Doing Business in the Czech Republic and EU Dates and Topics May 17Czech Republic 2011 – Economic Overview May 19Doing Business in the Czech Republic - Introduction May 20Global Company in the Czech Republic and Slovak Republic-Case of McDonald May 24Financial Markets in the Czech Republic and their Regulation in the Context of Global Crisis May 25Microsoft Business Activities in the Czech Republic May 26Public Finance/ Health Care Sector in CR May 31The Financial Aspects of doing Business in the EU 1 June 2The Financial Aspects of doing Business in the EU 2 June 3The Financial Aspects of doing Business in the EU 3 June 7 Solar Energy Business in the Central Europe June 9 Prague Stock Exchange

Balance sheet ASSETS short term Cash and Marketable securities Account receivable Inventory ASSETS long term Gross property, plant & equipment –Accumulated depreciation Net property, plant & equipment LIABILITIES short term Account payable Short term debt Accruals LIABILITIES long term Long term debt Preferred stock Equity

Cash and Marketable Securities +enough alternative instruments to choose from. -relatively high fee structure

Receivables +Approaching level of standardization expected in modern business environment. + Financing of receivables through Pledging and Factoring available. - Cost is relatively high. -Relatively large variability around agreed terms of payments

Inventories +Introduction and use of modern methods of inventory financing (field warehouse financing, trust receipts, blanket inventory lien, etc.) - Cost of financing relatively high -Modern methods of inventories management (EOQ, etc.) are confined to large companies only.

Accounts Payables +heightened awareness of cost of trade credit if used as a source of financing. -too often misused as a source of financing with a disregard for buyer/ seller relationship. - Enforcing payment discipline costly and time consuming

Short term debt +Improvement in the variety of short term borrowing options from banking sector. Non Banking sector active as a lender to small and medium businesses, but costs are high. -banks don’t analyze borrower need and tend to concentrate only on large companies with good tracking record.

Acquisition of plants and equipment +Large companies use modern capital budgeting decision tools. +Market for leases relatively well developed - Recent government regulation intended to protect the lessee is slowing down expansion of market -Medium size and small companies use payback method at best, if at all.

Long term Debt +Corporate bond market is beginning to take off. Large corporation construct their offerings up to par with developed financial markets standards. -Market is still too thin a for many companies too expensive. + Needs for long term funds serviced trough bank loans

Equity source of financing +IPO’s done on the Prague stock exchange (Zentiva, ECM, Pegas, AAA Auto Group) in past four years. Hopefully, this trend will continue. -Unfortunately IPO’s are too few and far between, even as compared with equity markets in other “new market economies” (Poland).