The CIR Group operates in different sectors of industry and services both at national and at international level and thus its business is exposed to various kinds of financial risk, including market risk (exchange rate risk and price risk), credit risk, liquidity risk and interest rate risk. To minimize these risks the Group uses financial derivative instruments for hedging purposes.

Risk management is carried out by the central finance and treasury function on the basis of policies approved by the Management of CIR and transmitted to the subsidiaries on July 25 2003.

The main company risks identified, monitored and, as described below, managed by CIRi are the following:

• The market risk
• The credit risk
• The liquidity risk
• Interest rate risk