arises from the Group s investments in Unipetrol, a.s., a loss of SKK 1,719,912 thousand (2007: losses of SKK 365,065 thousand), in ČEZ, a.s. amounting to SKK 172,793 thousand (2007: gains of SKK 139,489 thousand) and in ZENTIVA N.V. amounting to SKK 620,300 thousand (2007: gains of SKK 452,511 thousand). As at 31 December 2008 the Group has no investment in Unified Energy System of Russia (2007: gain of SKK 1,084,461 thousand). 8. GOODWILL IMPAIRMENT AND NEGATIVE GOODWILL In thousands of SKK Negative goodwill Plzeňská energetika a.s. 178,735 RM-S HOLDING, a.s. 28,112 SOR Libchavy spol. s r.o. 22,887 VULKAN akciová společnost 17,220 Bayshore Merchant Services Inc. 15,712 GRANDHOTEL PRAHA a.s. 15,776 Geodezie Brno, a.s. 10,782 LABOREX, s.r.o. 8,098 Equity Holding, a.s ,605 Other 3,910 6,935 Total 267,012 46,196 Less discontinued operations (204,039) (29,676) Total for continuing operations 62,973 16,520 In thousands of SKK Goodwill impairment GRANDHOTEL PRAHA a.s. 90,714 J&T Media Group 325,006 Total 415,720 Less discontinued operations (90,714) Total for continuing operations 325,

73 9. OTHER OPERATING INCOME In thousands of SKK Revenue from manufacturing, distribution of electricity and construction contract sales 24,556,360 23,719,315 Profit on disposal of subsidiaries, special purpose entities, joint ventures and associates and on disposal of minority share in subsidiaries and special purpose entities 6,377,951 3,527,109 Revenue from sales of heat and energy 3,470,226 1,536,474 Movement in provisions, net 2,393, ,068 Foreign exchange gains, net 2,386,586 Emission rights 1,333,444 13,966 Revenue from laboratories and hospitals 1,274,094 1,047,027 Income from advertising 1,230, ,303 Revenue from accommodation services 1,061, ,042 Airplane transportation 646, ,881 Revenue from health insurance company 638, ,662 Revenue from services 625, ,883 Consulting fees 298, ,624 Income from sports club 232, ,646 Other rental income 188, ,855 Rental income from investment property 154, ,227 Change in fair value of investment property, net 131, ,865 Waste management 35,774 36,137 Other income from investment property 35,583 50,331 Research and development services 17,726 36,628 Gain on disposal of property, plant and equipment, investment property and intangible assets, net 556,469 Other income 455, ,423 Total 47,543,930 36,505,935 Less discontinued operations (39,120,264) (32,986,496) Total for continuing operations 8,423,666 3,519,439 An analysis of Other operating income by segment is provided in Note 2 Segment information. The income from discontinued operations of SKK 39,120,264 thousand includes SKK 4,449,393 thousand of gain on the sale of discontinued operations (see Note 4). Emission rights are considered to be unamortised intangible assets. In 2008 they were distributed among the companies concerned by the governments of the European Union and were valued at fair values using prices publicly established in the Leipzig European Energy Exchange. Part of the income from emission rights in 2008, for an amount corresponding to the expenses presented in Note 11 Other operating expenses, reflects the utilisation of government grants during the current accounting period. The excess of income from emission rights over the amount of consumed emission rights in 2008 presented in Note 11 Other operating expenses represents a gain from selling granted emission rights on the market. 10. PERSONNEL EXPENSES In thousands of SKK Wages and salaries 3,890,036 3,100,141 Board members and key management remuneration 24,559 1,599,188 Compulsory social security contributions 1,241, ,752 Other social expenses 155, ,830 Total 5,311,311 5,806,911 Less discontinued operations (4,602,861) (3,467,087) Total for continuing operations 708,450 2,339,824 The average number of employees during 2008 was 9,821 (2007: 8,869), out of which executives represent 357 (2007: 296). 071

74 11. OTHER OPERATING EXPENSES In thousands of SKK Energy 11,835,664 11,975,323 Materials 8,552,654 6,571,165 Construction delivery and installation services 1,975,761 2,225,430 Consumption of emission rights 1,104,227 47,325 Outsourcing, legal and other administration fees 713, ,763 Rent expenses 552, ,485 Expenses incurred by health insurance company 530, ,419 Repairs and maintenance expenses 423, ,616 Change in impairment of receivables and inventories 383, ,413 Consulting expenses 380, ,865 Transport and accommodation, travel expenses 346, ,647 Television program expenses 333, ,817 Advertising expenses 322, ,341 Sports club expenses 275, ,769 Sponsoring and gifts 168, ,760 Contractual penalties 161,983 64,542 Loss on disposal of property, plant and equipment, investment property and intangible assets, net 158,613 Transmission capacity services 128, ,944 Property and other taxes 126, ,689 News production expenses 99,805 27,499 Communication expenses 76,293 79,812 Training, courses and conferences 53,734 30,395 Receivables written-off, net 52,549 38,193 Other operating costs related to investment property 11,801 15,277 Foreign exchange losses, net 893,289 Other operating expenses 1,605,697 1,908,517 Total 30,374,137 28,068,295 Less discontinued operations (27,446,337) (24,257,754) Total for continuing operations 2,927,800 3,810,541 Consumption of emission rights represents the expense related to the income from emission rights the amount utilised and disposed during the current accounting period refer to Note 9 Other operating income. An analysis of Other operating expenses by segment is provided in Note 2 Segment information. 12. INCOME TAX In thousands of SKK Current tax expense: Current year (834,616) (564,992) Adjustments for prior periods (3,425) Withheld on interest (16,833) (2,028) (854,874) (567,020) Deferred tax income (expense): Origination and reversal of temporary differences 364,014 (289,726) Change in tax rate (984) 185,547 Total income tax expense (491,844) (671,199) Less discontinued operations 376, ,101 Total income tax expense from continuing operations (115,235) (188,098) 072

75 Deferred income taxes are calculated using currently enacted tax rates expected to apply when the asset is realized or the liability settled. In November 2007 the Czech government enacted legislation under which the corporate income tax rate was reduced from 24% to 21%, 20% and 19% for the fiscal years ending in 2008, 2009 and 2010 onwards, respectively. Reconciliation of the effective tax rate In thousands of SKK % % % % Profit before tax 3,476,651 2,272,324 Income tax at 19% (2007: 19%) , ,742 Effect of tax rates in foreign jurisdictions (30.3) (1,053,646) ,490 Non-deductible expenses ,005, ,172,961 Non-taxable income (36.7) (1,275,342) (210.7) (4,786,580) Tax incentives 0.0 (77) (0.1) (1,874) Tax withheld on interest , ,028 Recognition of previously unrecognized tax losses (5.8) (200,644) (1.9) (42,084) Current year losses for which no deferred tax asset was recognized , ,099 Change in temporary differences for which no deferred tax asset was recorded (5.7) (198,265) (1.0) (22,788) Under (over) provided in prior years tax charges (0.1) (3,425) (0.2) (4,248) Effect of changes in tax rate (0.2) (8,191) (8.2) (185,547) Total , ,199 Less discontinued operations (376,609) (483,101) Total tax from continuing operations 115, ,098 See also Note 17 Deferred tax assets and liabilities. 073

76 13. PROPERTY, PLANT AND EQUIPMENT In thousands of SKK Cost Land and buildings Fixtures fittings and equipment Under construction Balance at 1 January ,519,361 5,558,508 2,256,908 15,334,777 Effects of movements in foreign exchange (16,492) (4,267) (84,275) (105,034) Additions 730, ,024 1,743,966 3,068,710 Acquisitions through business combinations 3,850, ,134 1,324,480 5,779,230 Disposals (246,579) (341,903) (566,146) (1,154,628) Transfers 37,411 1,038,505 (1,075,916) Transfers to/from investment property 17,338 12,063 29,401 Transfer to disposal group held for sale (1,305,213) (123,211) (1,328) (1,429,752) Balance at 31 December ,587,162 7,325,790 3,609,752 21,522,704 Balance at 1 January ,587,162 7,325,790 3,609,752 21,522,704 Effects of movements in foreign exchange (607,040) (604,597) (213,519) (1,425,156) Additions 658,133 1,269,865 2,451,776 4,379,774 Acquisitions through business combinations 398, , ,077 1,440,340 Disposals (9,156,709) (3,800,356) (5,181,310) (18,138,375) Transfers 330, ,679 (792,376) Transfers to/from investment property (109,117) (1,063) (110,180) Fair value change on transfer to investment property 53,082 53,082 Transfer to disposal group held for sale (1,780,085) (4,736,593) (202,369) (6,719,047) Balance at 31 December , ,147 1,968 1,003,142 Depreciation and impairment losses Balance at 1 January 2007 (753,686) (86,255) (37,891) (877,832) Effects of movements in foreign exchange (5,289) (1,826) 1,932 (5,183) Depreciation charge for the year (273,175) (909,644) (1,182,819) Disposals 76, ,256 13, ,831 Impairment (3,484) 17,961 23,120 37,597 Transfers (778) 31,928 (31,150) Transfers to disposal group held for sale 38,075 36,906 74,981 Balance at 31 December 2007 (921,731) (668,674) (30,020) (1,620,425) Balance at 1 January 2008 (921,731) (668,674) (30,020) (1,620,425) Effects of movements in foreign exchange 54, , ,589 Depreciation charge for the year (330,259) (1,053,253) (1,383,512) Disposals 799, ,639 28, ,368 Impairment (59) 589 1,081 1,611 Transfers (108) 108 Transfers to/from investment property 17,981 17,981 Transfers to disposal group held for sale 316,557 1,147,285 1,463,842 Balance at 31 December 2008 (63,099) (250,447) (313,546) Carrying amount At 1 January ,765,675 5,472,253 2,219,017 14,456,945 At 31 December ,665,431 6,657,116 3,579,732 19,902,279 At 1 January ,665,431 6,657,116 3,579,732 19,902,279 At 31 December , ,700 1, ,596 Idle assets At 31 December 2008 the Group had idle assets with a carrying amount of SKK 18,428 thousand (2007: no idle assets) Total Leased land, buildings and equipment At 31 December 2007 the Group leased an aircraft under a finance lease agreement. The net carrying value of the airplane was SKK 383,933 thousand at this date. The airplane was sold during the year 2008 in the process of the Group s reorganisation. The leased assets are pledged as security over the lease obligations. 074

77 Finance lease liabilities Finance lease liabilities are payable as follows as at 31 December 2008: In thousands of SKK Payments Interest Principal Less than one year 10,954 1,745 9,209 Between one and five years 41,989 6,690 35,299 More than five years Total 52,943 8,435 44,508 Security At 31 December 2008 property, plant and equipment with a carrying value of SKK 507,870 thousand, which relates entirely to the disposal group held for sale, is subject to pledges to secure bank loans (2007: SKK 1,425,142 thousand). 14. INTANGIBLE ASSETS In thousands of SKK Cost Goodwill TV format and brands Other intangible assets Balance at 1 January , ,990 1,555,606 3,152,214 Effect of movements in foreign exchange 8,627 2,059 2,092 12,778 Additions 368, ,535 Acquisitions through business combinations 2,827,392 2,671,341 1,369,145 6,867,878 Disposals (264,942) (222,892) (487,834) Transfers to disposal group held for sale (9,711) (9,711) Balance at 31 December ,537,695 3,303,390 3,062,775 9,903,860 Balance at 1 January ,537,695 3,303,390 3,062,775 9,903,860 Effect of movements in foreign exchange (155,261) (13,564) (143,321) (312,146) Additions 2,074,780 2,074,780 Acquisitions through business combinations 578,545 1,919,729 2,498,274 Disposals (2,164,323) (566,853) (4,944,082) (7,675,258) Transfers to disposal group held for sale (276,188) (58,973) (215,968) (551,129) Balance at 31 December ,520,468 2,664,000 1,753,913 5,938,381 Amortisation and impairment losses Balance at 1 January 2007 (369,934) (45,516) (586,988) (1,002,438) Effect of movements in foreign exchange (781) (255) (2,866) (3,902) Amortisation charge for the year (786) (374,037) (374,823) Disposals 257, , ,874 Impairment (415,720) (271) (100,753) (516,744) Transfers to disposal group held for sale 7,200 7,200 Balance at 31 December 2007 (529,306) (46,828) (955,699) (1,531,833) Balance at 1 January 2008 (529,306) (46,828) (955,699) (1,531,833) Effect of movements in foreign exchange 6,606 2,070 42,092 50,768 Amortisation charge for the year (964) (469,141) (470,105) Disposals 114,874 45, ,367 1,128,940 Impairment (259,237) (259,237) Transfers to disposal group held for sale 82, , ,599 Balance at 31 December 2008 (325,677) (543,191) (868,868) Carrying amount At 1 January , , ,618 2,149,776 At 31 December ,008,389 3,256,562 2,107,076 8,372,027 At 1 January ,008,389 3,256,562 2,107,076 8,372,027 At 31 December ,194,791 2,664,000 1,210,722 5,069,513 Total Acquisitions of other intangible assets through business combinations in 2008 mainly comprise the customer relationships acquired with Bayshore Merchant Services Inc. and the emission rights acquired with control in Plzeňská energetika a.s. 075

