Czech Business and Trade 3/2011

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3 2011 TRANSPORT,FORWARDING, LOGISTICS - EUROPEAN CROSSROADS CHOOSETHE BEST GOLF PLACE ÚSTÍ NAD LABEM REGION COMPETITIVENESS OFTHE CZECH REPUBLIC PETRA KVITOVÁFROM THE SMALL CZECH REPUBLIC CONQUERS THE WIMBLEDON 3 2011

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www.chemotex.czwww.chemotex.cz CHEMOTEX Děčín a.s. Tovární 63, 407 11 Děčín XXXII - Boletice nad Labem, Czech Republic phone: +420 412 547 461, phone/fax: +420 412 547 200, e-mail: chemotex@chemotex.cz is a major Czech manufacturer and supplier of highly efficient, ecological cleaning and degreasing products designed for applica- tions in the engineering industry, metal production, and other industrial sectors. These products are replacing the formerly man- ufactured chlorohydrocarbons, which are now virtually banned (perchlorethylene, trichlorethylene), or acetone, toluene, etc. The products can be applied in various ways, e.g. in hand wash- ing, pressure cleaning, submersion washing or in ultrasound washers and also as a filling for ecological washing tables. The cleaning and degreasing agents can be divided into water soluble substances – the product line designated as KORYNT, where the basis is a surface-active substance (surfactant), alkali, possibly acid, corrosion inhibitor, and naturally water. The series includes highly concentrated forms of micro-emulsions, which are gradually gaining in importance. The preparations of the KORYNT line are well biodegradable. Another segment in the range of goods are the cleaning and degreasing agents of the EBOL line – substances on the basis of hydrocarbon solvents and surface-active preparations characterised by a high degreasing ability and various times of vaporisation. Of major significance in the market are emulgating oils – machining and cooling liquids based on mineral oils, emulgators and other substances forming stable water emulsions. They are suitable for use on conventional machine tools, but are also applied on CNC machining centres. The range is complemented with anti-corrosion paints of the RISTIN line, and corrosion inhibitors for water and oil systems, designated as INDAKOR. The development, research, and production of the chemical agents is based on respect for the valid REACH chemical laws, while applying an individual approach to customers in the solu- tion of their needs and requirements. CHEMOTEX Děčín a.s.

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| 4 I N T R O D U C T I O N Martin Kocourek Questions for Martin Kocourek, the Minister of Industry and Trade of the Czech Republic On 13th April 2011, the European Commission published a list of 12 key proposals, known as the Single Market Act, that should guarantee a better-work- ing European market. The proposals are expected to be realised by the end of 2012. Individual, specific legislative proposals should be introduced by the Commission by the end of 2011. What is the Czech Re- public’s position regarding this document? A properly functioning single market, com- mon to the countries of the European Union, provides enterprises and citizens many bene- fits and opportunities. However, consumers and entrepreneurs still encounter obstacles that prevent them from exercising the four main freedoms – free movement of goods, services, people, and capital. The Czech Re- public, being an open economy, is one of the members interested in ensuring the exercise of these freedoms to the fullest possible ex- tent. Nonetheless, like many other countries, we have some reservations regarding the new document about the EU single market. What is the nature of your reservations? The twelve priorities of the Single Market Act include problematic proposals for measures we do not like. For example, the Czech Re- public is not very enthusiastic about the pro- posal of a regulation concerning a consoli- dated tax base for legal entities. We believe that direct taxes represent an important fiscal policy tool of each individual economy. Apartfromthat,theActcontainsa number of proposals for measures that have not been described in enough detail for the Czech Republic to adopt a clear position at this time. These include, for example, pro- posals for the establishment of a framework for the development of ethical investment funds and proposals concerning services of common economic interest. Every country will have certain reserva- tions. It is always hard to find a consensus among 27 countries. But what do you consider beneficial? The Single Market Act is a document that fo- cuses mainly on initiatives that could rejuve- nate the European Union’s economy. Specifi- cally, this means initiatives that are intended to support sustainable growth, employment growth and, most importantly, the competi- tiveness of European businesses. It should be noted that a number of the 12 measures had already been designated as priority when the European Commission published the original 50 proposals in October 2010. These include, in particular, an easier access of small and medium businesses to funding and the im- proved efficacy of the system for the recog- nition of professional qualifications, which is important for better mobility of the workforce. There is also much interest in the protection of intellectual property rights, e.g. in the issue of the European Union patent. The existing frac- tured and costly system of patent protection in Europe is a hindrance chiefly to innovative companies. And if one of the main goals of the current European Union is to foster greater competitiveness in European firms, it is abso- lutely essential to approve the EU patent. The development of network infrastructure is also important – the interconnectedness of na- tional markets must be improved. Not only the EU as a whole, but also the Czech Republic, is now putting emphasis on improving competitiveness... Yes, not only the European Union but each individual EU state should strive to make their economy succeed on the world market. We have to be able to respond to the economic growth of Asian countries such as China and India. To maintain or improve competitive- ness, firms have to develop top products and provide excellent services based on global demand. For this reason, and on the basis of a detailed analysis, i.e. identification of the weaknesses and qualities of the Czech econ- omy, the Ministry of Industry and Trade has created the Competitiveness Strategy of the Czech Republic.The analysis has identified the greatest opportunities and dangers the Czech economy will face in the future. We have to realise that the future does not depend solely on innovation; changes have to be made in a number of other areas as well, such as trans- parent public administration, improved effica- cy of healthcare and education, flexible labour market, and numerous other areas. We have set an ambitious goal: “back to the top”, or, in otherwords,togettheCRtobeamongthe20 most competitive world economies by 2020. The Czech Republic has been very active when the EU discussed and adopted the regulation on services. What is the situ- ation like on the internal market? The immediate priority is the complete and correct implementation of the regulation on Photo:MinistryofIndustryandTradearchives,PhotoCombo

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5 |5 | C Z E C H B U S I N E S S A N D T R A D E services in all member states, which is not happening at this time. Therefore, it is nec- essary to keep eliminating more and more obstacles that block access to the European service market. A well-functioning internal service market is a key prerequisite for the creation of new jobs in the European Union, which is not a minor matter. Besides that, it is also necessary to make the existing system for the recognition of professional qualifica- tions more efficient and transparent, which would contribute to employment growth. The fast development of the digital inter- nal market is also often discussed… Quite right. The development of digitis- ation is moving very quickly, and it is necessary to set certain rules. Legal reg- ulations pertaining to on-line business should also be adopted. On-line shopping in the European Union is hampered by numerous obstacles that erode consumer trust. The most important ones include concerns about the availability of cus- tomer service, unwillingness related to payments or delivery and limited options for returns or claims. It turns out that the internal market in cyberspace does not re- ally work, which is why we must advance towards a safe and transparently function- ing digital market. There are many things to improve that we are not happy with. What is it you are not happy with, then? For example, small and medium businesses fail to make proper use of the benefits of doing business on the internal market, which hinders further development of the rate of employment and economic growth. In many cases, businesses have problems finding their way around European legisla- tion and the national regulations of other member states. The complexity of legis- lation and high costs of information dis- suade them from doing business outside of their home state. The modernisation of the internal market has to go hand in hand with an open business policy towards the rest of the world. Europe’s sustainable growth cannot be based on pro- tectionist measures. An efficiently functioning internal market is an absolute must, if a stable and innovative economic environment is to be created and Europe is to succeed in global competition in the coming years.

