Decision entered into force on                                 DUPLICATE
June 2, 2003

                  [Official Seal of the Securities Commission]


                              SECURITIES COMMISSION


                                                      In Prague, on June 2, 2003
                                                           Ref.: 45/N/804/2003/2
                                                                 No. of pages: 5
                                                           No. of attachments: 1

                                    DECISION


The Securities Commission (the "Commission"), as an administrative authority for
capital markets pursuant to Act No. 15/1998 Coll., on the Securities  Commission
and on  Amendments  to Other Acts, as amended,  and as a state  monitoring  body
pursuant to Act No.  530/1990  Coll., on Bonds, as amended (the "Act on Bonds"),
and Act No. 591/1992 Coll., on Securities,  as amended (the  "Securities  Act"),
has decided on an application of a party to the  proceedings,  being CEZ, a. s.,
with its registered office at Duhova 2/1444, 140 53 Prague 4, Identification No.
45274649,  represented  by virtue of a power of  attorney  dated May 15, 2003 by
Ceskoslovenska  obchodni banka,  a.s., with its registered  office in Prague 1 -
Nove Mesto,  Zip Code:  115 20, Na Prikope  854/14,  Identification  No. 0001350
("Ceskoslovenska  obchodni  banka,  a.s."),  for  approval  of joint  terms  and
conditions  for a  previously  unspecified  number  of bond  issues  (the  "bond
program"),  for approval of a prospectus  for the bond program,  and for consent
pursuant to Section 9(16) of the Ministry of Finance's Decree No. 82/2001 Coll.,
stipulating the minimum  particulars of a securities  prospectus and an abridged
securities  prospectus  ("MF  CR's  Decree  No.  82/2001  Coll"),  as  regards a
reduction of the volume of  information  on the  activities  and  development of
activities of the issuer contained in the securities prospectus, as follows:

I.       Pursuant to the provisions of Sections 7 and 8 of the Act on Bonds, a
         bond program of the party to the proceedings, being CEZ, a. s., with
         its registered office at Duhova 2/1444, 140 53 Prague 4, Identification
         No. 45274649, consisting in:

         maximum volume of outstanding bonds
         issued as part of the bond program:             CZK 30,000,000,000

         duration of the bond program:                   10 years

         maturity of any issue forming
         part of the bond program:                       10 years at the maximum

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is hereby approved;  also approved,  pursuant to Section 74(1) of the Securities
Act, is a prospectus prepared for the bond program.  The approved prospectus for
the bond program forms an integral part hereof.

II.  Pursuant to the  provisions  of Section  75(4)a) of the  Securities  Act in
     conjunction  with Section 9(16) of MF CR's Decree No.  82/2001  Coll.,  the
     party to the proceedings,  being CEZ, a. s., with its registered  office at
     Duhova 2/1444, 140 53 Prague 4,  Identification  No.:  45274649,  is hereby
     allowed to  include  in the  prospectus  for the bond  program  information
     pursuant to Sections 8 and 11 of the said Decree only pertaining to CEZ.

                                    RATIONALE

On May 19, 2003,  the party to the  proceedings  submitted to the  Commission an
application for approval of a bond program (Ref.  7550/2003)  within the meaning
of Section 8 of the Act on Bonds and for approval of a  prospectus  prepared for
such bond program.  The application also contained  attachments  consisting in a
notarized  copy of an extract from the  Commercial  Register for  Ceskoslovenska
obchodni banka,  a.s., a prospectus for the bond program prepared pursuant to MF
CR's Decree No.  82/2001 Coll.  (including  the terms and conditions of the bond
program),  Articles  of  Association,  an extract  from the minutes of a regular
meeting of the Board of Directors dated April 7, 2003  (containing a decision on
the  establishment of the bond program),  and a Power of Attorney granted by the
party to the proceedings to Ceskoslovenska obchodni banka, a.s. to deal with the
Commission.  The party  further  supplemented  the  prospectus  by  filing  Ref.
8720/2003  dated  May 30,  2003  with  certain  information  on its  activities;
specifically  with information  related to the process of  re-integration of the
Czech  power  sector.  On May 29,  2003,  the party to the  proceedings  added a
receipt  confirming the payment of an administrative  fee pursuant to items 63a)
and c) of the tariff attached to Act No. 368/1992 Coll., on Administrative Fees,
as amended (the "Act on Administrative Fees").