78 15. INVESTMENT PROPERTY In thousands of SKK Cost Balance at 1 January 6,290,181 6,157,697 Effects of movements in foreign exchange (9,772) (1,456) Additions 1,165,353 1,551,683 Acquisitions through business combinations 9,891 Disposals (1,606) (150,430) Changes in fair value (121,590) 678,865 Transfers to/from property, plant and equipment 92,199 (29,401) Transfers to/from disposal group held for sale (191,806) (1,926,668) Decreases due to disposal of companies (7,222,959) Balance at 31 December 6,290,181 Security At 31 December 2008 no investment property presented in the Disposal group held for sale was subject to pledges to secure bank loans (2007: SKK 6,334,076 thousand). 16. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES The Group has the following investments in associates and special purpose entities consolidated as joint ventures and associates: Group s interest Carrying amount Country % % In TSKK In TSKK Joint ventures (SPEs) EXONERATE TRADING LIMITED Cyprus Henbury Development, s.r.o. Slovakia HPL spol. s r.o. Slovakia ,211 Plzeňská energetika a.s. Czech Republic ,952 Popper Capital, s.r.o. Slovakia ,193 Real Estate Administration, a.s. Czech Republic ,783 VULKAN Intim Brands a.s. Czech Republic ,919 1,128 ABS PLANE Limited Ireland BIANKO, s.r.o. Czech Republic DCA Park, s.r.o. Slovakia Deštné Baude, s.r.o. Czech Republic ,942 ENDETA, a.s. Czech Republic Interhouse Košice, a.s. Slovakia ,471 Interhouse Tatry s.r.o. Slovakia ,530 Karloveské rameno II, s.r.o. Slovakia ,989 MERIDIANSPA s.r.o. Czech Republic ,479 RETISE ENTERPRISES LIMITED Cyprus VSV consulting s.r.o. Slovakia ,188 2,001 1,685,

79 Group s interest Carrying amount In thousands of SKK Country % % Associates and SPEs ABS Bravo, Ltd Ireland Energoprojekty, a.s. Slovakia ,213 Filiálka, s.r.o Slovakia Pražská energetika, a.s. Czech Republic ,670,016 TESAKO s.r.o. Slovakia , garantovaná a.s. Slovakia ,584,725 12,375,308 Total 2,001 14,060,975 The Group s income (expense) from the above associates and joint ventures is as follows: In thousands of SKK Total net income from associates and joint ventures 306,841 1,748,397 Less income from discontinued operations (1,822,391) (1,348,840) Net income (expense) from associates and joint ventures from continuing operations (1,515,550) 399,557 The Group s income from associates and joint ventures from discontinued operation for the year ended 31 December 2008 was SKK 1,822,391 thousand, which consists of negative goodwill in respect of Pražská energetika, a.s. of SKK 817,643 thousand resulting from the acquisition of an additional 7.1% share, net post-acquisition recognized income for this same entity of SKK 724,896 thousand and further net post-acquisition recognized income from other associates and joint ventures, mainly Henbury Development, s.r.o., Popper Capital, s.r.o. and Plzeňská energetika a.s., of SKK 307,372 thousand, (2007: SKK 1,348,840 thousand, which consisted mainly of post-acquisition net recognized income from Pražská energetika, a.s. and Popper Capital s.r.o. of SKK 1,415,710 thousand). The Group s income from associates and joint ventures from continuing operations for the year ended 31 December 2008 was a loss of SKK 1,515,550 thousand, which consists mainly of a loss from 1. garantovaná a.s. of SKK 1,518,167 thousand (2007: profit of SKK 399,557 thousand, which consisted of negative goodwill in respect of 1. garantovaná a.s. of SKK 524,391 thousand and its post-acquisition recognized loss of SKK 124,834 thousand) Summary financial information for Pražská energetika, a.s., a significant associate disclosed within disposal group held for sale and discontinued operations, presented at 100%, as at 31 December 2008: In thousands of SKK Revenue Profit/(Loss) Assets Liabilities Equity Pražská energetika, a.s. 23,923,000 2,006,000 35,043,000 9,994,000 25,049, December 2007 Pražská energetika, a.s. 20,358,056 3,080,782 36,267,072 7,890,277 28,376, garantovaná a.s. 1,171,715 (360,062) 9,287,879 5,772,144 3,515,735 Popper Capital, s.r.o. 1,506, ,252 2,831,578 1,392,509 1,439,069 Plzeňská energetika a.s. 1,210, ,587 1,416, , ,865 BIANKO s.r.o. 149,939 (256) 983, ,719 (246) TESAKO s.r.o. (17,783) 742, , ,773 The revenue and profit of 1. garantovaná a.s. were presented for a two-month period in 2007, which was the period in 2007 since its acquisition by the Group, and not for a whole year. 077

80 17. DEFERRED TAX ASSETS AND LIABILITIES Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: In thousands of SKK Property, plant and equipment 15,163 Impairment of trade receivables and other assets 92 Fair value adjustments Tax losses carried forward 1,539,956 2,324,349 Total 1,540,593 2,339,870 Tax losses expire over a period of five years for both Slovakia and the Czech Republic (or seven years for losses arisen before 1 January 2004 in the Czech Republic). Some deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because, due to the varying nature of the sources of these assets, it is not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom. The following deferred tax assets and (liabilities) have been recognised: In thousands of SKK Temporary difference related to: Property, plant and equipment (25,254) (2,227,670) Property, plant and equipment 51,349 Intangible assets (565,534) (861,998) Intangible assets 210 4,801 Impairment of trade receivables and other assets ,267 Impairment of trade receivables and other assets (1,301) Creation or closing balance of other provisions 1,984 51,350 Release of other provisions (3,965) Unpaid interest, net (74) (663) Fair value adjustment for investment properties (363,635) Fair value adjustment for investment properties 15,115 Embedded derivatives (6,816) Tax losses 14,938 7,952 Other deferred tax assets 9,430 85,840 Other deferred tax liabilities (30) (61,519) Total (564,119) (3,297,893) A deferred tax asset is recognized for the carryforward of unused tax losses only to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized. An estimation of the expiry of tax losses is as follows: After 2012 Tax losses 22,511 24,998 34,369 35,630 1,501,071 Many parts of Slovak, Czech and Russian tax legislation remain untested and there is uncertainty about the interpretation that the financial authorities may apply in a number of areas. The effect of this uncertainty cannot be quantified and will only be resolved as legislative precedents are set or when the official interpretations of the authorities are available. 078

81 18. INVENTORIES In thousands of SKK Finished goods and merchandise 361, ,125 Raw materials and consumables 1,702 1,065,525 Work in progress 486,592 Construction contracts 70,793 Advance payments made for inventory 44,171 Impairment provision to inventories (94,424) (152,889) Total 268,781 2,139,317 At 31 December 2008 inventories with a carrying value of SKK 510,526 thousand, including inventories presented in the disposal group held for sale, are subject to pledges (2007: SKK 446,705 thousand). The consolidated inventory balance includes TV JOJ s restricted program license rights in amount of SKK 356,247 thousand, of which use is permitted from 2009 onwards. A provision of SKK 94,424 thousand was recorded for those licence rights not usable due to the short residual licence period. 19. TRADE RECEIVABLES AND OTHER ASSETS In thousands of SKK Other receivables 2,897,427 1,256,363 Advance payments received 1,840,546 2,046,665 Trade receivables 731,478 6,688,250 Prepayments and accrued income 96, ,216 Other tax receivables 68, ,325 Securities settlement balances 28,986 36,339 Purchased receivables 598,979 Allowance for bad debts (185,074) (655,527) Total 5,479,035 11,414,610 Current 4,698,823 11,166,519 Non-current 780, ,091 Total 5,479,035 11,414,610 Construction contracts In thousands of SKK Contract revenues recognised as revenue in the period 9,172,298 4,456,272 Construction costs incurred and recognised profits less recognised losses to date 10,433,576 6,730,144 Advances received 1,720,139 Gross amounts due from customers for contract work 1,372,195 The construction contracts income and costs are part of discontinued operations. At 31 December 2008 trade receivables include no retentions relating to construction contracts as all companies with such contracts are discontinued operations (2007: SKK 429,676 thousand). 079

82 20. LOANS AND ADVANCES TO CUSTOMERS In thousands of SKK Loans and advances to customers 48,836,968 26,032,155 Less allowance for impairment of loans (2,955,672) (772,012) Total 45,881,296 25,260,143 Current 37,645,858 22,457,204 Non-current 8,235,438 2,802,939 Total 45,881,296 25,260,143 Loans and advances to customers include 302 significant loans and advances, which represent 98% of total loans and advances to customers (2007: 189 representing 97%). In 2008 a loan of SKK 1,687,898 thousand (2007: SKK 1,582,402 thousand) was granted to a single third party. Provisions for loans and advances to customers are determined and recorded based on the financial position and expected cash flows of the debtor, taking into account the value of collateral as well as guarantees from third parties. Standard loans provided to customers as at 31 December 2008 include loans amounting to SKK 20,705,947 thousand (2007: SKK 8,385,015 thousand), the repayment of which is dependent upon realisation of the assets acquired by the customers from these provided loans. The assets are pledged in favour of the Group. Management believes that these receivables will be repaid in full. The amount of non-interest bearing loans as at 31 December 2008 totalled SKK 447,670 thousand (2007: SKK 457,730 thousand). These loans are mostly from the former Podnikateľská banka, the clients of which are now in bankruptcy proceedings. Receivables from these loans are fully provided for. The weighted average interest rate on loans to customers for 2008 was 7.31% (2007: 6.87%). 21. ALLOWANCE FOR IMPAIRMENT OF LOANS In thousands of SKK Balance at 1 January 772, ,225 Write-offs (288,622) (143,491) Increase in the year 2,599, ,249 Differences due to foreign currency translation (127,130) (2,971) Balance at 31 December 2,955, ,

83 22. REPURCHASE AND RESALE AGREEMENTS The Group raises funds by selling financial instruments under agreements to repay the funds by repurchasing the instruments at future dates at the same price, plus interest at a predetermined rate. At 31 December 2008 and 2007, totals assets sold under repurchase agreements were as follows: In thousands of SKK 31 December 2008 Fair value of underlying asset Carrying amount of liability Maturity Repurchase price Loans and advances from customers 1,297,835 1,334,285 up to 1 month 1,337,976 Loans and advances from customers 85, , months 114,301 Loans and advances from customers 95, , months 158,077 Loans and advances from banks 2,136,964 1,986,998 up to 1 month 1,988,272 Loans and advances from banks 507, , months 602,347 Total 4,123,907 4,096,961 4,200, December 2007 Loans and advances from customers 114, , months 118,619 Loans and advances from banks 5,014,441 3,258,764 up to 1 month 3,265,076 Loans and advances from banks 244, , months 219,573 Total 5,373,482 3,584,894 3,603,268 The Group also purchases financial instruments under agreements to resell them at future dates ( reverse repurchase agreements ). Reverse repurchases are entered into as a facility to provide funds to customers. At 31 December 2008 and 2007, totals assets purchased subject to agreements to resell them were as follows: In thousands of SKK 31 December 2008 Carrying amount of receivable Fair value of assets held as collateral Maturity Repurchase price Loans and advances to customers 1,163,672 1,799,803 up to 1 month 1,166,317 Loans and advances to banks 792, ,756 up to 1 month 792,442 Total 1,955,817 2,580,559 1,958, December 2007 Loans and advances to customers 3,088,308 5,203,973 up to 1 month 3,094,951 Loans and advances to banks 1,895,910 1,855,798 up to 1 month 1,896,854 Loans and advances to banks 2,297,637 3,133, months 2,308,242 Total 7,281,855 10,193,195 7,300,047 Loans and advances to banks with an original maturity up to three months are disclosed as cash and cash equivalents. 081

