El Pacífico

the financial situation of the Company

In 2010, the concerned power plants of the Group also met their obligations imposed on them by the carbon dioxide allowance trading system of the EU by the deadline. The power plants took advantage of the financial opportunities arising from the market price differences of the different types of emission allow- ances (EUA-CER), which may be used for settlement. Every facility has emission allowances in a number corresponding to its emissions.

Green energy

The Medium-term Strategy of the MVM Group had laid down the participation of the National Electricity Com- pany in the utilisation of renewable energy resources in Hungary as a high priority objective. To this end, on 23 November 2009, Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.) purchased Hun- garowind Szélerômû Üzemeltetô Kft. (Hungarowind Wind Power Plant Operating Ltd.) operating one of the most important wind farms in the country, which had an electricity output of 45.17 GWh in 2010. In 2009, Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.) began to study the applicability of pyrolysis technology in Hungary. At the beginning of 2010, a R&D contract was concluded for the construc- tion of a pilot plant to examine whether it is possible to utilise this technology at an industrial scale by produc- ing oil from plastic wastes, then electricity from oil in a closed system in compliance with the prescribed environmental protection parameters. In 2010, the pilot plant built in Gyôr, which is able to achieve an output of 0.5 MW, proved the applicability of the tech- nology at an industrial scale.

In 2010, MVM Trade Villamosenergia Kereskedelmi ZRt. (MVM Trade Power Trading Ltd.) traded 137.6 GWh of electricity and MVM Partner traded 268.6 GWh of electricity generated from renewable energy re sources. The latter company sold 158.2 GWh to con- sumers and 110.4 GWh in wholesale.

“Green” projects

A technology comprising a solar collector working on the principle of what is called solar parabola, which is considered new even in Europe, opens up a new possi- bility for the increasing utilisation of renewable energy

sources. The use of the solar collector decreases the quantity of natural gas used. Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.) has donated seven solar parabolas in total to social, health care and educational institutions, and four were installed on the office building of the Company, which result- ed in saving approximately 2,500 m3 _{of natural gas} in 2010.

At the end of 2010, the Environmental Protection Department of Magyar Villamos Mûvek Zrt. (Hungar- ian Power Companies Ltd.) assessed in advance the points where the environmental load of the office building can be decreased. The goal is that the con- ditions of selective waste collection, already imple- mented on the premises of Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.), should be identical in the whole area of the Central Office Build- ing and, consequently, the quantity of selectively col- lected wastes should increase by 20% year-on-year, also decreasing the proportion of municipal wastes. To increase the environmental awareness of the employees of the new Central Office Building, the Environmental Protection Department prepared an information brochure entitled “Green Island”, which can be found on the intranet.

assessment of the storage conditions of materials potentially harmful to environment at the compa- nies of the MVM Group and remediation of sites

Drawing lessons from the red sludge disaster near Ajka and in order to prevent similar incidents, the Board of Directors of Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.) ordered the assessment of the storage conditions of materials potentially harmful to environment. Commenced in 2010, the assessment of the storage conditions of the materials stored in the sludge ponds of Vértesi Erômû Zrt. (Vértes Power Plant Ltd.) and Paksi Atomerômû Zrt. (Paks Nuclear Power Plant Ltd.) is still under way.

The environmental protection authority accepted the documentation submitted to the authority on the com- pletion of the environmental remediation performed at the Inota gas turbine site owned by Magyar Villa mos Mûvek Zrt. (Hungarian Power Companies Ltd.), and ordered post-remediation monitoring for four years, which is still under way.

Post-remediation monitoring was still under way in 2010 (for nearly 10 years) at the Tuzsér site owned by Magyar Villamos Mûvek Zrt. (Hungarian Power Com- panies Ltd.)

Management system of the MVM Group

Magyar Villamos Mûvek Zrt. (Hungarian Power Com- panies Ltd.) operates a certified Environmental Man- agement System harmonised with the Strategy of the Company, forming an integral part of its decision-mak- ing system and conforming to the specifications of Hungarian Standard MSZ EN ISO 14001:2005, accord- ing to which it also has a group-level Environmental Protection Policy.

Quality Management

The next re-certification audit of Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.) took place on 17 and 18 March 2010, at which the Company successfully renewed the certificate of its Integrated Management System. With this, the Company merited the Gold Certificate of the Hungarian Standards Insti- tution (HSI). This certificate of merit may be awarded to companies that continuously develop their manage- ment system and continuously maintain their certifi- cate with the HSI for 12 years.

The project entitled “Development of the Quality Management System of Magyar Villamos Mûvek Zrt. (Hungarian Power Companies Ltd.), Preparation of Group-level Harmonisation” was launched in 2009. The project is aimed at ensuring that the manage- ment system conform to the central functions of Magyar Villamos Mûvek Zrt. (Hungarian Power Com- panies Ltd.) and at creating a framework and a possi- bility for integrating the already existing quality man- agement systems of the subsidiaries into a uniform system, thereby supporting the efficient operation of the central management functions (e.g., comprehen- sive risk management and strategic controlling). As part of the project, operational and business models were worked out for the MVM Group, the manage- ment, key and support processes were identified, and the modelling of these in a uniform support tool (ARIS) was completed. The Company also developed the electronic approval process of regulation docu- ments (work-flow), which it wishes to introduce and apply in 2011.