Pursuant to the  provisions  of Section 8(1) of the Act on Bonds,  a bond issuer
may apply for  approval  of joint  terms and  conditions  of bonds to apply to a
previously  unspecified  number of issues (bond program).  The application  must
also  contain  the  duration  of the bond  program  and the  maximum  volume  of
outstanding  bonds issued as part of the bond program.  In addition to the joint
terms and  conditions of the bonds,  the bond program that the party seeks to be
approved also contains the above  information.  The party to the proceedings has
determined  the  duration  of the bond  program  to be 10 years and the  maximum
volume of outstanding  bonds issued as part of the bond program to be limited to
CZK 30 bn. When  reviewing  whether the joint terms and  conditions of the bonds
and the prospectus  prepared for the bond program meet all  requirements  of the
relevant  provisions of the Act on Bonds  (Section 3a) or the Securities Act and
MF CR's Decree No.  82/2001 Coll.,  the  Commission  relied on the fact that the
unabridged  wording of the terms and conditions  applicable to individual  bonds
issues  as part of the bond  program  would  always  comprise  joint  terms  and
conditions  listed in the prospectus and a supplement  thereof for each specific
bond issue.  Having reviewed the joint terms and conditions,  the Commission has
arrived  at  the  conclusion  that  they  contain  a  significant  part  of  the
information  required by the Act on Bonds,  which may be jointly  determined  in
advance for several issues being performed under the bond program.


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<PAGE>


Pursuant to the  provisions  of Section  8(3) of the Act on Bonds,  approvals of
bond programs are  reasonably  subject to the provisions of Section 7 of the Act
on Bonds.  Pursuant to Section 8(4) of the Act on Bonds,  prior to each issue of
bonds under a bond program,  an issuer is obliged to prepare a supplement to the
terms and  conditions of bonds to contain a reference to the bond program and an
amendment  of the terms and  conditions  pursuant  to  Section  3a of the Act on
Bonds, unless they are already contained in the bond program,  and, if required,
other specific  terms and conditions of such issue,  and apply to the Commission
for  approval.  The issuer is obliged to publish the  approved  supplement  in a
manner  identical to that of the bond program.  The  supplement to the terms and
conditions of the bonds shall contain particularly such information which cannot
be determined in advance in the joint terms and  conditions  (specifically,  the
principal  amount and number of bonds in the given issue and their issue  price,
scheduling of the payment of bond yields or the maturity date of their principal
amount, and other terms and conditions of bonds in individual issues).

Pursuant  to the  provisions  of  Section  1(3) of the Act on  Bonds,  bonds are
subject to the  provisions  of the  Securities  Act,  unless the Act on Bonds or
other special  regulations  stipulate  otherwise.  Pursuant to the provisions of
Section 71(3)b) of the Securities Act, admission of a security to trading on the
public market is  conditional  on approval of the  respective  prospectus by the
Commission. Pursuant to the provisions of Section 71(3)c) of the Securities Act,
a security may be admitted to trading on the public  market,  only provided that
the respective  prospectus has been published in compliance  with the provisions
of Section 77(1) of the  Securities  Act, and at least one day has elapsed after
such  publication.  Pursuant  to the  provisions  of Section  8(5) of the Act on
Bonds, if a prospectus or an abridged prospectus has been published with respect
to a bond  program and bonds issued under the bond program are to be admitted to
trading on the  public  market or  publicly  offered,  an issuer or offeror  may
prepare a mere  supplement to the original  prospectus  or abridged  prospectus,
instead of preparing a new one. The  supplement  to the  prospectus  or abridged
prospectus  must  contain a reference  to the  original  prospectus  or abridged
prospectus,  specific terms and conditions of individual  bond issues not listed
in the original prospectus or abridged prospectus or the supplement to the terms
and  conditions,  and any and all  changes  that have  occurred  in  relation to
information  included in the original prospectus or abridged prospectus and that
are apt to influence the precise and correct  review of the quality of the bonds
and their issuer.  In addition to the  supplement to the terms and conditions of
the bonds,  the party to the proceedings  must also submit to the Commission (if
the party to the  proceedings  decides  to apply for  admission  of a bond issue
under the bond  program to trading on the  public  market) a  supplement  to the
prospectus pursuant to Section 8(5) of the Act on Bonds specifying,  inter alia,
the public  market where the bonds are to be traded.  Otherwise,  the party must
specify in the supplement that it is not to apply for admission of the bonds for
trading on the public market.