84 23. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS In thousands of SKK Bonds (Listed) 881, ,869 Bonds (Not listed) 87,030 Shares (Listed) 5,970,241 6,207,344 Shares (Not listed) Other financial assets held for trading 311,934 68,779 Forward currency contracts 353, ,748 Forward share contracts 30,109 Option contract for share purchase 10,269 Option contract for currency purchase 57,219 Option contract for commodity purchase 1, ,908 Interest rates swaps (IRS) 68,389 Fair value of derivatives 355, ,642 Total 7,606,294 7,808,715 The majority of financial assets at fair value through profit or loss as at 31 December 2008 comprises shares of Unipetrol, a.s. for SKK 1,781,984 thousand (2007: SKK 3,499,819 thousand) and shares of ZENTIVA N.V. for SKK 3,563,932 thousand (2007: SKK 1,385,990 thousand). The value of these shares was determined based on market prices. The shares of Unipetrol, a.s. and ZENTIVA N.V. in total amount of SKK 5,345,916 thousand have been pledged as security for bank loans as at 31 December Income from debt and other fixed-income instruments is recognised in interest and similar income. In 2008 the weighted average interest rate on bonds was 6.58% (2007: 3.95%). 24. SECURITIES AVAILABLE FOR SALE In thousands of SKK Securities available for sale 891,492 1,130,242 Securities available for sale comprises bills of exchange as at 31 December 2008 and at 31 December In 2007 it also included shares of PRVNÍ MOSTECKÁ a.s. in amount of SKK 79,569 thousand. 25. CASH AND CASH EQUIVALENTS In thousands of SKK Cash on hand 88, ,232 Current accounts with banks 2,856,566 2,952,618 Balances with central banks 4,792, ,101 Government bonds issued accepted by central banks for re-financing 306, ,152 Loans and advances to central banks 803,439 1,895,910 Loans and advances to other banks 1,690,117 5,605,079 Total 10,537,769 11,875,092 Balances with central banks represent the obligatory minimum reserves maintained by J&T BANKA, a.s., J&T Bank (Switzerland) Ltd. (previously IBI Bank AG) and J&T Bank, ZAO (previously Tretij Rim ZAO) under regulations of the relevant regulatory authorities. The obligatory minimum reserve for J&T BANKA, a.s. is calculated as 2% of primary deposits with a maturity of less than two years, for J&T Bank (Switzerland) Ltd. (previously IBI BANK AG ) as 2.5% of primary deposits with a maturity less than three months. These obligatory minimum reserves are interest earning. 082

85 The obligatory minimum reserve for J&T Bank, ZAO (previously Tretij Rim ZAO) is calculated as 0.5% of deposits from private persons and 0.5% of other liabilities. The obligatory minimum reserve is not interest earning in J&T Bank, ZAO (previously Tretij Rim ZAO). Term deposits with original maturity up to three months are classified as cash equivalents. Cash and cash equivalents as at 31 December 2008 includes SKK zero (2007: SKK 100 thousand), which represents money held on behalf of clients. A corresponding entry in liabilities to customers was recorded as at 31 December The weighted average interest rate on loans and advances to banks was 2.43% in 2008 (2007: 4.17%). 26. DISPOSAL GROUP HELD FOR SALE The disposal group consists of companies which are intended to be sold or contributed in-kind as part of the Group s reorganisation plan in The detailed structure of the assets and liabilities of the disposal group as at 31 December 2008 is as follows: In thousands of SKK Pražská energetika, a.s. United energy právní nástupce, a.s. První energetická a.s. SOR Libchavy spol. s r.o. Others Total Segment Energy Energy Energy Industry Various Property, plant and equipment 4,492, , ,694 5,251,120 Intangible assets 23, ,293 98, ,530 Investment property 43,959 83, ,819 Participations with significant influence 10,520, ,729 10,652,758 Deferred tax assets 21,731 8,270 89, ,413 Inventories 65, , , ,350 Trade receivables and other assets 124, , ,445 1,455,012 2,707,960 Positive fair value of derivatives 24, ,697 79, ,842 Cash and cash equivalents 28, ,843 84, ,931 1,110,126 Total assets 10,520,029 4,824,499 2,136,740 1,352,563 3,016,087 21,849,918 Derivatives with negative fair value 30, ,204 12,830 92, ,112 Payables from debenture securities other than at fair value through profit and loss 1,154,652 1,154,652 Other financial liabilities other than at fair value through profit and loss Deposits and loans from banks 674, , ,842 7,938,607 9,319,166 Deposits and loans from customers Deferred tax liability 588, ,504 50, ,808 Provisions 37,842 19,610 6,345 63,797 Trade payables and other liabilities 474, , , ,677 1,970,672 Total liabilities 2,961,535 1,386, ,370 8,488,112 13,534,

86 The net profit structure of the disposal group for the year ended 31 December 2008 is as follows: In thousands of SKK Pražská energetika, a.s. United energy právní nástupce, a.s. První energetická a.s. SOR Libchavy spol. s r.o. Others Total Segment Energy Energy Energy Industry Various Net interest expense (77,093) (7,108) (14,811) (497,020) (596,032) Net fee and commission income (expense) (367) 5,981 (645) (16,495) (11,526) Other operating income 1,888,049 9,794,911 1,914,951 5,227,034 18,824,945 Other operating expenses (2,553,181) (9,870,120) (1,586,754) (2,985,031) (16,995,086) Income from associates and joint ventures 1,491,083 6,305 1,497,388 Profit before tax 1,491,083 (742,592) (76,336) 312,741 1,734,793 2,719,689 Income tax expense (148,657) (16,137) (53,696) (39,401) (257,891) Net profit (loss) for the period 1,491,083 (891,249) (92,473) 259,045 1,695,392 2,461,798 Others comprises companies from the following segments: Energy United energy trading, a.s. Honor Invest, a.s. Czech energy holding a.s. PRVNÍ MOSTECKÁ a.s. Industry Krahulík-MASOZÁVOD Krahulčí, a.s. KMOTR Masna Kroměříž, a.s. Vysočina, a.s. BAULIGA a.s. MASNA HOLDING LIMITED Českomoravský uzenářský holding, a.s. assets owned by VULKAN akciová společnost (stores and minor production buildings) Real estate ZST a.s. 27. SHAREHOLDERS EQUITY Share capital and share premium The authorised, issued and fully paid share capital as at 31 December 2008 and 2007 consisted of 19,000 ordinary shares with a par value of SKK 50 thousand each. The shareholders are entitled to receive dividends and to one vote per share at meetings of the Company s shareholders. The majority shareholder of the Group is Techno plus, a.s. Number of shares Ownership % Voting rights % 31 December 2008 Techno Plus, a.s. 19, Total 19, December 2007 Techno Plus, v.o.s. 10, J&T Finance Group II, a.s. 8, Total 19,

87 Non-distributable reserves Non-distributable reserves consists of a legal reserve of SKK 295,095 thousand (2007: SKK 96,896 thousand). In Slovakia creation of a legal reserve fund is required at a minimum of 10% of net profit (annually) and up to a minimum of 20% of the registered share capital (cumulative balance). The legal reserve fund can only be used to cover losses of the Company and it may not be distributed as dividends. The calculation of the legal reserve is based on local statutory regulations. Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations that are not integral to the operations of the Company. Revaluation reserve The revaluation reserve arises through accounting for business combinations that occur in stages and involve more than one exchange transaction. The reserve reflects that part of the increase in the fair value of the subsidiaries identifiable net assets after initial acquisition of the previously held interest acquired in previous exchange transactions, which is attributable to that initial investment interest. The revaluation reserve also comprises changes in fair value of financial instruments available for sale. 28. MINORITY INTEREST In thousands of SKK EQUITY HOLDING a.s. 435, ,698 Baltschug, LLC 883,560 SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. 519,991 RM-S HOLDING, a.s. 49,762 Other 14, ,350 Total 449,871 2,159, DEPOSITS AND LOANS FROM BANKS In thousands of SKK Current 5,686,289 8,335,079 Non-current 2,149,914 13,006,777 Total 7,836,203 21,341,856 The weighted average interest rate on deposits and loans from banks for 2008 was 5.73% (2007: 4.89%). 30. DEPOSITS AND LOANS FROM CUSTOMERS In thousands of SKK Current 55,525,603 42,960,570 Non-current 1,807,757 1,932,666 Total 57,333,360 44,893,236 The weighted average interest rate on deposits and loans from customers for 2008 was 4.55% (2007: 4.05%). 085

88 31. PROVISIONS In thousands of SKK Partners Remuneration Warranties Other Total Balance at 1 January ,468, , ,872 3,501,573 Additions through business combinations 6,150 69,609 75,759 Provisions recorded during the period 221,864 41, , ,123 Provisions used during the period (260,944) (12,213) (273,157) Provisions reversed during the period (365,421) (120,613) (486,034) Transfer to disposal group (282) (282) Foreign exchange gain/loss (14,174) 217 (6,402) (20,359) Disposal of entities (7,822) (7,822) Balance at 31 December ,675, , ,923 3,284,801 Current 248, , ,894 Non-current 2,675,759 18, ,373 2,814,907 In thousands of SKK Partners Remuneration Warranties Other Total Balance at 1 January ,675, , ,923 3,284,801 Additions through business combinations 1,610 46,560 48,170 Provisions recorded during the period 12, , ,165 Provisions used during the period (13,364) (385,965) (399,329) Provisions reversed during the period (2,491,659) (54,205) (84,514) (2,630,378) Transfer to disposal group (15,855) (47,659) (63,514) Foreign exchange gain/loss (184,100) (1,965) (15,599) (201,664) Disposed entities (192,985) (593,869) (786,854) Balance at 31 December ,116 55,281 58,397 Current 3,116 55,266 58,382 Non-current Provision for partners remuneration The provision for partners remuneration was created for the first time in 2004 in order to cover various remuneration schemes to partners of the Group based on the performance of the investment projects in which the Group is involved. The provision was reversed during the year following the Group s reorganisation, including the changes implemented in the Group s corporate governance. Other provisions Other provisions mainly include provisions for law suits of SKK 26,223 thousand and SKK 13,525 thousand for other current provisions. A provision of SKK 20,653 thousand was recognized for various litigations, mainly in relation to disputed penalties and lawsuits with individuals. 32. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS In thousands of SKK Fair value of derivatives Forward currency contracts 535, ,817 Forward shares contracts ,717 Option contracts for currency purchases 7,319 Option contracts for share purchases 35, ,230 Derivatives for commodity purchase 88 29,426 Total 571, ,

89 33. TRADE PAYABLES AND OTHER LIABILITIEs In thousands of SKK Trade payables 2,847,700 5,802,181 Advance payments received 362,669 2,028,148 Securities settlement balances 80, ,541 Payables to customers from securities trading 130, ,110 Employee benefits 38, ,872 Financial leasing liabilities 44, ,397 Uninvoiced supplies 47, ,915 Liabilities arising from acquisitions of subsidiaries and SPEs 38,914 1,321,153 Other liabilities 674,117 2,038,682 Accruals and other deferred income 468, ,490 Total 4,734,600 14,120,489 Current 4,407,553 13,237,151 Non-current 327, ,338 Total 4,734,600 14,120, SUBORDINATED DEBT In 2007 and 2008 the subordinated debt includes floating rate subordinated notes issued by J&T BANKA, a.s. (initial amount of EUR 25 million) and by J&T FINANCE GROUP, a. s. (initial amount of EUR 50 million), both with maturity in 2022 and fixed rate subordinated notes issued by J&T MEDIA ENTERPRISES, a.s., (initial amount of SKK 516 million) with maturity in Subordinated debt at amortised cost: In thousands of SKK ,801,816 2,502,507 Floating rate subordinated notes are based on 3 month EURIBOR. The weighted average interest rate on the subordinated notes for 2008 was 8.4% (2007: 8.6%). 35. FAIR VALUE INFORMATION The following table is a comparison of the carrying amounts and fair values of the Group s financial assets and liabilities that are not carried at fair value: In thousands of SKK Carrying amount Fair value Financial assets Cash and cash equivalents 11,647,895 11,982,459 11,645,514 11,935,882 Loans and advances to customers 45,881,296 25,260,143 44,970,921 24,621,673 Receivables from sale of discontinued operations 5,824,585 6,060,064 Trade receivables and other assets 8,186,995 11,549,898 8,158,371 11,550,768 Financial instruments held to maturity 30,860 42,851 30,860 42,851 Financial liabilities Deposits and loans from banks 17,155,369 23,768,205 17,371,671 23,625,062 Deposits and loans from customers 58,488,012 44,913,157 58,631,711 43,981,143 Trade payables and other liabilities 6,705,272 14,227,324 6,651,308 14,227,