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| 6| 6 E C O N O M I C P O L I C Y The Czech Republic achieves a per capita gross domestic product (GDP) of 80% of the EU average. In the last ten years, our country has moved up by 10 percentage points. Is that a lot, or not so much? And how have other EU countries fared during that time? And what are our ambitions in this regard? All these questions are discussed when deciding the future policies of the Czech govern- ment to support our international competitiveness. Martin Tlapa Back to the Top HIGH TIME TO GET MOVING Should we wish to praise the previous de- velopment of the GDP of the Czech econ- omy, we could point out that there are ten EU countries behind us, and that the rate of convergence has declined in ten other countries during the last ten years. However, if we want to be ambitious, we should look at the results of countries like Austria, Swe- den, Denmark, and Germany – then we have to be critical. This group achieves 116–122% of the current European average. No matter how we read the score sheet, the result is still the same. We have to do something, and do it fast. Based on the per capita GDP, the Czech Republic is still among the countries whose growth should be driven by innovation. The problemliesinthesewords:“shouldbedriven by innovation”. As can be seen in the results of the Innovation Scoreboard 2010, prepared by the European Union and published at the beginning of the year, which evaluates the in- novation potential of individual EU countries on the basis of 25 criteria, the Czech Republic is in a group of countries with below-average results. Countries sharing the group with the Czech Republic include Hungary, Estonia, Po- land, and Portugal. Northern countries tradi- tionally lead the race. This information is all the more alarming if we realise that the EU itself is gradually start- ing to lag behind the world in innovation. The fact that this not only concerns charts, but also a sustainable standard of living, is evidenced by the value that separates coun- tries with high innovation capacity from the less successful ones. According to data from the World Economic Forum, GDP per capita is more than twice as high in innovation economies than in countries that follow in- novation leaders. The position of the Czech Republic in an international comparison of competitive- ness has been declining. The Global Com- petitiveness Index, prepared annually by the World Economic Forum, shows that last year the Czech Republic dropped by five places to position 36. During the monitored period, we have not been able to draw near the highly competitive states, such as Germany and the Scandinavian countries. Instead, we have been converging towards countries like Spain, Italy, and Portugal. This is not good news for the future. It only serves to complete the picture of the currently dismal state of our economy. For this reason, the Ministry of Industry and Trade presents the Strategy for International Competitiveness, which touches all institutions of the public administration. AMBITIOUS GOAL ASKS FOR CHANGES The Czech Republic has set an ambitious goalforitself:tobeamongthe20mostcom- petitive economies of the world by 2020. The document, called “Back to the Top”, was prepared by the Ministry of Industry and Trade in collaboration with other ministries, the Confederation of Industry, and other professional associations and organisations. The wider public can also comment on the Competitiveness Strategy. Unlike all previ- ous documents, this Strategy has a clear path for realising this vision, outlined in 40 project cards. The document stipulates not only specific goals and a time schedule to be followed, but also responsibilities for each project. Each of the 43 project cards contains a scale for determining the rate of success of each particular project. Priorities were set on the basis of a detailed analysis. The detailed analysis identified three priority areas for the reform. The 3i logo thus means innovation, infrastructure, and institutions. Basic tools include quality institutions, infrastructure and macroeconomic stability, which cre- ate space for sustainable growth based on internal savings, business conditions, and innovation. In order for the Competitiveness Strategy to succeed, and I am talking about long- term success, it is necessary to link it to other important concept documents. From this point of view, the most important thing is to tie it closely to the Cohesion Policy 2014+, as both of these documents are mutually complementary (the Cohesion Policy may contribute to the funding of the Competi- tiveness Strategy in a number of cases) and their common implementation improves the stability of their long-term systemic implementation. Links to the Pro-export Strategy are also important because it is the ability of com- panies to succeed on foreign markets that largely determines the competitiveness of the Czech Republic. It is also important to link it to the Energy Concept and the Na- tional Reform Programme. Photo:MinistryofIndustryandTradearchives,www.sxc.hu

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7 | C Z E C H B U S I N E S S A N D T R A D E The Strategy is called“3i”because efficient institutions, quality infrastructure, and an in- novation-driven economy are the key areas of the document. Quality public institutions are a key pre- requisite for building a competitive econ- omy. It is all the more important because all international comparisons rate the insti- tutional environment as one the weakest areas of the Czech Republic. Of the number of measures proposed as a part of this pillar, I would like to point out two projects. The first project is an efficient public ad- ministration. This project includes measures aimed at professionalising and de-politicis- ing the public administration. At this time, there is no comprehensive overview of what it is the public administration does, nor is there a detailed concept of what it should provide and at what cost. It is necessary to turn the Czech public ad- ministration into what it is in most developed countries – i.e. a service provided to citizens and entrepreneurs, not a bureaucracy for the sake of bureaucracy that chokes economic growth and the development of businesses. The realisation of this project should, for the first time in the history of the Czech Republic, contribute to an overall evaluation of produc- tivity in the public administration and allow for the realisation of systemic saving measures (e.g. sharing certain activities among multiple institutions of the public administration). The second project of the institutions’ pil- lar is greater transparency and readability of the management of resources and public institution property. People are tired of cor- ruption cases connected with public orders, non-transparent sales of state property etc. – all these also significantly demean the reputation of the Czech Republic on the international level. Measures proposed by this project include both quick and cheap QUICK WIN solutions, such as “click-through budgets” (the ability to browse structured public spending on the Internet) and uni- fied publication of information on sales and leases of public property on one site, as well as extensive and demanding measures, such as a transition towards efficient financial management of the public administration. Transport infrastructure is also a key pre- requisite for improving the country’s com- petitiveness. At the same time, it is a tool that helps to balance inter-regional dis- parities. Therefore, it is necessary for the CR immediately to complete the building of a basic network forming the transport infra- structure (i.e. a backbone transport network of roads and highways, completion of the 4 transit railway corridors) and to ensure qual- ity maintenance of existing infrastructure. GOAL: STABLE CONTACT WITH THE TOP In the area of innovation, the Czech Republic has to focus on cooperation and, most impor- tantly, the transfer of knowledge between the business and academic sectors, which is cur- rently in a very bad shape. For this purpose, the natureofinnovationdemandinenterpriseshas to change, as do the“mental”environment and the minimal readiness of internal procedures andcapacitiesofthemajorityofacademicinsti- tutions for cooperation with businesses. One of the key measures of the innovation pillar is, for example, identification of key technological ar- easoftheCRonthebasisofforesight.Thesekey areas will help to determine what businesses and research should be supported. We are also preparing a new Pro-Export Strategy. This is a document the goals and tools of which have to be closely tied to the goals of the Competitiveness Strategy. In view of the openness of the Czech economy, suc- cess of exporters is one of the most important pointsintheefforttoimproveCzechcompeti- tiveness on the international level. The most important measure in this area is, besides the preparation of the Pro-export Strategy, the establishment of successful cooperation be- tween all institutions and agencies that repre- sent the CR abroad. We have to realise that the word “competi- tiveness”in itself does not only mean econom- ic performance, but also includes soft aspects, such as the educational system or the quality of the institutional environment. Our success in innovation thus depends on a number of other factors. Which is why the necessary re- formchangesina numberofotherareasmust be put into practice without delay. The Competitiveness Strategy is intended to become an important tool for the state, and its implementation in the following 10 years should bring about a better standard of living for the CR, as well as cement the position of the CR on the international level as a stable and developed country. The goal of the Strategy is not to plan future development. It is based on a comparisonwithothercountriesintheworld, butthisbenchmarkingshouldnotendwiththis Strategy. The goal is to maintain stable contact with the world’s best during the entire time the Competitiveness Strategy is put into effect. Martin Tlapa Deputy Minister of Industry and Trade for the EU, on International Competitiveness