Legal  requirements  applicable to the bond program,  which are contained in the
provisions of Section 8 of the Act on Bonds,  reveal that a review of whether or
not the joint terms and conditions  together with the supplement  thereto within
the meaning of Section 8(4) of the Act on Bonds meet all the requirements of the
Act on Bonds is only possible  based on a supplement to the terms and conditions
prepared  prior to the respective  issue under the bond program.  Such procedure
applies mutatis mutandis when reviewing the completeness of a prospectus for the
bond program and a supplement to the prospectus  pursuant to Section 8(5) of the
Act on Bonds.

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<PAGE>

The  Commission has reviewed the joint terms and conditions of the bonds and the
prospectus  for the bond program,  and hereby notes that both  documents for the
most part contain information  required by the relevant provisions of the Act on
Bonds,  the Securities  Act, and MF CR's Decree No. 82/2001 Coll.  This involves
information that may be determined  jointly for a previously  unspecified number
of individual issues under the bond program. The Commission shall review whether
or not the terms and conditions of bonds,  or, if required,  a prospectus,  meet
all the  requirements  as to their  contents at all times upon the submission of
the  terms  and  conditions  and  the  supplement  to the  prospectus  prior  to
individual issues under the bond program.

Pursuant to the provisions of Section 76(2) of the Securities Act in conjunction
with  Section  1(3) of the Act on  Bonds,  the  Commission  does not  review  an
application  for approval of a bond program or the terms and conditions of bonds
in terms of the truthfulness or preciseness of information contained therein. As
a result,  it has not reviewed the given information from the viewpoint of their
correctness or authenticity.

In addition to the application for approval of the terms and conditions of bonds
and the prospectus for the bond program,  the party to the  proceedings has also
applied  pursuant  to Section  9(16) of MF CR's  Decree No.  82/2001  Coll.  for
consent  allowing it to  supplement  the  prospectus  for the bond  program with
information on activities and  development of activities to the extent  pursuant
to Sections 8 and 11 of the  above-specified  Decree  relating only to the party
alone,  rather than a  conglomerate,  a part of which it is. In the rationale of
the said application, the party to the proceedings observed that due to the fact
that it was an entity  controlled  by the  National  Property  Fund of the Czech
Republic  (the  "NPF"),   its  ability  to  influence  the  composition  of  the
conglomerate  was very limited and that it would have to give  information  on a
number of companies from various  economic  sectors where the NPF holds a stake.
Pursuant to an extensive  interpretation  of the  definition  of a  conglomerate
pursuant to Act No. 513/1991 Coll., the Commercial  Code, as amended,  the party
would then have to provide information on all companies in which the state holds
a stake.  With a view to a number of companies  interconnected  in such way with
the party to the  proceedings,  the preparation of the prospectus  would be very
time-consuming,  feasible  only  with  difficulties,  and  would not lead to the
provision of a more complete overview of the economic  situation of the party to
the  proceedings;  rather than that, the  prospectus  would become less lucid to
investors and more  complicated  in terms of a review of the party  itself.  The
party  to the  proceedings  further  notes  that the book  value  of  stakes  in
companies where the party has  controlling and significant  influence and which,
as of December 31, 2002, are not included in the consolidation  group comprising
CEZ,  a.s.,  CEPS,  a.s.  and  Severoceske  doly  a.s.,  was less than 1% (as of
December 31, 2002) of the total assets of the party to the proceedings, and that
the companies not included in the consolidation  group represent in aggregate as
of  December  31,  2002,  or, to be more  precise,  the year 2002,  0.57% of the
shareholders'  equity,  or 1.59% of the financial  results of the  consolidation
group, which would theoretically occur if all shareholdings were included in the
consolidation.  In light of the foregoing, the party to the proceedings believes
that if the prospectus  for the bond program  contains  information  only on the
issuer to the  extent  pursuant  to  Sections 8 and 11 of the  Decree,  no facts
significant  for the review of the issuer,  the program or bonds being issued as
part of the program will be  concealed  nor will the  prospect  represent  false
information.