90 Estimation of fair values The following summarizes the major methods and assumptions used in estimating the fair values of financial instruments reflected in the table. Loans and advances: Fair value is calculated based on discounted expected future principal and interest cash flows. Expected future cash flows are estimated considering credit risk and any indication of impairment. The estimated fair values of loans reflect changes in credit status since the loans were made and changes in interest rates in the case of fixed rate loans. Bank and customer deposits: For demand deposits and deposits with no defined maturities, fair value is taken to be the amount payable on demand at the balance sheet date. The estimated fair value of fixed-maturity deposits is based on discounted cash flows using rates currently offered for deposits of similar remaining maturities. Trade receivables/ payables and other assets/ liabilities: For receivables/ payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. Other receivables/ payables are discounted to determine the fair value. Financial instruments held to maturity: In view of the amounts of held to maturity assets, the carrying value is deemed to reflect the fair value. 36. FINANCIAL COMMITMENTS AND CONTINGENCIES In thousands of SKK Accepted and endorsed bills of exchange 844,619 1,338,870 Guarantees given 29,942,501 30,678,718 Contracted capital commitments 4,898,563 Loan commitments 4,840,821 2,446,911 Total 35,627,941 39,363,062 Guarantees mostly represent the carrying value of pledged assets that are used as collateral for loan financing in a total amount of SKK 15,946,452 thousand including guarantees provided by companies included in the disposal group held for sale (2007: SKK 21,299,316 thousand). Loan commitments relate to loan facilities granted by J&T BANKA, a.s., liabilities from foreign exchange deals and other financial derivatives. In 2004 the Municipal Court in Prague ordered a hearing in respect of a payment order of SKK 525 million payable to DEVIN BANKA. No specific provision was recorded in this respect. On 7 March 2008 the Court decision was rendered and the claim was dismissed. DEVIN BANKA appealed to the Supreme Court in Prague. On 19 March 2008 the Supreme Court dismissed the action against J&T BANKA with a final ruling in this process. 37. OPERATING LEASES Leases as lessee Non-cancellable operating lease rentals are payable as follows: In thousands of SKK Less than one year 22,883 37,850 Between one and five years 51,419 55,835 More than five years 2,241 1,792 Total 76,543 95,477 The Group leases a number of cars and administration space under operating leases. The administration space leases typically run for an initial period of five to fifteen years, with an option to renew after that date. During the year ended 088

91 31 December 2008, SKK 76,960 thousand was recognised as an expense in the income statement in respect of operating leases for continuing operations (2007: SKK 50,960 thousand as restated for continuing operations only). Leases as lessor The Group leases out its property under operating leases (refer to Note 15 Investment property). Non-cancellable operating lease rentals are receivable as follows: In thousands of SKK Less than one year 12,681 66,552 Between one and five years 41, ,545 More than five years 32,198 14,839 Undefined maturity ,126 Total 87, ,062 During the year ended 31 December 2008, SKK 2,268 thousand was recognised as rental income from continuing operations (2007: SKK 23,417 thousand as restated for continuing operation only). 38. RISK MANAGEMENT POLICIES AND DISCLOSURES This section provides detail of the Group s exposure to financial risk and of the way it manages such risk. The most important types of financial risks to which the Group is exposed are credit risk, liquidity risk, market risk and operational risk. Market risk includes interest rate risk, currency risk and equity price risk. The Group uses the Value at Risk ( VaR ) methodology to evaluate market risk on its trading portfolio, the foreign currency ( FX ) and commodity position of the Group as a whole using a confidence level of 99% and a horizon of 10 business days. The Group performs backtesting for market risk associated with its trading portfolio, foreign exchange and commodity positions, by applying a method of hypothetical backtesting, on a quarterly basis. The VaR statistics as of 31 December 2008 are as follows: In thousands of SKK 2008 VaR market risk overall 1,366,482 VaR interest rate risk 10,318 VaR FX risk 1,349,964 VaR stock risk 1,212 VaR commodity risk Credit risk The Group s primary exposure to credit risk arises through its loans and advances. The amount of credit exposure is represented by the carrying amounts of the assets on the balance sheet. In addition, the Group is exposed to offbalance sheet credit risk through commitments to extend credit. Most loans and advances are to banks, companies in the financial sector, and various manufacturing companies. The carrying amount of loans and advances represents the maximum accounting loss that would be recognised at the balance sheet date if counterparties failed to perform completely as contracted and any collateral or security proved to be of no value. The amount therefore greatly exceeds expected losses. The Group s policy is to require suitable collateral to be provided by customers prior to the disbursement of loans. The assessment of credit risk in respect of a counter-party or an issued debt is based on the Group s internal rating system. The rating is determined using the credit scale of either S&P or Moody s. If the counter-parties or their debt are not assessed using the S&P or Moody s scale (or its affiliate CRA RATING AGENCY), the internal rating of the Group is based on its own scoring system. 089

92 The scoring system of the Group has seven degrees. It is based on a standardised point evaluation of relevant criteria, which describe the financial position of a contractual party and its ability to fulfil its credit obligations in both cases including the expected development, quality and adequacy of the collateral, as well as proposed conditions for effecting the transaction. At portfolio level, credit risk in the banking entities of the Group is managed primarily based on the methodology of credit Value-At-Risk. The Group holds collateral against loans and advances to customers mainly in the form of mortgages, securities and acceptances of bills of exchange. Credit risk by sector As at 31 December 2008 In thousands of SKK Assets Corporate State, government Financial institutions Individuals Other Total Cash and cash equivalents 306,970 11,248,782 92,143 11,647,895 Financial assets at fair value through profit or loss 6,978,069 1,457, ,392 8,447,136 Financial instruments held to maturity 15,371 15,489 30,860 Securities available for sale 590,451 3, , ,492 Loans and advances to customers 43,701, ,259 1,230,832 69,246 45,881,296 Receivables from sale of discontinued operations 5,824, ,824,585 Trade receivables and other assets 6,729, , , , ,443 8,186,995 Liabilities 63,839, ,419 13,738,434 1,712,756 1,038,449 80,910,259 Deposits and loans from banks 17,155,369 17,155,369 Deposits and loans from customers 34,153, ,067,378 2,646,579 4,179,223 58,488,012 Financial, trade and other liabilities 6,882, ,758 3,058, , ,032 10,491,960 41,036,108 8,649,812 29,280,822 2,844,344 4,324,255 86,135,341 As at 31 December 2007 In thousands of SKK Assets Corporate State, government Financial institutions Individuals Other Total Cash and cash equivalents 327,152 11,492, ,337 11,982,459 Financial assets at fair value through profit or loss 6,450,809 1,200, ,659 7,808,715 Financial instruments held to maturity 15,495 15,610 11,746 42,851 Securities available for sale 352, , , ,130,242 Loans and advances to customers 20,711, ,783 3,689,856 5,376 25,260,143 Trade receivables and other assets 10,398, , , ,004 21,455 11,549,898 Liabilities 37,928,666 1,113,636 13,886,825 4,655, ,250 57,774,308 Deposits and loans from banks 23,768,205 23,768,205 Deposits and loans from customers 32,480,609 5,867,667 2,533,607 3,108, ,904 44,913,157 Financial, trade and other liabilities 11,897, ,210 4,154,367 1,186,728 67,842 17,795,527 44,377,989 6,356,877 30,456,179 4,295, ,746 86,476,

93 Credit risk by location As at 31 December 2008 In thousands of SKK Slovakia Czech republic Cyprus Liechtenstein Other Total Assets Cash and cash equivalents 4,300,034 5,480,535 2,455 1,864,871 11,647,895 Financial assets at fair value through profit or loss 3,029,673 21,209 5,034 5,391,220 8,447,136 Financial instruments held to maturity 30,860 30,860 Securities available for sale 345, , , ,492 Loans and advances to customers 13,456,769 10,264,497 14,721,811 1,704,560 5,733,659 45,881,296 Receivables from sale of discontinued operations 193,720 76, ,326 4,651,387 5,824,585 Trade receivables and other assets 1,133,995 2,571,609 1,659,250 1,300,922 1,521,219 8,186,995 Liabilities 19,429,799 21,765,865 17,305,606 7,664,358 14,744,631 80,910,259 Deposits and loans from banks 3,183,552 12,684,268 1,287,549 17,155,369 Deposits and loans from customers 9,140,573 34,787,182 4,244,764 5,621,333 4,694,160 58,488,012 Financial, trade and other liabilities 670,711 2,698, ,200 2,263,897 4,684,722 10,491,960 12,994,836 50,169,880 4,418,964 7,885,230 10,666,431 86,135,341 As at 31 December 2007 In thousands of SKK Slovakia Czech Republic Cyprus Assets Russian Federation Other Total Cash and cash equivalents 2,088,819 5,860,630 2,215 3,449, ,340 11,982,459 Financial assets at fair value through profit or loss 314,022 4,475,804 19, ,924 2,640,009 7,808,715 Financial instruments held to maturity 11,746 31,105 42,851 Securities available for sale 805,021 89,814 1, ,111 1,130,242 Loans and advances to customers 5,027,424 7,647,517 6,284, ,568 5,885,293 25,260,143 Trade receivables and other assets 3,225,808 3,622,705 1,360, ,008 3,165,506 11,549,898 Liabilities 11,461,094 21,708,216 7,668,679 4,398,955 12,537,364 57,774,308 Deposits and loans from banks 8,146,556 14,777,393 27, ,533 23,768,205 Deposits and loans from customers 9,002,810 25,852,895 1,857, ,605 7,876,938 44,913,157 Financial, trade and other liabilities 5,002,965 4,494,397 1,401, ,899 6,747,904 17,795,527 22,152,331 45,124,685 3,259, ,227 15,441,375 86,476,

94 Credit risk impairment of financial assets As at 31 December 2008 In thousands of SKK Loans and advances to customers Financial assets at fair value through profit or loss (excl. derivatives) Financial instruments held to maturity Securities available for sale Trade receivables and other assets Within maturity (net) 48,235,819 7,250,445 30, ,304 7,752,899 After maturity (net) 3,470, ,096 Total 51,705,881 7,250,445 30, ,492 8,186,995 A Assets for which a provision has been created (overdue and impaired) Gross 6,064,836 5, ,761 provision individual (2,695,356) (5,277) (481,518) provision collective (9,469) (3,556) Net 3,360,011 5,687 B Assets for which a provision has not been created (overdue but not impaired) after maturity <30 days 9, ,350 after maturity days ,641 after maturity days 1,641 after maturity days 51 13,754 after maturity days 44,200 14,934 after maturity >365 days 55, , , ,409 Total 3,470, ,096 As at 31 December 2007 In thousands of SKK Loans and advances to customers Financial assets at fair value through profit or loss (excl. derivatives) Financial instruments held to maturity Securities available for sale Trade receivables and other assets Within maturity (net) 24,709,299 7,203,073 42,851 1,130,242 9,886,566 After maturity (net) 550,844 1,663,332 Total 25,260,143 7,203,073 42,851 1,130,242 11,549,898 A Assets for which a provision has been created (past due and impaired) Gross 1,309,821 9, ,862 provision individual (649,678) (9,719) (126) (556,360) provision collective (122,334) (20) (101,209) Net 537,809 51,293 B Assets for which a provision has not been created (past due but not impaired) after maturity <30 days 12, ,298 after maturity days ,571 after maturity days 173,259 after maturity days 89,297 after maturity days ,246 after maturity >365 days 555,368 13,035 1,612,039 Total 550,844 1,663,