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| 8 E N T E R P R I S E The Czech Republic may be very interesting for investors in many regards. For example, its mem- bership in the European Union, favourable geographical position, and qualified and relatively cheap workforce.“Our country represents an attractive and, at the same time, safe space for the entry of foreign firms,”Mr Jaroslav Hanák, President of the Confederation of Industry of the Czech Republic, emphasises in this context. The Czech Republic Represents an Attractive Safe Space for the Entry of Foreign Firms What kind of a partner is your institution to foreign firms that either do or want to do business in the Czech Republic? How can it be of assistance? Being the most important employer organis- ation in the Czech Republic, we lobby for the interests of our members during the legisla- tive process.We negotiate the form of reforms, inpartthankstoourpositionontheCouncilof Economic and Social Agreement, a joint body of government representatives, businessmen, and unions. That is our know-how and com- panies value that. Besides that, together with other European employer associations, we advance our interests on the European level – we are a member of the Confederation of European Business, BUSINESSEUROPE, and a number of other organisations. Therefore, we can help foreign firms in the capacity of a lobbying organisation with an abundance of knowledge, contacts, and resources. We have vast experience in con- sulting and negotiations with foreign part- ners regarding the quality of the business environment or the question of legislative changes. This applies to a large mission or an individual investor. We have sufficient information and our Confederation has a functional apparatus at its disposal. We are open to pragmatic dealings with anybody who shows a serious interest in doing busi- ness in our country. You have only recently been elected President of the Confederation of Industry of the Czech Republic, and the organisation’s wider leadership has also changed. What are your priorities? I have been given an extremely strong mandate at the General Meeting, of 90% of the Confederation’s voters who repre- sent a decisive portion of Czech industry and whose 1 600 firms employ 1.4 mil- lion workers. For me it is a call for more vigorous assertion of the interests of the business sector, which is also related to the interests of foreign investors. And we are not starting from the ground up – last year already, we formulated our ten pri- orities in the strategic document, Agenda 2010, which was prepared together with representatives of businesses and the most prominent Czech experts. If I were to summarise our priorities, the key one would be to improve the competitiveness of the Czech Republic. On the one hand, we have an industri- ous business sector that has successfully managed to overcome the consequences of the economic recession. On the other hand, increasingly harsh criticism is being addressed towards institutions, incorrect systemic management, expensive and in- efficient public and State administration. The state is a ball chained to the leg of our businesses, and we want to change that. This is also related to our growing pres- sure to limit excessive bureaucracy and corruption, both of which increasingly irk Czech businesses and citizens. Our calls to remedy the situation are all the more vocal, and the government has already started to implement some measures. We are also unhappy about the in- adequate enforceability of the law and too frequent legislative changes. This coun- try must ensure greater legal stability and simpler legal regulations. Apart from that, we realise that we will not be able to im- prove our competitiveness without more efficient support for science, research, and innovation. In view of the fact that our in- dustry produces 30% of the gross domestic product of the Czech Republic, and this fig- ure is unlikely to change in the years ahead, we will not be able to get by without tech- nically educated and qualified people. We have to invest in the new generations, and businesses have to participate as well. If you were to invite foreign companies to do business in the Czech Republic, what advantages would you mention? Why should they invest in doing business in this country? I believe the Czech Republic represents an attractive space for the entry of foreign in- vestors. The fact that we are criticising the deficiencies of this country is motivated by our efforts to continuously improve the conditions for doing business, so as to make them even more attractive to foreign firms. If I had to draw attention to one thing, it would certainly be our good, reliable, and qualified workforce that continues to be relatively cheap compared to other coun- tries. This is also evidenced by a survey ac- cording to which investors value the qualifi- cations of our workers, their motivation and productivity. Besides that, local people have presentable language skills. Our country also has an advantageous geographical position, which is not an insig- nificant matter when trying to arrive at a de- cision. You can reach any place in Europe within a matter of a few hours from Prague, our capital. Investors also undoubtedly re- alise that the Czech Republic is a member of the European Union, which implies other reasons for investing here. All in all, we have a number of advantages, and these can even increase with the governmental reforms which are being negotiated right now, and which should result in a more flex- ible labour market and a more transparent and simpler tax system. We are also negoti- ating some significantly more important in- vestment incentives, especially in fields with a higher added value. And let me add just one more thing: when entering a country, investors have to decide on the basis of a subjective view, a sense of security and the attractiveness of the living environment. In the case of the historical centre of Prague and other Czech towns, these conditions are certainly fulfilled. Basedonyourexperience,inwhatfieldscan foreignfirmssucceedintheCzechRepublic? If I could look back a few years, foreign investors succeeded in those industrial fields which had been successful from the point of view of the growth of their share in the gross domestic product and were export-oriented. I am referring specifically to the automotive and electrical indus-

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9 | tries. In future, we have to support the entry of investors into fields with a high added value that also include Research and Development. Companies that would bring modernisation to our industry are especially welcome. What is the current position of the Czech industry in the world when it comes to competitiveness? It is very good. It was industry that pulled the economy out of the crisis and that is now starting to stabilise again. Even though we probably will not reach full production capacity before 2012, we are already seeing some optimistic signals, and companies ex- pect the amount of orders and foreign de- mand to grow. The processing industry, especially the automotive industry, remains the major force. Other strong fields include machine- building, energy and the (initially surprising) boom in nanotechnologies. The competi- tiveness of our companies is evidenced by the fact that we are on top of the countries that have a significant portion of their ex- ports bound to the demanding European market. However, we are increasingly start- ing to focus on markets in third countries. Machine-building is a fundamental branch of Czech industry. What future do you see for this industry when compared to the rest of the world? Would foreign businessmen do well to invest in it in the Czech Republic? Machine-building is one of the main pro- pellers of the Czech economy. We have a tradition of over 150 years and, despite the limited size and open nature of our econ- omy, this industry has always played a rel- atively important role in Europe. Some of our brands – Škoda, Tatra, Zetor, Jawa – are known world-wide. Metal-cutting machines have also been a highly rated export article ever since the 1920s. The same holds true for supplies of manufacturing equipment, investment units and engines. In short, the importance ascribed to the machine-building industry in the Czech Republic is great. Naturally, we can see the growing requirements on world markets for the development and production of sophis- ticated machines with high utility value.This means we will not be able to remain com- petitive without significant investments in the development of science, research and support for applied research, which is in di- rect contact with the production sector and quickly able to react to its requests. And as has already been mentioned, we will also have to invest in the preparation of a new generation of quality technical intelligence. All these conditions will have to be met in order for the industrial sector to be able to react quickly to the demand for ma- chine-building products and for producers to maintain the competitiveness of their production. It is the only way for the Czech Republic to avoid losing its historical head start over the competition and to improve its position in the future. C Z E C H B U S I N E S S A N D T R A D E The Moravia-Silesia Region is a tradi- tional industrial region, with the most em- ployees in industry among all the 14 re- gions of the CR. Several hundreds of SMEs in the MS Region are involved in foreign trade. This is the reason why, in 2010, the Regional Chamber of Commerce in close collaboration with the Union for the De- velopment of the MS Region, supported by the Moravian-Silesian Region, estab- lished the International Trade Centre (ITC). The purpose of this project is to eliminate the disadvantages and obstacles faced by SMEs that are entering foreign markets. Besides the fact that ITC offers stand- ard services provided by the Chamber of Commerce and cooperates with Czech- Trade, it has a wide range of other activi- ties in a region with such a rich industrial tradition: special courses where lectures are read only by experts with long ex- perience in foreign trade; intermediation of participation in commercial missions and Trade Fairs abroad, due to collabor- ation with various institutions, unions, and chambers; use of the services of Czech economic diplomacy, mostly in those countries where CzechTrade does not operate any offices. In addition to Trade Missions, the representatives of SMEs may negotiate with potential partners at busi- ness meetings and ITC also uses its con- tacts with some foreign business entities operating in the CR. ITC is aware of the role played by inno- vation – our producers cannot succeed in international markets in the long term, unless they introduce innovations, unless they produce more efficiently with a high- er added value. Since 2011, ITC has been involved as an observer in a large interna- tional project – FutureSME – which focus- es on up-to-date, flexible, and economical procedures in the management of enter- prises and in their production. As a result of this, SMEs managers in the region enjoy direct and free access to outcomes of the project and may apply the results in their businesses. More on www.msunion.cz/en It is well known that the Czech Republic ranks among those open economies in which export plays a very important role. In 2010, total Czech exports reached 65% of GDP, the positive balance being almost EUR 5 billion. It has been emphasised countless times that well functioning small and medium-sized enterprises (SMEs) are the basis of a sound econ- omy. It is, however, necessary to keep in mind that such companies, unlike big corporations, cannot usually enjoy the comfort of a special, export-ori- ented department in which several experts are employed. International Trade Centre in the Moravia-Silesia Region

