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Risk Management

CEZ Group continually develops an integrated risk management system and a system of internal control mechanisms, including an independent internal audit function that continually vets all processes for compliance with best practices, internal and external standards, and legislation.

An important risk management body is the Risk Management Committee, an advisory committee to the Chief Executive Officer of ČEZ which, with the exception of approving the risk limit in the one-year plan (in the competency of the ČEZ Board of Directors), proposes how the integrated risk management system will be developed; proposes the overall allocation of risk capital to individual risks and organization units; proposes binding rules, accountability, and a structure of limits for individual risks; and monitors the overall impact of risks on CEZ Group, including the degree to which CEZ Group’s debt capacity is drawn down, and fulfillment of rating requirements.

The monthly reports for the Risk Management Committee quantify unified development scenarios for selected risk factors and their impact on the current year, the business plan period, and the debt capacity.

During 2011, the risk management tools were further integrated with the strategy and central controlling processes: in particular, central unified management and quantification tools were introduced for risks associated with new plant and plant retrofit CAPEX projects, including putting additional emphasis on the importance of the risk profile of CAPEX projects being considered as the projects compete internally for CEZ Group resources.

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