95 Liquidity risk Liquidity risk arises in the general funding of the Group s activities and in the management of positions. It includes both the risk of being unable to fund assets at appropriate maturities and rates and the risk of being unable to liquidate an asset at a reasonable price and in an appropriate time frame. Various methods of managing liquidity risks are used by individual companies in the Group, including individual monitoring of large deposits. The Group s management focuses on methods used by financial institutions, that is, diversification of sources of funds. This diversification makes the Group flexible and limits its dependency on one financing source. Liquidity risk is evaluated in particular by monitoring changes in the structure of financing and comparing these changes with the Group s liquidity risk management strategy. The Group also holds, as a part of its liquidity risk management strategy, a portion of its assets in highly liquid funds. The table below provides an analysis of assets and liabilities into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. Expected maturities differ from contracted ones as historical evidence shows that most short-term loans and deposits are prolonged. The analysis is presented under the most prudent consideration of maturity dates, where options or repayment schedules allow for early repayment possibilities. Therefore, in the case of liabilities, the earliest possible repayment date is shown while for assets the latest possible repayment date is disclosed. Those assets and liabilities that do not have a contractual maturity date are grouped together in the undefined maturity category. Maturities of financial assets and liabilities As at 31 December 2008 In thousands of SKK Assets Up to 3 months 3 months to 1 year 1 year to 5 years Over 5 years Undefined maturity Cash and cash equivalents 11,647,895 11,647,895 Financial assets at fair value through profit or loss 7,305,181 1,141,955 8,447,136 Financial instruments held to maturity 5,208 25,652 30,860 Securities available for sale 891, ,492 Loans and advances to customers 11,031,682 26,616,127 5,614,830 2,598,237 20,420 45,881,296 Receivables from sale of discontinued operations 47,978 1,710,643 4,065,964 5,824,585 Trade receivables and other assets 4,735,923 2,643,889 44,915 4, ,161 8,186,995 Liabilities 35,665,359 32,112,614 9,751,361 2,602, ,581 80,910,259 Deposits and loans from banks 6,497,835 1,304,187 8,118,598 1,111, ,423 17,155,369 Deposits and loans from customers 27,314,840 29,365,414 1,057,719 52, ,988 58,488,012 Financial, trade and other liabilities 5,519,412 1,511, ,600 2,799, ,708 10,491,960 39,332,087 32,181,381 9,556,917 3,962,837 1,102,119 86,135,341 Loan commitments 3,130,164 1,215,171 71, ,767 4,840,821 Total 093

96 As at 31 December 2007 In thousands of SKK Assets Up to 3 months 3 months to 1 year 1 year to 5 years Over 5 years Undefined maturity Cash and cash equivalents 11,982,459 11,982,459 Financial assets at fair value through profit or loss 6,530, , , ,653 7,808,715 Financial instruments held to maturity 21,992 20,859 42,851 Securities available for sale 1,034,677 95,565 1,130,242 Loans and advances to customers 7,292,970 15,147,212 2,792,202 10,737 17,022 25,260,143 Trade receivables and other assets 6,553,136 2,917, ,328 7,763 1,831,371 11,549,898 Liabilities 33,415,250 18,232,314 3,950, ,153 1,943,958 57,774,308 Deposits and loans from banks 5,968,343 2,311,755 9,807,888 5,187, ,671 23,768,205 Deposits and loans from customers 24,315,474 17,953,055 1,419, , ,040 44,913,157 Financial, trade and other liabilities 8,753,608 1,378, ,289 2,535,728 4,280,775 17,795,527 39,037,425 21,642,937 12,074,864 8,256,177 5,465,486 86,476,889 Loan commitments 1,330, , ,133 2,446,911 Total Interest rate risk The Group s operations are subject to the risk of interest rate fluctuations to the extent that interest-earning assets (including investments) and interest-bearing liabilities mature or reprice at different times or in differing amounts. The length of time for which the rate of interest is fixed on a financial instrument therefore indicates to what extent it is exposed to interest rate risk. The table below provides information on the extent of the Group s interest rate exposure based either on the contractual maturity date of its financial instruments or, in the case of instruments that reprice to a market rate of interest before maturity, the next repricing date. Those assets and liabilities that do not have a contractual maturity date or are non interest-bearing are grouped together in the maturity undefined category. Various methods of managing interest rate risks are used by the banking entities of the Group. Management focuses on methods applied by financial institutions, in particular the Value-At-Risk methodology. The banks use the Value-At-Risk methodology based on a 99% confidence level and a ten-day holding period. The Present Value Basis Point methodology is also used to measure interest rate risk for particular time groupings. Interest rate risk exposure as at 31 December 2008 is as follows: In thousands of SKK Assets Up to 1 year 1 year to 5 years Over 5 years Undefined maturity Cash and cash equivalents 7,333,477 4,314,418 11,647,895 Financial assets at fair value through profit or loss 1,817,570 90,154 10,967 6,528,445 8,447,136 Financial instruments held to maturity 30,860 30,860 Securities available for sale 234, , ,492 Loans and advances to customers 44,832, , ,724 5,253 45,881,296 Receivables from sale of discontinued operations 1,123,643 4,065, ,978 5,824,585 Trade receivables and other assets 1,104, ,512 6,971,271 8,186,995 Liabilities Total 56,476,961 4,761, ,691 19,111,389 80,910,259 Deposits and loans from banks 13,151,902 2,429,835 1,573,632 17,155,369 Deposits and loans from customers 56,457, ,449 48,543 1,205,723 58,488,012 Financial, trade and other liabilities 5,491,012 1, ,354 4,449,669 10,491,960 75,100,211 3,208,209 2,171,529 5,655,392 86,135,

97 Interest rate risk exposure as at 31 December 2007 was as follows: In thousands of SKK Assets Up to 1 year 1 year to 5 years Over 5 years Undefined maturity Cash and cash equivalents 10,042,594 1,939,865 11,982,459 Financial assets at fair value through profit or loss 761, ,005 39,589 6,845,120 7,808,715 Financial instruments held to maturity 21,992 20,859 42,851 Securities available for sale 1,034,612 95,630 1,130,242 Loans and advances to customers 24,875, ,022 16,231 25,260,143 Trade receivables and other assets 902,106 3,085 10,644,707 11,549,898 Liabilities Total 37,638, ,971 39,589 19,541,553 57,774,308 Deposits and loans from banks 17,254,790 4,439,994 1,830, ,766 23,768,205 Deposits and loans from customers 41,763,655 1,478, ,542 1,145,898 44,913,157 Financial, trade and other liabilities 4,355,460 50, ,389,612 17,795,527 63,373,905 5,968,333 2,356,375 14,778,276 86,476,889 Foreign exchange risk The Group takes on exposure to effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. As at 31 December 2008, the exposure to foreign exchange risk translated to thousands of SKK is as follows: In thousands of SKK SKK USD EUR CZK Other Total Assets Cash and cash equivalents 4,281,434 2,070,932 1,137,326 3,332, ,626 11,647,895 Financial assets at fair value through profit or loss 394,269 27,426 7,475, ,752 8,447,136 Financial instruments held to maturity 30,860 30,860 Securities available for sale 545, ,611 2, ,492 Loans and advances to customers 22,694,766 3,455,531 2,421,250 15,545,377 1,764,372 45,881,296 Receivables from sale of discontinued operations 4,587,996 1,236,589 5,824,585 Trade receivables and other assets 2,414,338 41,450 3,134,389 2,558,807 38,011 8,186,995 34,523,854 5,962,182 6,720,532 30,492,650 3,211,041 80,910,259 Off balance sheet assets 8,836,455 17,265,230 5,213,401 62,024,781 2,161,985 95,501,852 Liabilities Deposits and loans from banks 2,663,969 1,751, ,032 12,560,112 54,029 17,155,369 Deposits and loans from customers 13,051,511 3,386,034 2,726,882 38,334, ,413 58,488,012 Financial, trade and other liabilities 1,511,304 21,930 4,490,972 4,392,313 75,441 10,491,960 17,226,784 5,159,191 7,343,886 55,286,597 1,118,883 86,135,341 Off balance sheet liabilities 21,908,198 31,123,453 18,104,086 47,677,013 15,486, ,298,779 Off balance sheet items are mostly receivables and payables related to derivative operations, granted and received promises and guarantees, granted and received pledges and assets under management. 095

98 As at 31 December 2007, the exposure to foreign exchange risk translated to thousands of SKK was as follows: In thousands of SKK SKK USD EUR CZK Other Total Assets Cash and cash equivalents 1,622,073 3,032,524 1,631,601 4,651,679 1,044,582 11,982,459 Financial assets at fair value through profit or loss 4, , ,378 6,378, ,863 7,808,715 Financial instruments held to maturity 11,746 31,105 42,851 Securities available for sale 606,422 1, ,945 94,461 2,502 1,130,242 Loans and advances to customers 10,949,698 1,387, ,989 11,505,938 1,165,432 25,260,143 Trade receivables and other assets 5,041, ,993 2,394,749 3,349, ,831 11,549,898 18,223,456 5,715,700 4,875,662 25,991,175 2,968,315 57,774,308 Off balance sheet assets 17,222,700 9,917,607 5,411,175 49,478, ,413 82,604,344 Liabilities Deposits and loans from banks 3,411,280 1,008,171 4,267,380 14,934, ,143 23,768,205 Deposits and loans from customers 13,066,392 2,254, ,439 28,593, ,882 44,913,157 Financial, trade and other liabilities 4,099, ,345 7,831,807 4,724, ,099 17,795,527 20,577,022 4,184,844 12,695,626 48,252, ,124 86,476,889 Off balance sheet liabilities 34,177,970 19,837,397 9,591,715 50,029,830 8,909, ,546,184 Operational risk Operational risk is the risk of loss arising from fraud, unauthorised activities, error, omission, inefficiency or system failure. It arises from all the Group s activities and is a risk faced by all business organisations. Operational risk includes legal risk. The Group s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group s reputation with overall cost effectiveness and avoid control procedures which restrict initiative and creativity. The primary responsibility for the implementation of controls to address operational risk is assigned to management within each subsidiary. This responsibility is supported by the development of overall standards within the Group for the management of operational risk which is done by the Risk Department and which cover the following areas: Requirements for the reconciliation and monitoring of transactions. Identification of operational risk within the framework of each subsidiary s control system (development of conditions for decreasing and limiting operational risk, as well as its impacts and consequences; recommendations for appropriate solutions in this area). Reporting of operational risk events by entering the information into the regulated consolidated Group s database of operational risks. This overview of the Group s operational risk events allows the Group to specify the direction of the steps and processes to take in order to limit these risks, as well as to make decisions with regard to: a) accepting the individual risks that are faced; b) initiating processes leading to limitation of possible impacts; or c) decreasing the scope of the relevant activity or discontinuing it entirely. To obtain more detailed quantification on the scope of risks faced, the Group evaluates quarterly values from variables that are averaged within the framework of the Basic Indicator Approach (BIA). Sensitivity analysis a. Interest rate risk The Group performs stress testing using a standardised interest rate shock, i.e. an immediate decrease/increase in interest rates by 100 basis points ( bp ) along the whole yield curve is applied to the interest rate positions of the portfolio. 096