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| 1 0 In the second quarter of 2011, the Czech economy soared by 2.4% year- on-year. Compared to the previous quarter, gross domestic product (GDP) increased by 0.2%.The source of growth was still foreign trade, despite a certain slow-down, while a drop in final consumption expenditure had an opposite effect.The data correspond to analysts‘ estimates. Czech Economy Grew by 2.4% in 2nd Quarter Year-on-Year “The development of the demand side of the economy resulted from two conflicting ten- dencies, the same as in the previous five quar- ters“, the Czech Statistical Office (CZSO) said. The stable source for the GDP growth is still foreign trade, but its positive contribution to enhancing the performance of the economy is gradually decreasing. On the other hand, GDP development is negatively influenced by household final consumption expenditure, and this year also by that of government sec- tor institutions. “On the supply side, it was again manufac- turing which supported the growth of the economy most significantly, despite a slow- down of year-on-year increment“, the CZSO said. Year-on-year drops of the gross value added at constant prices in the sectors of agri- culture, market and non-market services had the opposite effect. Budget deficit decreased to CZK 61 billion in July State budget deficit decreased to CZK 61.1 bil- lionasoftheendofJuly,fromCZK62.9billionin June.InJulyoflastyear,budgetdeficitamount- ed to CZK 69 billion. A deficit of CZK 135 billion has been approved for the whole year. Tax revenues, excluding social security con- tributions, rose by 3.6% year-on-year, to CZK 309.6 billion. However, an almost 7% increase is expected in the approved budget. The collection of excise taxes increased by 6.1% as of the end of July, to CZK 78.6 billion. Of this, CZK 2.8 billion was accounted for by payments for electricity from solar energy. The budget provides for an overall increase by 7.6 % compared to 2010. Byyear-on-yearcomparison,totalstate expenditures decreased by 0.5%, to CZK 652.1 billion. The state spent CZK 258.6 billion on social benefits, three per cent more year-on- year. Of this, the state paid CZK 212.4 billion in old age pensions, which is almost six per cent more than a year before. Unemployment in the CR The unemployment rate in the Czech Repub- lic dropped by 0.1 percentage points to 8.1% in June month-on-month, and thus was at its lowestlevelinthelasttwoyears.Thenumberof vacancies increased as well - there was an aver- ageof12.5applicantsperjob,accordingtodata published by the Ministry of Labour and Social Affairs (MLSA). According to most analysts, the improved employment figures are the result of a recovery in domestic industry. Forecast: budget deficit will be below three per-cent level within two years The Czech National Bank has lowered its esti- mate of public finances deficit for this year to 3.8% of GDP. It also forecasts a better-than-ex- pected development in 2012, when the deficit is to amount to three per cent. For 2013, the centralbanknewlyestimatesthedeficitat2.8 %. TheCNB’spriorforecastswerefora fourper-cent deficit this year and 3.8% deficit in 2012. The Ministry of Finance expects deficits at 4.2% of GDP this year and 3.5% next year. Ac- cordingtoFinanceMinistryplanning,thepub- lic finances deficit is to drop below GDP 2.9% in 2013. About the year 2016, the government wants the public finances to be balanced. According to the CNB, the total government debt,whichiscomprisedofthecentralgovern- ment debt, the debts of health insurance com- panies, off-budget funds and local budgets, is to rise to 40.9% in relation to GDP this year, fromlastyear’s39.3%,nextyearitistobeatGDP 41.8% and in 2013 at 42.4%. By the criteria for the adoption of the European currency, euro, overall state debt must not exceed 60% of GDP. The CNB expects the gross domestic prod- uct to rise by 2.1% this year. Next year the bank expects 2.2% GDP growth. According to the CNB, overall inflation will temporarily exceed the three-per cent mark as a result of the planned value-added tax increase in 2012, but it is to return to the CNB’s two-per cent infla- tion target in 2013. 0 -20 -40 -60 -80 -100 -120 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 BALANCE SHEET OF CR STATE BUDGET - JANUARY-MAY (2002-2011 IN CZK BILLION) A N A L Y S I S On July 2011, the government approved changes concerning VAT increases. From next year two VAT rates, 20% and 14%, are to be in effect. Next year, the value added tax will remain at 20%, the reduced rate will increase to 14%, and in 2013 both rates will be merged at 17.5%. The state budget deficit should stop at CZK 105 billion. The Fitch Rating Agency has confirmed the Czech Republic’s main rating at the A+ level. It has also maintained the country’s positive outlook, which means that the rating can be upgraded. However, in the statement Fitch has warned against the risks of political tension in the government coalition, which might jeopardise a budget deficit decrease and structural reforms. THE STATE’S ECONOMIC RESULTS (JANUARY-JULY) IN CZK MILLION YEAR 2007 2008 2009 2010 2011 balance 19 676 9 275 -76 160 -69 007 -61 056 Source: Ministry of Finance of the Czech Republic

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1 1 | C Z E C H B U S I N E S S A N D T R A D E Tomáš Vít Central and Eastern Europe currently represent a huge territory for the development of business activities in virtually all sectors. This is also the experience of TÜV SÜD, a company engaged in the optimisation of technology, systems, and know-how in various sectors and in a number of countries around the world. The Czech Republic Still Has Great Potential for Business, Says Top Manager Tomáš Vít “I have been working in this region for twen- ty years and have a warm professional and personal relationship to it, which has even intensified since I assumed responsibility for the area of Central and Eastern Europe in the TÜV SÜD holding”, Tomáš Vít, Chief Ex- ecutive Officer of the TÜV SÜD Central East- ern Europe, company based in Prague, the capital city of the Czech Republic, told us at the beginning of an interview. From your experience, how has the region developed in recent years? And how is it recovering from the times of crisis? I have seen a period when more than 7% growth was driving East European econ- omies upwards, everybody was thrilled and thought that this euphoria would last forever. However, the crisis brought about a profound change. The extent of the shock for different countries was influenced by several factors, such as whether and on what level the particular country was linked with Western economies, and at what stage of development it found itself. Last but not least, it was important how experienced the particular nation was in coping with similar situations. Indeed, there are countries and nations which have been plagued by cri- ses for decades and cope with difficult situ- ations more easily than others. Which countries coped best with the crisis? Generally, Eastern Europe is getting out of the recession with greater difficulty and complications than, for example, Asian countries, which is also due to mentality. In any case, the countries that did best in over- coming the crisis were Russia, Turkey, and Poland. A fact worth to note – it was Poland which recorded a consumer goods revenue growth in the difficult period. In the past, Eastern Europe attracted the considerable interest of investors, is that still so? From the position of a person representing a certain crossover between Western and Eastern Europe, I can see two main direc- tions at present. One, formed by a number of foreign companies staying in the region and implementing their long-term business plans here. And there is the other, a kind of in-vogue direction. Companies, which had invested in the region in the past and profit- ed from it before the crisis, are now neglect- ing it. Nowadays, it is trendy to say that East- ern Europe is over, and that it is necessary to look at the opportunities for investment in Africa and South America. Which of the two do you prefer? We can certainly talk about opportunities offered by Africa and South America and say how wonderfully everything will work there. However, it is a world full of new sur- prises that no one knows well. While Eastern Europe is well surveyed, everybody knows what is normal in Poland, Hungary, or Russia, and what the situation is like in the Ukraine. In other words, if investors turn their atten- tiontoareasunexploredintermsofbusiness, they will encounter entirely new, unfathom- able problems, including the question of the personal safety of managers, which is not an issue in Central and Eastern Europe. Thus, I do not see the above-mentioned change of focus as correct. From my knowledge and experience, not only Eastern Europe, but, within the old continent, also the Czech Re- public, still have great potential. A current survey of German Chambers of Commerce in 16 countries of Central and Eastern Europe has again assessed the Czech Republic as the most attractive country for business in the region. Where do you see its advantages? Primarily in having qualified, innovative peo- ple, who are capable of applying the tested know-how of foreign investors in the local conditions. Indeed, this is also the basis of the present success of the Škoda car manu- facturer, in which Volkswagen made an in- vestment twenty years ago. What is the situation in the Eastern coun- tries where you operate? Can you apply your company’s know-how there with equal success? Generally, it is always better if the parent company allows the exported know-how to be adapted to the respective conditions, which is a task for the local management. In the case of our business, we always have to find the right people at the respective local- ity, who put forward cogent arguments for the suitable modification of our know-how, developed in Germany and supported by our immense base with a more than 140- year-oldtraditionoftheTÜVSÜDtrademark. This was also the necessary procedure taken in our largest foreign project - the establish- ment of a system of 189 permanent and 79 mobile stations for the technical inspection of vehicles in Turkey within the record span of 14 months. The primary purpose of your company is to protect people from the negative influences of technology and increase certainties in processes which you enter as a neutral party. How do you view the future of your operation in the market? For our company, many opportunities are still opening in the Czech Republic and in Eastern Europe because, from the historical viewpoint, the market in the area of inspec- tions, testing, and certification of products and processes is by far not saturated. With our know-how and wide portfolio of in- struments, we can enter any process and increase the measure of certainty for the client that everything will go as required, in both legal and above-standard aspects. C Z E C H B U S I N E S S A N D T R A D E Photo:TÜVSÜDarchives