Pursuant  to the  provisions  of Section  75(4)a)  of the  Securities  Act,  the
Securities  Commission  may approve  reduction  of a  prospectus  upon  request,
provided that the  prospectus  would not represent  false  information  and that
reduced will only be information with insignificant

                                      -4-
<PAGE>

influence on the review of the issuer and the security issued or being issued by
it, in  particular  in terms of a review of the  issuer's  situation  as regards
property, finances and yields and prospects for future development.  Pursuant to
the  provisions  of Section  9(16) of MF CR's  Decree  No.  82/2001  Coll.,  the
Commission  is  authorized  upon the  issuer's  request  to allow the  issuer to
include  in the  prospectus  information  related  only  to its  activities  and
development  in its  activities  or that of the  conglomerate,  provided that no
material facts are concealed.

When deciding on the consent  pursuant to Section  75(4)a) of the Securities Act
and Section  9(16) of MF CR's Decree No.  82/2001  Coll.,  the  Commission  made
allowance for the current  structure of the  conglomerate  in which the party to
the proceedings  participates and where the NPF enjoys a dominant  position.  In
addition,  the  Commission  took account of the fact that all material  economic
information  pertaining to the  subsidiaries  of the party to the proceedings is
listed in consolidated financial statements attached to the prospectus. In light
of the  foregoing  and also  due to the fact  that  the  extent  of  information
included  in the  prospectus  would be  enormous  if it related  to all  persons
comprising the  conglomerate,  which could impair the  information  value of the
prospectus,  the  Commission  has arrived at the  conclusion  that  inclusion of
information in the prospectus to the extent  pursuant to Sections 8 and 11 of MF
CR's Decree No.  82/2001  Coll.  only  relating to the party to the  proceedings
rather than the conglomerate in which the party  participates will not cause any
material  information  to be concealed,  and that a  requirement  of the general
clause as to the content and  functions  of the  prospectus  pursuant to Section
75(1) of the  Securities  Act will not be impaired.  That is why the  Commission
decided  to  accommodate  the  application  and made it  possible  for the party
pursuant to Section 9(16) of MF CR's Decree No. 82/2001 Coll., to include in the
prospectus  information  required by Sections 8 and 11 of the said Decree,  such
information to solely relate to the party to the proceedings.

As regards an  obligation  to pay a fee upon the  filing of an  application  for
approval of a bond program and a request for  reduction of the  prospectus,  the
Commission hereby notes that upon a request of the Commission,  the party to the
proceedings paid on May 28, 2003, to the  Commission's  account an amount of CZK
10,000 (item 63a) of the tariff attached to the Act on Administrative Fees), and
CZK 3,000 for the filing of the request for  reduction of the  prospectus  (item
63c) of the same tariff), i.e. CZK 13,000 in total.

With a view to all the facts stated  above,  the  Commission  has decided in the
manner specified in the ruling hereof.

                                      NOTE

Within 15 days  following  its  delivery,  this  decision may be appealed to the
presidium of the Securities  Commission,  Washingtonova 7, P. O. Box 208, 111 21
Prague 1 through the Securities Issuing Department,  which rendered the decision
(Section 61(1) of the Administrative Code).


[signature]                                  [signature]
Mgr. Marek Spurny                            Mgr. Katerina Benesova
Head of the Securities Issuing Dpt.          Head of the Disclosure Duty Section


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