99 The result of the stress test In thousands of SKK Decrease in interest rates by 100 bp (137,793) (338,019) Increase in interest rates by 100 bp 137, ,019 b. Foreign exchange risk A 100 bp strengthening of the Slovak Crown against the Czech Crown, US Dollar and Euro would have had a negative effect on the portfolio. Effect on portfolio in percentage: % % CZK USD EUR A 100 bp weakening of the Slovak Crown against the Czech Crown, US Dollar and Euro would have had an equal but opposite effect on the portfolio. c. Equity price risk A 10% strengthening of the largest financial investments - shares in Unipetrol, a.s. and ZENTIVA N.V. (see Note 23) would have had a positive effect on the total balance sheet % % Effect on total Balance sheet in percentage A 10% weakening of the largest financial investments - shares in Unipetrol, a.s. and ZENTIVA N.V. (see Note 23) would have had an equal but opposite effect on the total balance sheet. Capital management The Group s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of its business. For the relevant part of the Group, consolidated capital adequacy is calculated in accordance with regulations of the Central Bank of the Czech Republic. Decree No. 123/2007 Coll. which incorporates the relevant regulations of the European Community (Directive 2006/48/EC and Directive 2006/49/EC) that are based on new requirements of the Basel Capital Accord, known as Basel II. The Group started to apply the new regulations as of 1 January 2008, therefore the table below shows in 2007 the Group s capital position calculated in accordance with Basel I (as defined in the International Convergence of Capital Measurement and Capital Standards (updated April 1998) and Amendment to the Capital Accord to incorporate market risks (updated November 2005)). The Consolidated Group s capital is analysed into two tiers: Tier 1 capital, which includes ordinary share capital, share premium, retained earnings, translation reserve and minority interest after deductions for goodwill and intangible assets. Tier 2 capital, which includes qualifying subordinated liabilities. The Regulated Consolidated Group (RCG) is defined for the purposes of the prudential rules on a consolidated basis by the Act on Banks No. 21/1992 and Decree No. 123/2007 Coll. (Regulation of the Central Bank of the Czech republic). According to this regulation, the financial holding group of the ultimate shareholders of J&T Finance Group is defined as RCG. Different consolidation rules are applicable for RCG s purposes only companies which have the status of financial institutions as defined by Czech legislation are fully consolidated. 097

100 Regulatory Capital In thousands of SKK Core capital (Tier 1) 16,426,872 14,783,159 Supplementary capital (Tier 2) 737, ,133 Total regulatory capital after deductible items 17,164,408 15,597,292 Capital requirements Credit risk of investment portfolio 7,991,297 6,742,024 Operational risk (BIA) 586,770 General interest risk 52,849 18,104 General equity risk 4,507 42,187 Capital requirement for currency risk 1,631,506 1,864,500 Capital requirement for commodity risk ,619 Credit risk of trading portfolio 1,689,277 1,936,410 Total amounts of capital requirements 10,267,344 8,678,434 The regulatory capital is calculated as the sum of the core capital (Tier 1) and supplementary capital (Tier 2) reduced by deductible items and increased by capital for market risk coverage (Tier 3). Tier 1 capital comprises paid up share capital, the statutory reserve fund, other equity funds and retained earnings. Tier 2 capital comprises subordinated debt approved by the Czech National Bank in an amount of EUR 24,215 thousand (SKK 737,536 thousand). The deductible items include intangible assets recognized at net book value ,164,408 15,597,292 Calculation of Capital adequacy ratio 8% x 8% x 10,267,344 8,678,434 Capital adequacy ratio 13.37% 14.38% The capital adequacy ratio is calculated according to regulatory requirements as the ratio of regulatory capital to total capital requirements multiplied by 8%. The capital adequacy ratio must be at least 8%. 39. FIDUCIARY TRANSACTIONS Fiduciary placements represent funds customers have instructed the Group to place in other banks. The Group is not liable to the customer for any default by the other bank, nor do creditors of the Group have a claim on the assets placed. In 2008 fiduciary transactions performed by IBI BANK AG amounted to CHF 623,888 thousand (SKK 12,561,337 thousand) compared to CHF 116,934 thousand (SKK 2,365,694 thousand) in the previous year. The Group also acts in its own name as trustee or in fiduciary capacities for the account of third parties. The assets managed in such capacities are not reported on the balance sheet unless they are invested with the Group. The Group earns commission and fee income from such transactions and assets. These activities potentially expose the Group to liability risks in cases of gross negligence with regard to non-compliance with its fiduciary and contractual duties. The Group has policies and processes in place to manage these risks. 098

101 40. ASSETS UNDER MANAGEMENT In thousands of SKK Assets in own-managed funds 1,566,537 2,240,871 Assets with discretionary mandates 3,883,566 4,518,925 Other assets under management 27,743,554 8,135,060 Total assets under management (including double counting) 33,193,657 14,894,856 Of which double counting 10, ,897 Calculation method Assets under management comprise all client assets managed or held for investment purposes only. In summary, these include all balances due to customers, fiduciary time deposits and all valued portfolio assets. Custodial assets (assets held solely for transaction and safe-keeping purposes) are not included in assets under management. Assets in own-managed funds This comprises assets of all the Group s investment funds. Assets with discretionary mandates Securities, value rights, precious metals, the market value of fiduciary investments with third parties and customer deposits are included in the calculation of assets with discretionary mandates. The figures comprise both assets deposited with Group companies and assets deposited with third parties, for which the Group companies hold a discretionary mandate. Other assets under management Securities, value rights, precious metals, the market value of fiduciary investments with third parties and customer deposits are included in the calculation of other assets under management. The figures comprise assets for which an administration or advisory mandate is exercised. Double counting This item comprises fund units from own-managed funds, which are disclosed both in client portfolios with discretionary mandates and in other client safe-keeping accounts. 41. RELATED PARTIES Identity of related parties The Group has a related party relationship with its parent company and ultimate parent company and other parties, as identified in the following table, either at 31 December 2008 or during the year: (1) Ultimate shareholders and companies they control (2) Entities with joint control or significant influence over the entity and its subsidiaries or associates (3) Associates (4) Joint ventures in which the Group is a venturer (5) Key management personnel of the entity or its parent (6) Other related parties x the company was not a related party at the year-end. 099

102 In thousands of SKK Ref. Accounts receivable 2008 Accounts payable 2008 Accounts receivable 2007 Accounts payable 2007 Ultimate shareholders and companies they control 1 881,678 2, , J&T Finance Group II, a.s. 2 4,435 7, J&T INVESTMENT HOLDING, a.s. 2 62,150 67,060 SUPPORT & REAL, a.s , ,055,232 Proportion a.s ,565 RM-S HOLDING, a.s ,949,691 ABS Bravo Limited 3 34, Pražská energetika, a.s. 3 2,784 31,063 ABS Plane Limited 4 114,855 2, ,937 DCA park, s.r.o ,898 Henbury Development, s.r.o. 4 19, Popper Capital, s.r.o. 4 38,561 5,477 29,627 RETISE ENTERPRISES LIMITED 4 62,949 12, VSV consulting, s.r.o. 4 3,248 98,874 Vulkan Intim Brands a.s. 4 19, Other Joint ventures and associates 3, , ,000 RESR Real Estate Management Anstalt 5 3,447,337 1,592 CACR Corporate Advisors Anstalt 5 1,123, Wire Trade Establishment 5 1,091, , ,995 Total for disposed entities of segment Real Estate 5 11,829, ,209 1,279,376 1,769 Total for disposed entities of segment Services 5 1,259,459 39,301 Total for disposed entities of segment Corporate 5 3,168, , ,657 Other key management personnel of the entity or its parent and companies they control 5 260,311 1,516, , ,638 Others 2,389,539 1,722, ,673 1,714,568 Total 26,143,224 6,427,440 3,214,430 3,694,531 A provision for doubtful debts due from the Ultimate shareholders and companies they control was partially reversed in The reversal was in an amount of SKK 110 thousand leaving the closing balance of the provision at SKK 16,412 thousand. Ultimate shareholders and companies they control includes the following: J&T Securities, s.r.o., J&T Sport Team, Jakabovič Ivan, KOLIBA REAL s.r.o., TECHNO PLUS, a.s. and Tkáč Jozef. None of these, except TECHNO PLUS, a.s., produce publicly available consolidated financial statements which include the Group. 100

103 The summary of transactions with related parties during 2008 and 2007 is as follows: In thousands of SKK Ref. Revenues 2008 Expenses 2008 Revenues 2007 Expenses 2007 Ultimate shareholders and companies they control 1 51, ,425 8 J&T Finance Group II, a.s , J&T INVESTMENT HOLDING, a.s , ,349 SUPPORT & REAL, a.s , , garantovaná a.s ,625 1,869 ABS Bravo Limited 3 3, ,349 9 Pražská energetika, a.s. 3 15, ,762 PREdistribuce, a.s. 3 13, ABS Plane Limited 4 13, , DCA park, s.r.o. 4 13, EXONERATE TRADING LIMITED 4 41, ,548 6,215 Popper Capital, s.r.o. 4 2, ,657 RETISE ENTERPRISES LIMITED 4 3, , Other Joint ventures and associates 3,4 3, ,219 7 RESR Real Estate Management Anstalt 5 3,628,275 CACR Corporate Advisors Anstalt 5 643,325 Wire Trade Establishment 5 128,622 57, , ,706 Total for disposed entities of segment Real Estate 5 390, ,857 9, Total for disposed entities of segment Services 5 72,538 73,858 Total for disposed entities of segment Corporate 5 185, ,154 1,184 Other key management personnel of the entity or its parent and companies they control 5 132,162 22,484 69,914 36,646 Others 829,745 1,187,038 39,977 2,098,503 Total 6,172,997 2,146, ,043 2,385,738 The summary of guarantees with related parties at year-end is as follows: In thousands of SKK Ref. Guarantees received 2008 Guarantees provided 2008 Guarantees received 2007 Guarantees provided 2007 Ultimate shareholders and companies they control 1 3,401,619 11,477 2,073,055 2,733 J&T Finance Group II, a.s. 2 2, garantovaná a.s ,708 ABS Bravo Limited 3 91, ,674 G1 INVESTMENTS LIMITED 3 1,812,354 Popper Capital, s.r.o. 4 33,920 RETISE ENTERPRISES LIMITED 4 9,670 Key management personnel of the entity or its parent and companies they control 5 13,099, ,019 1,331, ,989 Others 1,081,643 Total 17,616, ,242 5,434, ,175 Transactions with directors and partners Total remuneration included in personnel expenses and loans to directors and partners are as follows: In thousands of SKK Remuneration 152,094 1,676,958 Loans 108,850 1,154,580 Of the loans to directors and partners, new loans of SKK 118,774 thousand were granted during 2008 and SKK 1,164,505 thousand were repaid. 101

104 42. SUBSEQUENT EVENTS MAG MEDIA, a.s. and J&T MEDIA ENTERPRISES, a.s. merged into Slovenská produkčná, a.s. on 1 January This company now owns the license for broadcasting television channel JOJ in Slovakia. On 1 January 2009 TEPLO MOST, a.s. merged with its parent company PRVNÍ MOSTECKÁ a.s. PRVNÍ MOSTECKÁ a.s. has been an associate of J&T Finance Group since 28 February As at the year end, it is included in Disposal group held for sale (see Note 26). The company is active in the distribution of heat, warm utility water, and trading with heat. On 30 April 2009 the Group sold its 100% share in ZST, a.s. This company is included in the Disposal group held for sale (see Note 26) in the Flats & Offices Real Estate segment. On 30 April 2009 the Group sold its 49.95% share in the joint venture company Vulkan Intim Brands a.s. BAYSHORE BANK AND TRUST CORPORATION (Barbados) acquired by the Group in April 2008 has changed its name to J&T Bank and Trust Inc. on 29 May 2009 and continues to provide private banking services in the Caribbean markets under the J&T private banking design. As mentioned on page 7, in 2009 the Group has continued with the reorganisation of its activities which should be completed in the second half of the year by selling the remaining part of the Corporate Investment segment (energy and industry). As of 1 January 2009, the Slovak Republic became a member of the Euro Zone and adopted the Euro as its national currency. As the parent of the Group, J&T FINANCE GROUP, a. s. is seated in the Slovak Republic, the Euro became the presentation currency for the Group s financial statements as of that date and the functional currency of the Parent Company. The opening consolidated balance sheet and comparatives for 2008 will be converted using the official conversion rate of Slovak Crowns to one Euro. 43. DISPOSED ENTITIES Disposed subsidiaries, special purpose entities, associates and joint ventures classified as discontinued operations Segment Real Estate Amarat, s.r.o. ANJOU ENTERPRISES LIMITED ARACAJU TRADING LIMITED Baltschug, LLC BATACLAN s.r.o. BIANKO, s.r.o. Botus, s.r.o. Bratislavské nábrežie, s.r.o. Bratislavské podhradie, s.r.o. Callies Enterprises LTD CONTIGY DEVELOPMENT LIMITED Development Pobřežní, s.r.o. DIAMOND HOTELS SLOVAKIA, s.r.o. Ditrio, s.r.o. Dúbravská, s.r.o. ENDETA, a.s. FENSTERA s.r.o. Filiálka, s.r.o. FK - AGRO a.s. GETONIX a.s. 102