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KNOW WHAT THE LATEST TREND IS? TRAVELLING WITH VIP SERVICE We spoke with Ms. Simona Svobodova, Director of Corporate Care and VIP Service at Prague Airport, about how to make travelling more pleasant, with no waits at check-in or security control. Waiting for check-in, customs control... not the most fun you\'ll have when flying abroad. If you don\'t like formalities and would rather keep them at arm\'s length, take advantage of Prague Airport\'s individualised, fast check-in, along with privacy and comfort in the oasis of quiet called Club CONTINENTAL. From the very outset of your trip, you can travel in luxury and be picked up and brought to the airport directly in a chauffeur-driven Skoda Limousine. VIP Service includes spending time in your lovely lounges. What does that mean for travellers? In brief, it means passenger comfort, convenience, privacy, and stress-free flying. There\'s almost nothing that passengers using the VIP Service Club CONTINENTAL need to do at the airport. We take care of all the necessary pre-departure formalities while the traveller enjoys comfort, convenience, and refreshment in the luxury environment of our lounges. Our services also include four days\' free-of-charge parking in the VIP parking lot (for departures and arrivals) or the use of our Skoda Limousine Service. And what does passenger check-in involve under the programme? Passengers using our services don\'t have to go to the check-in counters in the terminals, but rather come straight to us. The VIP Service includes quick, private check-in not only of the passenger, but also the passenger\'s luggage, as well as independent security checks before leaving for the aircraft. We also take our clients directly to the aircraft via apron and they will board separately. When they fly back in, they get the same treatment. After the aircraft has landed at Prague Airport, a car is waiting to take them directly to the Club CONTINENTAL, where their luggage will also be brought. Who makes the most use of your services? Anyone who values time and who appreciates privacy and quiet can make use of our services. We also take care of children in our children\'s play area, so the passenger doesn\'t have to watch over them. Our services, I assure you, aren\'t just used by celebrities and business people. They\'re used by hundreds of modern passengers, including families with children. Save time, get pampered and enjoy comfort when flying on holiday or on business trips. CONTACT: VIP Service Prague Airport K Letišti 6/1019 160 08 Prague 6 Czech Republic +420 220 114 490 vip.service@prg.aero

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1 3 | In an interview with Ms Ludmila Hlavsová, Director of ATL CZ s.r.o., logistic company, our editor introduces to the readers of our magazine ATL CZ s.r.o, which has been operating on the forwarding and logistics market, especially in Europe, Russia and the CIS states, for more than 15 years. East-West International Forwarding with Links to Russia, or 15 Years of ATL CZ s.r.o Can you briefly introduce your company to our readers? What is your core business and how long have you been present on the market? The core business of ATL CZ s.r.o. is the provision of freight forwarding services be- tween Europe and Russia and the countries of the former Soviet Union, both in import and export trading. We can also provide in- ternational transportation to and from any state worldwide. ATL started its business in St Petersburg in 1995 and at the same time opened a subsidiary in the Czech Republic, in Hradec Králové. The main reason for set- ting up a subsidiary in the Czech Republic was the expansion of freight services toWest Europe. In addition to the CR, ATL is also rep- resented in other European states and has a network of subsidiaries throughout the Russian Federation. At the same time, our company is one of the largest logistics op- erators in Russia. During the 15 years of its presence in the logistic market, we have cre- ated an efficient, dynamic company capa- ble of tackling even the most complicated logistic tasks. Confirmation of this is the large number of satisfied stable clients we have, such as Kimberly Clark, Ontex, Reckitt Benckiser, Rockwool, and many others. What is the competitive advantage of your company in comparison with other firms in the branch? The ATL network of subsidiaries in Russia ensures customers, especially those from West Europe, freight transportation services not only to Russia, but also through the en- tire territory of Russia and the CIS countries. Currently we undertake freight deliveries to Russia, as well as to Kazakhstan and Turkmenistan, by rail. At the beginning of June, with the help of our trading partner, we dispatched our first train from the Czech Republic to Russia. Our firm offers the plan- ning of alternative routes, by rail, road, and sea, for different kinds of freight, for the customer to choose the economically most advantageous mode of transport for their specific case. Thanks to our co-operation with container companies, port forwarders and terminals, ATL CZ s. r. o. is prepared to offer its customers the full range of ”door-to- door“ services, including assistance in clear- ing consignments in Russia ATL is one of the few companies offering glassware transportation across Russia by road. For this service we have our own spe- cial fleet of transportation trucks. In addition, we offer the services of our collection line in the direction to Russia and can forward also extra-large cargoes. Another important competitive advan- tage of ATL CZ is quality, certified to conform to the ISO 9001:2000 standard. The grant- ing of the certificate became an important landmark in the history of ATL s.r.o. Informa- tion about the range of services provided by our company can be found on our websites (www.atl.cz). What future aims have you set for yourselves? What are you doing to attain them? ATL CZ s.r.o. sees its future primarily in ensuring high quality, i.e. in having an individual approach to customers, in expanding its activities in the logistics market especially by offering its expert knowledge in the area of West-East co- operation and in the supply of top quality logistic services in the framework of 3PL and 4PL logistics. We want to maintain our high standard also by continuously train- ing our employees, both as regards their command of foreign languages and their transport skills, computer literacy, qual- ity, psychology, etc. For the training and education of its employees ATL CZ s.r.o. obtained a financial grant from EU funds within the framework of the Human Re- sources and Employment Programme, which is a prerequisite of the further pro- fessional growth of all its employees. ATL is not only a logistics service provider, but also a long-term partner of the largest European and Russian companies. C Z E C H B U S I N E S S A N D T R A D E Photo:www.sxc.hu

