Press releases pg. 94

The contractual relationships between CEZ and Skoda Power have been at arm’s length and set in a usual formal manner, including provisions on liquidated damages. Having examined the documentation pertaining to CEZ’s contracts for Skoda Power, Internal Audit found no evidence of informal relations that would indicate any improper, unethical or corrupt conduct.

Prague, 23 November 2011 – A project named Grid4EU, aimed at the development of smart grids in the European Union, has been launched officially. It is so far the largest demonstration project in power engineering supported by the European Union. Six European energy companies are taking part in it – including CEZ Group.

The CEZ Group has today announced its financial results for the first three quarters of 2011 and its expected all-year figures. As expected, CEZ’ Operating Profit Before Tax declined by 6.9% year on year to CZK 62.4 billion. This is due to lower effective prices of electricity resulting from the economic crisis, which reduced the forward contract prices in 2008 – 2010 when the CEZ Group sold its power to be generated in 2011. Another negative factor was a lower hedging CZK/EUR exchange rate due to the ongoing appreciation of the crown toward the euro but also a lower amount of power generated by hydro power stations due to deteriorated hydrological conditions. These negative factors were countered by measures aimed to optimize the use of production sources and a greater gross margin as well as the generation of power from renewable sources, primarily in foreign countries.

CEZ has today handed over an Invitation to Submit Bid with the relevant Tender Documentation to the three candidates that have qualified for the tender for the public contract of “Completion of the Temelin Nuclear Power Plant”.