105 GRANDHOTEL PRAHA a.s. Heli Hotel, s.r.o. Henbury Development, s.r.o. Hotel SASANKA s.r.o. HUMAR, s.r.o. INTERZNANIE verejná akciová spoločnosť Interhouse Košice, a.s. Interhouse Tatry s.r.o. J&T FACILITY MANAGEMENT, s.r.o. J&T Hotels Management, LLC J&T Hotels Management, s.r.o. J&T REAL ESTATE CZ, a.s. J&T Real Estate Vostok J&T REAL ESTATE, a.s. KALONI, a.s. Kalos, s.r.o. Karloveské rameno, s.r.o. Karloveské rameno II, s.r.o. Karloveské rameno III, s.r.o. KAROT s.r.o. Kráľova hora, s.r.o. KÚPELE ŠTRBSKÉ PLESO - VYSOKÉ TATRY, s.r.o. KÚPELE ŠTRBSKÉ PLESO, a.s. LAJES s.r.o. Lamačská 1, s.r.o. Lamačská 3, s.r.o. Landererova, s.r.o. Lexington s.r.o. Limerick, s.r.o Logistics development s.r.o. Lomnická, s.r.o. MENOLLI, s.r.o. MERIDIANSPA ŠTVANICE, a.s.(former MERIDIANSPA s.r.o.) Národný futbalový štadión, a.s. Pasint, s.r.o. PK FIN, s.r.o. Popper Capital, s.r.o. Pribinova 25, s.r.o. PROSEK COURT s.r.o. Prosek Point s.r.o. Real Estate Administration, a.s. River Park Base, s.r.o. River Park Hotel, s.r.o. Rustonka Development s.r.o. Slovenský odpadový priemysel, a.s. Stará tehelňa, s.r.o. Sterin, s.r.o. Tarfex, s.r.o. Tatra Property, s.r.o. Tatranské lanové dráhy, a.s. TAVELA, a.s. TERCES MANAGEMENT LIMITED TESAKO s.r.o. TINSEL ENTERPRISES LIMITED 103

106 Verdan, s.r.o. VSV consulting s.r.o. WITTILY INVESTMENT LIMITED Zarnara, s.r.o. Segment Corporate Investments AISE, s.r.o. AKNAVI STEEL MANAGEMENT LIMITED BETA FIN, s.r.o. Czech Wind Holding, a.s. ČES s.r.o. ČKD Blansko Holding, a.s. ČKD Blansko SMALL HYDRO, s.r.o. ČKD Blansko Strojírny, a.s. ČKD Blansko Wind, a.s. EGE-ENERGOVOD, s.r.o. EGEM s.r.o. Energetické montáže Holding, a.s. Energetické opravny a.s. ENV HOLDING, a.s. ESTABAMER LIMITED Ingramm International N.V. JASNÁ Nízke Tatry, a.s. J&T Corporate Finance Slovakia, a.s. J&T FINANCE, LLC J&T GLOBAL SERVICES LIMITED J&T Investment Advisors, s.r.o. J&T SERVICES, s.r.o. KALIMRAJ EQUITY MANAGEMENT LIMITED Kolifaktor, s.r.o. MR TRUST s.r.o. MSEM, a.s. Plzeňská energetika a.s. POWERSUN a.s. (formerly BLACKROCK, a.s.) PROFI-ELRO s.r.o. První brněnská strojírna Brno DIZ, a.s. SEG s.r.o. SEGFIELD INVESTMENTS LIMITED SERW, spol. s r.o. SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. including subsidiaries TP 2, s.r.o. VČE - montáže, a.s. VSS, a.s., Košice VSS Trading, s.r.o. VSS Foundry, s.r.o. VTE Pastviny s.r.o. West Bohemia Energy Holding a.s. Segment Services ABS Bravo, Ltd. ABS Jets, a.s. ABS PLANE Limited ABS Property Limited ABS Sprinter Limited 104

107 AC Sparta Praha fotbal, a.s. AERO GROUP, a.s. AeskuLab s.r.o. Arthur Bradley & Smith, a.s. ARTHUR, BRADLEY & SMITH LIMITED BIOLAB Praha, s.r.o. CEDELAB s.r.o CZ Hospitals, s.r.o. Delita, s.r.o. Hebilab s.r.o. HPL spol. s r.o. J&T Credit Investments, a.s. JET ONE LEGACY LIMITED JET TWO LEGACY LIMITED Laboratoře lékařské mikrobiologie, s.r.o. LABOREX, s.r.o. Mikrobiologická laboratoř s.r.o. Miranda, s.r.o. Nemocnica A.Leňa Humenné, n.o. Nemocnica arm.generála L.Svobodu Svidník, n.o. NOVAPHARM, s.r.o. Novozit, s.r.o. Spoločné zdravotníctvo, a.s. Svět Zdraví, a.s. Svet zdravia, a.s. TOPLAB,s.r.o. Železničná Lekáreň s.r.o. Železničné zdravotníctvo Košice, s.r.o. Other disposed subsidiaries, special purpose entities, associates and joint ventures 1. garantovaná a.s. AHIMSA DEVELOPMENT LIMITED APHOTICA INVESTMENT PROPERTIES LTD DCA park, s.r.o. Deštné Baude, s.r.o. DNV Base DNV Logistics Európská zdravotná poisťovňa, a.s. FEBOSEM LIMITED FSAM - FIRST STEEL ASSETS MANAGEMENT LIMITED InvestAge a.s. Investage Consulting s.r.o. Investage Services s.r.o. (formerly B & P Network Management, s.r.o.) LEVOS LIMITED Nitra Park II PROPORTION a.s. RETISE ENTERPRISES LIMITED RETISE, s.r.o. RM-S HOLDING, a.s. SIRKLEIN HOLDINGS LTD. SLOVAKIA STEEL MILLS, a.s. STEMWILL, a.s. Výskumný ústav papiera a celulózy, a.s. Západoslovenské žriedla, a.s. 105

108 44. GROUP ENTITIES The list of the group entities as at 31 December 2008 is set out below: Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method J&T FINANCE GROUP, a. s. Slovakia 100 direct 100 direct Full J&T FINANCE, a. s. Czech Republic 100 direct 100 direct Full J&T BANKA, a. s. Czech Republic 100 direct 100 direct Full Bea Development, a.s. Czech Republic 100 direct 100 direct Full J&T SECURITIES (SLOVAKIA), o.c.p., a.s. Slovakia 100 direct J&T ASSET MANAGEMENT, INV. SPOL., a.s. Czech Republic 100 direct 100 direct Full J&T Bank (Switzerland) Ltd. (former IBI Bank AG) Switzerland 100 direct 100 direct Full IBI FUND ADVISORY S.A. Luxembourg 100 direct 100 direct Full J&T GLOBAL SERVICES LIMITED (former J&T FINANCIAL SERVICES Ltd.) Cyprus 100 direct J&T Integris Group LTD Cyprus 100 direct 100 direct Full J&T BFL Anstalt Lichtenstein 100 direct Full Bayshore Merchant Services Inc British Virgin Islands 90 direct Full INTEGRIS FUNDS LIMITED Cayman Islands 100 direct Full BAYSHORE BANK AND TRUST CORPORATION Barbados 100 direct Full PRIVATE COUNSELS TRUST INTEGRIS BANK AND TRUST (TURKS & CAICOS ISLANDS) LTD. Turks & Caicos Islands 100 direct Full Turks & Caicos Islands 100 direct Full J&T Concierge, s.r.o. (formerly KARRLI) Czech Republic 100 direct Full J&T Bank ZAO (previously Tretij Rim ZAO) Russia 100 direct 100 direct Full Slovenský odpadový priemysel, a.s. Slovakia 100 direct ZST, a.s. Slovakia 100 direct 100 direct Full J&T Investment Advisors, s.r.o. Czech Republic 100 direct Ingramm International, B.V. Netherlands 100 direct Geodezie Brno a.s. Czech Republic direct direct Full J&T REAL ESTATE CZ, a.s. Czech Republic 100 direct MERIDIANSPA ŠTVANICE, a.s. (former MERIDIANSPA s.r.o.) Czech Republic 50 direct J&T REAL ESTATE, a.s. Slovakia 100 direct Logistics development, s.r.o. Slovakia 100 direct J&T REAL ESTATE VOSTOK Russia 100 direct J&T ASSET MANAGEMENT, a.s. Slovakia 100 direct 100 direct Full Honor Invest, a.s. Czech Republic 100 direct 100 direct Full Pražská energetika, a.s. Czech Republic direct 34 direct Equity PREdistribuce, a.s. Czech Republic 100 direct 100 direct Equity PREměření, a.s. Czech Republic 100 direct 100 direct Equity ODEM a.s. Czech Republic 100 direct Equity PREleas, a.s. Czech Republic 100 direct 100 direct Equity První zpravodajská a.s. Czech Republic 100 direct 100 direct Full J&T SERVICES, s.r.o. Czech Republic 100 direct AISE, s.r.o. Czech Republic 51 direct J&T Facility Management, s.r.o. Slovakia 100 direct První energetická a.s. Czech Republic 100 direct 100 direct Full J&T Finance, LLC Russia 100 direct >> 106

109 Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method J&T Hotels Management, s.r.o. Slovakia 100 direct Czech Wind Holding, a.s. Czech Republic 100 SPE POWERSUN a.s. Czech Republic 66 SPE ČES s.r.o. Czech Republic 64 SPE MR TRUST s.r.o. Czech Republic 100 SPE VTE Pastviny s.r.o. Czech Republic 100 SPE Development Pobřežní, s.r.o. Czech Republic 100 direct J&T Private Equity B.V. Netherlands 100 direct 100 direct Full BAULIGA a.s. Czech Republic 100 direct 100 direct Full SOR Libchavy spol. s r.o. Czech Republic direct 92 direct Full SOR SLOVAKIA, s.r.o. Slovakia 100 direct 100 direct Full SOR Poland z o.o. Poland 100 direct 100 direct Full SOR Bulgaria EOOD Bulgaria 100 direct 100 direct Full J&T FINANCIAL INVESTMENTS Ltd. Cyprus 100 direct 100 Direct Full West Bohemia Energy Holding a.s. Czech Republic 95 SPE Plzeňská energetika a.s. Czech Republic 50 SPE RM-S HOLDING, a.s. Czech Republic Direct RM-S Invest a.s. Czech Republic 100 Direct Deštné Baude, s.r.o. Czech Republic 50 Direct J&T Credit Investments, a.s. Czech Republic 100 SPE Full AC Sparta Praha fotbal, a.s. Czech Republic SPE Full Akadémia AC Sparta, s.r.o. Slovakia 85 SPE Full Střední pedagogická škola s.r.o. Czech Republic 100 SPE Full Barton & Lloyd Investment, spol. s r.o. Slovakia 100 direct 100 Direct Full Západoslovenské žriedla, a.s. Slovakia Direct Masna Holding Limited Cyprus 100 direct 100 Direct Full Českomoravský uzenářský holding, a.s. Czech Republic 100 direct 100 Direct Full KMOTR - Masna Kroměříž, a.s. Czech Republic 100 direct 100 Direct Full Vysočina, a.s. Czech Republic 100 direct 100 Direct Full Krahulík-MASOZÁVOD Krahulčí, a.s. Czech Republic 100 direct 100 Direct Full BLUESTORE, s.r.o. Czech Republic 90 direct Full 1 Czech Energy Holding, a.s. Czech Republic 100 direct 100 SPE Full United Energy právní nástupce, a.s. Czech Republic 100 direct 100 SPE Full United Energy Moldova, s.r.o. (former ENOP, s.r.o.) Czech Republic 100 direct 100 SPE Full Lounské tepelné hospodářství spol s r.o. Czech Republic 100 direct 100 SPE Full United Energy Trading, a.s. Czech Republic 100 direct 100 SPE Full EKY III, a.s. Czech Republic 100 direct 100 SPE Full United Energy Invest a.s. Czech Republic 100 direct 100 SPE Full United Energy Coal Trading, a.s. Czech Republic 100 direct Full PRVNÍ MOSTECKÁ a.s. Czech Republic direct Equity TEPLO MOST, a.s. Czech Republic 100 direct Equity J&T International Anstalt Lichtenstein 100 direct 100 direct Full Equity Holding, a.s. Czech Republic direct direct Full Bratislavské podhradie, s.r.o. Slovakia 95 SPE Tinsel Enterprises Limited Cyprus 95 SPE GRANDHOTEL PRAHA a.s. Slovakia 100 SPE Interhouse Tatry s.r.o. Slovakia 50 SPE >> 107