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| 1 4 S E R V I C E S In the Czech Republic, as in most of Europe, optimism has prevailed on the logistic market. Demand for logistic operations is growing and the market is increasingly focused on quality. To learn about the current situation in logistics, we ap- proached Mr Jan Polter, Chairman of the Logistics Club of the For- warding and Logistics Association of the Czech Republic and Sales and Marketing Manager of Dachser Czech Republic. European Logistic Know-how Has Its Centre in the Czech Republic What is the effect of the changing econ- omic situation on logistics? Logistics, like other sectors, had to cope with the economic crisis and its aftermaths. The decline in demand for consumer goods had its impact on the demand for logistic ser- vices. On the other hand, the slump cleared the market and placed new demands on logistic service suppliers, which has actu- ally resulted in optimisation and cost sav- ing. Forwarding and logistic firms came to feel the pressure to reduce the price of their services. 2008 and 2009 were particularly difficult years. As with all crises, this one, too, had its positive effect. Companies re-organ- ised their supply chains and moved their manufacturing and warehousing facilities further East. The Czech Republic was one of the countries to profit from this. A revival of the logistic market could be observed al- ready in 2010, and the trend is also continu- ing this year. How does Czech logistics stand within the framework of the EU? Positively, no doubt. European logistic know- how has its centre in the Czech Republic and all the important European streams of goods run through our territory. Unlike East Europe, we have a good supply of sufficiently edu- cated people and the credibility of our state is relatively high. All this creates prerequisites for the Czech Republic to become a leading European logistics country. A paradox in this connection is that the Czech Republic itself is not paying adequate attention to logistics, although it is generally known that GDP cor- relates with the development of logistics in the country concerned. In the Czech Republic, however, logistics is not considered a sector matching other important branches in value. What, in your opinion, are the weak and the strong points of our logistics? A strong point is definitely the geographic position of the Czech Republic situated at the crossroads of important routes. As a weak point I could perhaps mention the quality of our infrastructure, which never- theless is still at a level meeting the require- ments of European land transport. As for the supply of logistic services on our market, I think it is fully comparable with European logistic standards. Why do Czech firms not use outsourcing in logistics more widely and about 60% of them prefer having their own logistics departments? For many traditional Czech firms, outsourcing is still an unknown word. Nevertheless the situation is improving each year. People from foreign or global firms coming to the man- agement bodies of companies are bringing a new, rational view on outsourcing. I per- sonally am seeing a great potential for logis- tic service providers among traditional Czech companies, especially in engineering. Can you observe any trends influencing logistic services in the Czech Republic? The pressure being put on optimisation is pushing for IT development, also in logistics. Today,goodqualitylogisticscannotdowith- out sophisticated information technologies. Jan Polter Photo:DachserCzechRepublicarchives,CollierInternationalarchives

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1 5 | C Z E C H B U S I N E S S A N D T R A D E The economic recession, which reached the Czech Republic at the end of 2008, one year later affected a number of sectors, including the industrial and logistic real estate market. Although the year 2010 showed a general decline, it is gratifying to note that the industrial market in that year reported record high results. Industrial Market Reports Record Results for 2010 NEW MAXIMUM VALUES In 2010, demand on the industrial real estate market, which reached its highest-ever level in 2007, set a new maximum value. Thanks to rapid reaction in 2009, the immediate suspen- sion of new construction, and the great flex- ibility and responsiveness on the part of indus- trial park developers towards their tenants, the marketbouncedbackfromthebottomingreat style. Demand for industrial space in 2010 was stimulated by traditional players – companies operating in the area of logistics (40% of total demand), the automotive industry, and both retail and wholesale companies. Market leasing activity, which escalated each quarter, at the end of the year reached a level of nearly 1 mil- lion sq. m. In comparison with the previous years, this amounted to more than a 100% growth year-on-year. The tremendous growth of market leasing activity was mainly due to large contracts of international companies. RETURN OF LARGE COMPANIES Largely responsible for the record demand was the trend initiated in the second half of 2009 by the return of large international companies, whichinconspicuouslybegantomovedelivery and warehousing management facilities to the Czech Republic from their home countries for cost-saving reasons. An important factor was thatthetenantsofindustrialspacedidnotinsist on the re-negotiation of rental terms. Accord- ingtoColliersInternational,68%oftotalrenting activity was accounted for by new rentals, in- cluding expansion, while only 28% involved re- negotiation of old lease contracts. The remain- ing4%involvedthemovingofcompaniesfrom B-class premises to higher-standard spaces. OFFER OF NEW SPACE WAS STAGNANT The immediate suspension of new specula- tive construction, which started in 2009, was equally important. Last year, lessors concen- trated primarily on filling existing vacant spaces and only started new construction on the basis of pre-negotiated future renting. Only 152 000 sq. m were placed on the mar- ket in 2010, with a major part of the space be- ing rented in advance.The largest completed structures included the logistic terminal in Lovosice built by the HB Reavis developer group (43 000 sq. m) and a warehousing hall in the framework of CTPark Ostrava built by CTP Invest (28 000 sq. m). Purely speculative construction was only undertaken by smaller local developers in regions with a very low offer of free industrial space. RENTS REMAINED UNCHANGED In general it can be said that in 2010 rents were stagnant. A moderate growth could only be observed in localities where vacancies were becoming increasingly scarce, especially in West Bohemia, near the D5 motorway. In- dicative rents for spaces under 5 000 sq. m. oscillated between EUR 3.20 and 4.50 per square metre a month, in Prague, tenants had to pay from EUR 3.50 to 4.30 per square metre a month for equivalent spaces. Rent for units over10000sq.m.waslower,rangingbetween EUR 3.10 and 4.20/sq. m/month, depending on whether the space was completed, or yet to be developed. Lessors continued allowing IMPORTANT PLAYERS ON THE MARKET CTP Invest (e.g. CTPark Brno South, CTPark Modřice, CTPark Ostrava and CTPark Pohořelice projects) - www.ctpark.eu/en/ PointPark Properties (e.g.PointPark Prague D1 and PointPark Prague D8 projects) - www.pointparkproperties.com/ ProLogis Czech Republic Management (e.g. ProLogis Park Prague D1 project) Panattoni Europe (e.g. Panattoni Park Prague Airport project) - www.panattoni.com/offices_czech.cfm VGP (e.g. VGP Park Horní Počernice, VGP Park Liberec, VGP Park Olomouc projects) - www.vgpparks.eu

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| 1 6 S E R V I C E S BUSINESS PROPERTY OF THE YEAR The winners of the Business Property of the Year 2009 Competition, organised by CzechInvest Agency, are Incubators and the Scientific and Technical Park of the South Moravian Innovation Centre (www.jic.cz), which create a comprehen- sive infrastructure in support of innova- tive business, CTPark Ostrava (www. ctpark.eu) for renting more than 33 000 sq. m of space to new renters and the FRANTIŠEK Industrial Zone, created by the revitalisation of a black coal mine http://en.hornisucha.cz/industrial-zone- frantisek.html. The results for 2011 will be announced in autumn 2011. their tenants various incentives, the most fre- quent form being rent holidays. THE YEAR 2011: WHAT TRENDS? In the first half of 2011, total leasing activity on the Czech industrial market involved 450 000 sq. m of space. The trend, which began mani- festing itself especially in the second quarter, is the renewed growth of the share of re- negotiated rent terms and conditions of total demand. While, in the first quarter, this type of transaction accounted for only 36% of the to- tal demand, the rest being new leases, in the secondquartertheirproportionexceeded60%. Themostactiveregionintermsofleasingactiv- ity was again, unequivocally, Prague and its en- virons,wheremorethan260000sq.mofspace was rented, followed by South Moravia with 50 000 sq. m andWest Bohemia, together with North Moravia, with nearly 40 000 sq. m each. On the other hand, in the second quarter, net take-up amounted to a mere 98 000 sq. m, the lowest level for the last eight quarters. In 2011, nettake-upsincreased,especiallyduetomanu- facturing companies. Logistic service providers mainly concentrated on the prolongation and re-negotiation of existing lease agreements. Another trend is the growing interest of users in renting older property in regions where the current supply of new, good quality spaces is low or zero, and the users cannot wait months, or even longer, for new construction. SUPPLY OF NEW SPACES In the first half of 2011, the supply of new spaces rose by less than 70 000 sq. m, so that at the end of June 2011 the modern industrial space market in the Czech Republic covered more than 3.8 million sq. m. On the same date, at least 256 000 sq. m. of new industrial spac- es was under construction, especially in the framework of the portfolio of the largest play- ers, the companies VGP, CTP Invest, Panattoni, and ProLogis. Most of those spaces are being developed on the basis of rental commit- ments made in advance. Nevertheless, long- term strong demand has at last encouraged developers to take the first steps in the area of speculative construction. The pioneer in this respect is VGP, which is developing 22 000 sq. m. of halls within its own parks atTuchoměřice, Nýřany, and Hradec Králové on a purely specu- lative basis. An interesting trend is towards rais- ingtheowners’flexibility,asshownbythelead- ing developer, PointPark Properties (P3) group, which offers also short-term flexible renting transactions, attractive to tenants. Simona Černá Associate Director, Industrial Department, Colliers International Czech Republic e-mail: simona.cerna@colliers.com

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| 1 8 Golf has been played in the Czech Republic for over 100 years and its development, particularly recently, has been quite notable. This is one of the reasons why the Czech Republic has been dubbed the“Golf Country”. You can play on courses in towns, in the country or near cha- teaux, castles, or spas. Golf courses, as well as whole resorts provide luxurious relaxation even for the most demanding players. We asked Ms Lenka Vostrá of CzechTourism, an agency for the support of the tourist industry, about the latest trends in this field. Czech Golf Phenomenon Over 100 clubs, over 80 courses, high- quality services... All these are reasons why the Czech Republic is becoming in- creasingly visible on the world golf map. What makes our golf resorts unique? We are certainly exceptional in the number of courses, which present a range of oppor- tunities still unique in Central Europe. Our great advantage also lies in easy accessibility within Europe and, in comparison with West Europe, prices here are still favourable for tourists, not only for golf players. We must not forget the phenomenon of Prague: the fact that, in recent years, new courses have been established in the vicinity and that Prague is now, together with West Bohemia and North Moravia, another full-fledged golf micro-region. Several quality courses in the close proximity of culture, history as well as gastronomy are a great advantage for the development of golf tourism in the area of Prague in the future! The Czech Republic also supports golf players in the “1 fee for 2 players” project. Your CzechTourism Agency is also par- ticipating in it. Vouchers for a discounted game can be used on 39 Czech courses until the end of the year. How successful has this project been abroad? The “1 fee for 2 players” project is an es- tablished product in the Czech lands. It is used in foreign golf destinations, too, and often similar vouchers are given as gifts to subscribers of golf magazines etc. In the Czech Republic, this presents an opportu- nity for trying out a course that you do not know at a good price. The idea to provide a similar service to foreign players, too, had come up in the Golf Tourism Depart- ment of the CzechTourism Agency before I started working here and we distribute a part of the vouchers at foreign events. In connection with the golf catalogue of all the golf courses, we give potential visitors S E R V I C E S Photo:CzechTourism

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1 9 | to the Czech Republic a chance to go and see Czech courses as well. The project is one of the tools for attracting golfers. Whether they come back again is something that depends mainly on the individual golf course and its services. Besides, the project is ad- justed in such a way as not to burden golf courses during the busi- est times when there are commercial tournaments, or when the golf course is reserved for club players. The courses define these conditions themselves, and if they are not interested, they do not have to participate in the project. In recent years, about half of all the Czech golf courses have taken part in the project. You can find out more at www.1fee2golfers.eu/. C Z E C H B U S I N E S S A N D T R A D E GROWTH OF POPULARITY OF GOLF INTHE CZECH REPUBLIC The statement that golf is a synonym for a luxury sport for the rich is no longer valid in the Czech Republic. The increase in the number of players testifies to this fact, which is also supported by the“Play golf, change your life”project (more info at www.hra- jgolfzmenzivot.cz). Thanks to this project under the auspices of the Czech Golf Association, new golfers are given a chance. They can obtain a player’s permit much more easily and cheaply and they can start improving their abilities on selected golf courses. The aim is to increase the number of golfers to 100 000 by 2013 and, by the middle of 2011, to 50 000 players. Local golf courses are not unknown even among the top golf professionals – for example, in one month this year the Czech Republic hosted tournaments of all three of the most significant European professional golf series (the Czech Men’s Open of the PGA European Tour took place in the North Moravian Čeladná from 18th to 21st August, Albatross hosted the Ladies’European Tour from 9th to 11th September, and the European Senior Tour took place at the Casa Serena course near Kutná Hora between 16th and 18th August).

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| 2 0 If we were to compare the quality of Czech golf courses with their quality in neigh- bouring countries, where do we stand? We certainly have many courses of Euro- pean quality. For the development of golf, it is not necessary for all the courses to be of top quality. On the contrary, we con- sider it an advantage that even beginners can find a so-called public course where they can improve their game. Due to the fact that there is no certification for the evaluation of the quality of services here, as there is in Germany, comparison is dif- ficult. Especially from the point of view of golfers, as it is always very subjective. Can you mention some interesting courses that have been built recently? New golf courses include, for example, Golf Park Slapy sv. Jan and Black Bridge Golf Re- sort. Some resorts have been enlarged or at least have added new services to their portfolio (accommodation etc.). Is there room for a significant increase in the number of golf courses in the Czech Republic? The golf business has its peculiarities. The initial investment is in tens, in the case of high-quality courses in hundreds CZECH GOLFING TALENT The most successful player in Czech golfing history turned professional at the end of 2010. 16-year-old Klára Spilková decided to take this step after obtaining full playing rights for the highest European women’s tournament series – the Ladies’EuropeanTour – in Q-School in the 2011 season. At the same time, Klára is the youngest player to have managed to qualify for the LET.The key year in the short, but exceptionally successful career of Klára Spilková was 2009, when she managed to gain titles in the EuropeanYoung Masters, German Boys & Girls Open, International Championship of the Czech Republic, and several other excellent placements. These successes have elevated her to the 9th position in the European women’s amateur golf rankings and, more importantly, have allowed her to participate in the Junior Solheim Cup – i.e. a team match play competition between the USA and Europe. One of the world legends in women’s golf and Captain of the European team, Carin Koch, said this about Klára at the end of the competition:“Klára has got a phenomenal talent and she is a wonderful young girl. I have no doubt that she will soon become one of the leading European professionals.” of millions of Czech crowns. The regular maintenance of the course and actual running costs represent further millions. You should rather ask one of the owners about the return on this investment, but you can trust me that it is a very long- term project. Because of our weather, which is rather an enemy to the develop- ment of golf in the Czech Republic, and because of the fact that the golf season here never lasts the whole year, we will always lose to competition in countries where the climate is more favourable and where golf courses can be used all the year round and thus also have better economic conditions. For this reason, it is not probable that there would be any massive increase in the number of golf courses in the Czech Republic in the near future. At the moment, we rather need to fill the existing courses with golfers. What trends do you expect in golf courses in the future? The future lies in quality services at reason- able prices, both for the managers of courses as well as for the golfers themselves. Golf is one of the few sports which you can really play at any age. Another great advantage is the fact that, in the Czech Republic, approxi- mately 30% of all players are women. There- fore, we have a great potential to attract whole families to the golf courses. I hope that we can handle these facts properly and use them for the benefit of the further de- velopment of golf. S E R V I C E S Photo:KláraSpilkováarchives

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Golf Resort Konopiště was inaugurated on July 20, 2002. Its home region is the Manorial Estate of Tvoršovice, whose history dates back to the 10th century. The last owner, the Bartoň family, used it as a summer residence. Golf Konopiště a.s. entered into the project in 1997 and built up a resort which can be proud of its two 18-hole master courses. These are the Radecky Course bearing the name of one of the former owners, famous Napo- leonic War Marshal Václav Radecky of Radeč, and the D’Este Course named after Archduke Ferdinand d’Este, successor to the Austrian Throne. The courses, advantageously situated in a landscape with slight slopes, are sur- rounded by forest, with various bunkers and numerous water barriers. A charac- teristic feature is especially the great, modelled greens. The 9-hole Public Course is available also to players without a Green Card. The large Driving Range, which includes covered tees and short game areas, is a suit- able place for training. In winter it is possible to use the indoor golf facility. A large territory with training green with grass tee-off areas, a bunker, chipping and putting green are prepared for training. The entire resort was built up in cooperation with the Professional Golfers Asso- ciation of Europe (PGAE). The beautiful, renovated chateau with a clubroom, reception room, pro-shop, as well as a restaurant, is a regular jewel of the resort. An important part of the premises is the “Chateau Hotel” with the possibility of accommodation in luxu- rious apartments and with ideal rooms for conferences and social events. Addi- tional gastronomic services are provided by the“Steak House”restaurant. Welcome to the Golf Resort of Konopiště. We wish you a nice game. Golf Resort Konopiště GolfResort Konopiste One of the most beautiful golf resorts in this country is situated 40 km south of Prague. CONTACT FOR INFORMATION AND BOOKING: GOLF KONOPISTE, A.S. TVORSOVICE 27, 256 01 BENESOV PHONE: +420 317 784 044 FAX: +420 317 784 043 E-MAIL: GCKO@GCKO.CZ WWW.GCKO.CZ