110 Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method Bratislavské nábrežie, s.r.o. Slovakia 95 SPE River Park Hotel, s.r.o. Slovakia 95 SPE DIAMOND HOTELS SLOVAKIA, s.r.o. Slovakia 95 SPE Arthur, Bradley & Smith Ltd. UK 100 SPE ABS PLANE Limited Ireland 50 SPE ABS Property Ltd. Ireland 100 SPE ABS Bravo, Ltd. Ireland 20 SPE ABS Jets, a.s. Czech Republic 100 SPE Arthur Bradley & Smith a.s. Czech Republic 100 SPE ABS Sprinter, Ltd. Ireland 100 SPE AERO GROUP, a.s. Czech Republic 100 SPE Jet One Legacy Limited Ireland 100 SPE Jet Two Legacy Limited Ireland 100 SPE Tatranské lanové dráhy, a.s. Slovakia 95 SPE Pribinova 25, s.r.o. Slovakia 95 SPE Kúpele Štrbské Pleso, a.s. Slovakia SPE KÚPELE ŠTRBSKÉ PLESO VYSOKÉ TATRY, s.r.o. Slovakia 100 SPE InvestAge a.s. Slovakia SPE Investage Consulting s.r.o. Slovakia 100 SPE Investage Services s.r.o. Slovakia 100 SPE Kráľova hora, s.r.o. Slovakia 95 SPE Lomnická s.r.o. Slovakia 95 SPE Karloveské rameno, s.r.o. Slovakia 95 SPE ČKD Blansko Holding, a.s. Czech Republic 95 SPE ČKD Blansko Wind, a.s. Czech Republic 100 SPE ČKD Blansko Strojírny, a.s. Czech Republic 93 SPE ČKD HYDRO POWER PRIVATE LIMITED India SPE ČKD Blansko SMALL HYDRO, s.r.o. Czech Republic 100 SPE Prosek Point s.r.o. Czech Republic 95 SPE VULKAN akciová společnost Czech Republic SPE SPE Full VULKAN Intim Brands a.s. Czech Republic SPE SPE Equity Segfield Investments Limited Cyprus 95 SPE SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. Slovakia SPE ENERGOPROJEKTY a.s. Slovakia 34 SPE SES INSPEKT, s.r.o. Slovakia 100 SPE SES REAL, s.r.o. Slovakia 100 SPE SES KREDIT s.r.o. Slovakia 100 SPE DB SLOVAKIA investičný fond, a.s. Slovakia 100 SPE SES ENERGY, a.s. Slovakia 100 SPE SES BOHEMIA ENGINEERING, a.s. Czech Republic 61 SPE SES Hungaria, s.r.o. Hungary 90 SPE SES BOHEMIA s.r.o. Czech Republic 100 SPE SES Energoprojekt, s.r.o. Slovakia 51 SPE SES TVP s.r.o. Slovakia 100 SPE SES Polska Poland 100 SPE >> 108

111 Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method První brněnská strojírna Brno DIZ, a.s. Czech Republic 97.5 SPE Anjou Enterprises Limited Cyprus 95 SPE Real Estate Administration, a.s. Czech Republic 40 SPE Humar, s.r.o. Slovakia 95 SPE Svet zdravia, a.s. Slovakia 95 SPE NOVAPHARM, s.r.o. Slovakia 51 SPE Železničná Lekáreň s.r.o. Slovakia 100 SPE Novozit s.r.o. Slovakia 85 SPE Železničné zdravotníctvo Košice s.r.o. Slovakia 100 SPE HPL spol. s r.o. Slovakia 50 SPE Lekáreň pri radnici spol. s r.o. Slovakia 60 SPE HPL TN spol. s r.o. Slovakia 67 SPE HPL NR spol. s r.o. Slovakia 67 SPE HPL BB spol. s r.o. Slovakia 66 SPE HPL PETRŽALKA spol. s r.o. Slovakia 100 SPE HPL KE spol. s r.o. Slovakia 100 SPE K.M. Šariš, s.r.o. Slovakia 100 SPE HPL SERVIS spol. s r.o. Slovakia 100 SPE HPL LABMEDTO spol. s.r.o. Slovakia 100 SPE Spoločné zdravotníctvo, a.s. Slovakia 66 SPE Nemocnica arm. generála L. Svobodu Svidník, n.o. Slovakia 100 SPE Nemocnica A. Leňa Humenné, n.o. Slovakia 100 SPE Miranda s.r.o. Slovakia 100 SPE Landererova, s.r.o. Slovakia 95 SPE STOMARLI HOLDINGS LIMITED Cyprus 95 SPE 95 SPE Full Lamačská 1, s.r.o. Slovakia 95 SPE Dúbravská s.r.o. Slovakia 95 SPE Henbury Development, s.r.o. Slovakia SPE LEVOS LIMITED Cyprus 90 SPE Popper Capital, s.r.o. Slovakia SPE Svět Zdraví, a.s. Czech Republic 95 SPE CEDELAB, s.r.o. Czech Republic 100 SPE Mikrobiologicka laboratoř, s.r.o. Czech Republic 100 SPE AeskuLab s.r.o. Czech Republic 100 SPE TOPLAB, s.r.o. Czech Republic 100 SPE BIOLAB Praha, s.r.o. Czech Republic 100 SPE LABORATOŘE LÉKAŘSKÉ MIKROBIOLOGIE, s.r.o. Czech Republic 100 SPE LABOREX, s.r.o. Czech Republic 100 SPE Gomanold Trading Limited Cyprus 95 SPE 95 SPE Full EXONERATE TRADING LIMITED Cyprus 50 SPE 50 SPE Equity >> 109

112 Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method Gomanold společnost s ručením omezeným Czech Republic 100 SPE 100 SPE Full RETISE ENTERPRISES LIMITED Cyprus 50 SPE RETISE, s.r.o. Czech Republic 100 SPE Retunk, a.s. Czech Republic 100 SPE 100 SPE Full FERVENT HOLDINGS LTD Cyprus 95 SPE 95 SPE Full Tatra Property, s.r.o. Slovakia 95 SPE Delita, s.r.o. Slovakia 95 SPE LCE Company Limited Cyprus 95 SPE 95 SPE Full PK FIN, s.r.o. Slovakia 95 SPE FENSTERA s.r.o. Czech Republic 95 SPE Botus, s.r.o. Slovakia 95 SPE Stará tehelňa, s.r.o. Slovakia 95 SPE ARACAJU TRADING LIMITED Cyprus 95 SPE KALOS, s.r.o. Slovakia 95 SPE LAJES s.r.o. Czech Republic 95 SPE LEXINGTON s.r.o. Czech Republic 95 SPE Heli Hotel, s.r.o. Slovakia 95 SPE MENOLLI, s.r.o. Slovakia 95 SPE Rustonka Development, s.r.o. Czech Republic SPE Filiálka, s.r.o. Slovakia SPE PROSEK COURT s.r.o. (former ANAMOS s.r.o.) Czech Republic 95 SPE AKNAVI STEEL MANAGEMENT LIMITED Cyprus 95 SPE BETA FIN, s.r.o. Slovakia 100 SPE VSS, a.s. Košice Slovakia 100 SPE VSS Trading, s.r.o. Slovakia 100 SPE VSS Foundry, s.r.o. Slovakia 100 SPE FSAM - FIRST STEEL ASSETS MANAGEMENT LIMITED Cyprus 100 SPE SLOVAKIA STEEL MILLS, a.s. Slovakia 100 SPE Európská zdravotná poisťovňa, a.s. Slovakia 95 SPE Lamačská 3, s.r.o. Slovakia 95 SPE TESAKO, s.r.o. Slovakia SPE Národný futbalový štadión, a.s. Slovakia 90 SPE BATACLAN s.r.o. Czech Republic 95 SPE DCA park, s.r.o. Slovakia SPE TERCES MANAGEMENT LTD. Cyprus SPE INTERZNANIE OAO Russia 100 SPE BIANKO, s.r.o. Czech Republic SPE Interhouse Košice, a.s. Slovakia SPE VSV consulting s.r.o. Slovakia SPE Výskumný ústav papiera a celulózy, a.s. Slovakia 100 SPE RM-S HOLDING, a.s. Czech Republic 10 SPE Energetické montáže Holding, a.s. Czech Republic 95 SPE MSEM a.s. Czech Republic 100 SPE VČE-montáže, a.s. Czech Republic 100 SPE SEG s.r.o. Czech Republic 100 SPE Pasint, s.r.o. Slovakia 95 SPE >> 110

113 Country of Consolidated incorporation % Owner-ship Consolidated interest % Owner-ship interest Consolidation method Zarnara, s.r.o. Slovakia 95 SPE Sterin, s.r.o. Slovakia 95 SPE Tarfex, s.r.o. Slovakia 95 SPE Amarat, s.r.o. Slovakia 95 SPE KALONI, a.s. Slovakia 95 SPE J&T MEDIA ENTERPRISES, a.s. Slovakia 95 SPE 95 SPE Full MAC TV s.r.o. Slovakia 100 SPE 100 SPE Full MAG MEDIA, a.s. Slovakia 100 SPE 100 SPE Full Slovenská produkčná, a.s. Slovakia 100 SPE 100 SPE Full ESTABAMER LIMITED Cyprus 95 SPE SERW, spol. s r.o. Czech Republic 100 SPE DNV Logistics, s.r.o. Slovakia 95 SPE River Park Base, s.r.o. Slovakia 95 SPE KAROT s.r.o. Czech Republic 95 SPE TAVELA, a.s. Czech Republic SPE Karloveské rameno II, s.r.o. Slovakia 95 SPE NEEVAS INVESTMENT LIMITED Cyprus 95 SPE 95 SPE Full CZ Hospitals, s.r.o. Czech Republic 95 SPE Nitra park II, s.r.o. Slovakia 95 SPE AHIMSA DEVELOPMENT LIMITED Cyprus 95 SPE APHOTICA INVESTMENT PROPERTIES LTD Cyprus 95 SPE 1. garantovaná a.s. Slovakia SPE M.M.B.M., spol. s r.o. Slovakia 100 SPE G1 INVESTMENTS LIMITED Cyprus 100 SPE JASNÁ Nízke Tatry, a.s. Slovakia SPE Novácke chemické závody, a.s. Slovakia SPE SOLIVARY akciová spoločnosť Prešov Slovakia SPE ZBUDZA RESOURCES LLC USA 100 SPE KALIMRAJ EQUITY MANAGEMENT LTD Cyprus 95 SPE JASNÁ Nízke Tatry, a.s. Slovakia SPE WITTILY INVESTMENTS LIMITED Cyprus 95 SPE Baltschug OOO Russia 75 SPE CALLIES ENTERPRISES Cyprus 95 SPE GETONIX a.s. Czech Republic 100 SPE ENDETA, a.s. Czech Republic 47.5 SPE FK - AGRO a.s. Czech Republic 100 SPE Limerick, s.r.o. Slovakia 95 SPE FORAX PROPERTY LIMITED Cyprus 95 SPE Full POPELANTE DEVELOPMENT LIMITED Cyprus 95 SPE Full BLUESTORE, s.r.o. Czech Republic 10 direct Full 1 J&T Investment Pool - I - CZK, a.s. Czech Republic direct direct Full J&T Investment Pool - I - SKK, a.s. Slovakia 4.67 direct 2.67 direct Full J&T Capital Management Anstalt Lichtenstein 100 direct 100 direct Full 2 The structure above is listed by ownership of companies at the different levels within the Group. 1 The Group owns a 90% share in BLUESTORE, s.r.o. through its subsidiary J&T Private Equity B.V. and another 10% share through the subsidiary J&T International Anstalt. 2 J&T Investment Pool - I - CZK, a.s. and J&T Investment Pool - I - SKK, a.s. each own 50% in J&T Capital Management Anstalt. 111

114 CONTACT J&T FINANCE GROUP, a. s. Lamačská cesta 3, Bratislava Slovak Republic Tel.: Fax:

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