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www.mip.cz Check in your dreams with us attractive environment • prestigious presentation forms • international impact

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2 3 | Tourist industry has had a difficult time, but it is slowly moving to a better period.The data from aTLT benchmark research carried out by KPMG Czech Republic recorded a slight boost in the number of clients using hotel and conference services in 2010. S E R V I C E S Interest in the Czech Republic Is Not Decreasing WHAT MAKES THE CZECH REPUBLIC ATTRACTIVE? 12 UNESCO sites magical castles and chateaux (it is pos- sible to visit more than 200 of them in the Czech Republic) many spa resorts richness and variety of the country (ranging from rocks and mountains to landscape with lakes or vineyards) The Czech Republic is one of the safest countries in the world and can boast of the most favourable indicators for visitors. According to the so-called Global Peace Index, the Czech Republic placed fifth and in the Travel and Tourism Com- petitiveness Index it is sixth out of 139 countries. It is not surprising that most tourists visit Prague. In 2010, over 4.7 mil- lion tourists visited the capital (in the first quarter of 2011, six per cent more tour- ists visited Prague than during the same period last year). Unlike in most of Czech regions, foreign guests in Prague were in great majority and did not stay for very long. The reason is the fact that they want to see mainly the historic centre and not for instance an extensive mountain range, as is the case in other Czech regions. The second most visited place from the point of view of foreigners is South Moravia, es- pecially thanks to the increasing airline connection between Brno and many Euro- pean cities. NOT ONLY THE CHARM OF CZECH SPAS AND MOUNTAINS Traditionally most foreign guests arrive in the Czech Republic from Germany. In the first three months of 2011, 265 thousand Germans came to the country, which is a year-on-year increase of 2.2%. Apart from the capital, the Poles and Germans are at- tracted by Czech skiing resorts. The second most numerous group of foreign tourists are the Russians, there were 113 thousand Rus- sians with a year-on-year increase in arrivals

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| 2 4 S E R V I C E S of 42%. From among the ten countries from which foreign visitors most often arrive, the increase in the number of guests was most significant in visitors from France (by 23.3%), Slovakia (by 14.7%) and the Netherlands (by 12.5%). Conversely, there were fewer guests from Italy and the UK (by 7.4% and 7.3% re- spectively). More and more Czechs set out to discover their home country – in com- parison with 2010, the number increased by 10%. Regions, especially the Ústí nad Labem Region, are more and more in the forefront of interest (more info in the Region section). The Karlovy Vary and Pardubice re- gions known as spa resorts are also still very attractive. The Czech Republic has become a favourite destination for Chinese tourists. Among the visitors who come to the Czech Republic from Asian countries, the share of tourists from China has been growing the most, during the last five years their number has increased fivefold. According to the Czech Statistical Office, 80 thousand Chi- nese visitors came to the Czech Republic in 2010. Among the foreign tourists from Asia who come to the country, the Japanese are still in the lead, though. GOOD QUALITY/PRICE RATIO According to the international server www. hotel.info, where customers can reserve a stay in one of 210 thousand hotels for free, the Czech Republic is the country with the best ratio of quality and price in two- to five-star hotels (the chart was compiled on the basis of over a million reviews). Ac- cording to the KPMG research, the average price of a hotel room in June 2011 was CZK 1.165 (EUR 46.6), which means a year- on-year decrease by CZK 16 (approx. EUR 0.64). According to the research, Prague hotel owners can be the most content. Apart from hotel occupancy in Prague, the average length of stay as well as the price were also growing. According to KPMG, foreign tourists return to Prague in large numbers, in June they made up 91% of all hotel guests. Photo:CzechTourism

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The world of conference technology Hire, installation and operation of professional technology for your: • congress • press conference • presentation • conference • training course • sports and cultural events PROMOPRO, spol. s r.o. Tel.: +420 283 891 660–1 Fax: +420 283 892 757 e-mail: provoz@promopro.cz www.promopro.cz EU–USA Summit, Prague 2009 Momentum Europe, Prague 2008 Dalajlama in Prague, 2008Nurse of the year 2009, Prague Thalia awards 2009, Prague European banking & ﬁnancial forum, Prague 2009

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| 2 6 PRAGUE CONVENTION BUREAU Many of the professional organisers are members of the Prague Convention Bureau. On the website of this associ- ation, you will find links to travel agencies specialising in the management of congress and conference services, as well as contacts for hotels suitable for organising a congress. The Prague Convention Bureau has more than 50 members, who jointly strive to promote the develop- ment of the congress imdustry not only in Prague and are a guarantee of high quality for potential customers. More at : www.pragueconvention.cz Photo:CzechTourism Congress and convention tourism is one of the most significant types of tourism in terms of economic effect. Despite a a slight weakening in the last few months, due to the global crisis to some extent, Czech congress tourism still has a very high growth potential and ranks among the most effective forms of tourism. Czech CongressTourism Has Much to Offer Guests at congresses, conferences, trade fairs, exhibitions and similar events represent very strong purchasing power. On average, they spend up to three times more money than standard tourists. Prague, as a congress destination, was at its best in the middle of the last decade, since then the number of events held in the capital has declined. Even so, it placed 15th in the rank- ing of world congress cities in 2010. In the Central European area, it has been beaten by Budapest, Berlin and Vienna, the latter being the most successful congress desti- nation over the long term. THE MOST CONGRESSES ARE HELD IN PRAGUE According to statistics of the International Congress and Convention Association (ICCA), Prague hosted 86 events in 2010 (with smaller meetings the number was about 1500), which clearly ranks Prague first in the Czech Republic. Its position is unique also compared with other Central European capitals. While Prague’s share within the Czech congress tourism mar- ket is 82.7%, Budapest accounts for 77.7% share in Hungary, Vienna takes 67.8% share in Austria, and Berlin even as little as 28.2 % of German congress tourism. In the world- wide comparison of cities by the number of participants, Prague took 24th place, when 24 182 visitors arrived within congress and convention tourism in 2009. Ten years ago, the average duration of meetings was 4.3 days, but by 2009 the events shortened to an average of 3.8 days. MILD MARKET RECOVERY While at the beginning of 2010 the market did not recover, in the second half of the year,accordingtotheTLTBenchmarkproject of KPMG Czech Republic, the number of events organised per month increased, as did the average number of participants per event and the average duration of events. In 2009, 15.1 convention-type events were held monthly in 2009, in 2010 there were al- ready 15.4 events per month.The slower the growth in the number of events, the more dynamic is the average number of partici- pants per convention – in 2009, 74 persons participated in an event on the average, whereas in 2010 the number was already 88 participants per event. 2 PRESTIGIOUS CONGRESSES The exceptional position of the Czech Re- public is confirmed by its successful bids for hosting two prestigious scientific con- gresses. In August 2012, 3 000 best chem- ists of the world will meet in Prague for the EuCheMS congress, and in 2014 the Czech capital will be the venue of the 18th International Microscopy Congress, where 3 500 scientists are expected to at- tend. In the case of the latter, Prague lit- erally walked over its rivals. It gained an overall majority of votes in the first round and thus beat such strong competitors as Sydney, Beijing, and Istanbul. In 2010, the Czech Republic ranked 28th as a congress and convention host. S E R V I C E S

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FOR OUR GUESTS, WE HAVE PREPARED ACCOMMODATION IN 47 ROOMS (81 BEDS) 14 SINGLE ROOMS 31 DOUBLE ROOMS 1 ROOM WITH THREE BEDS 1 SUITE THE PRICE FOR ACCOMMODATION IN THE VIVALDI HOTEL INCLUDES BUFFET BREAKFAST PARKING IN THE AREA OF THE HOTEL FREE INDOOR POOL IN THE HOTEL WIFI INTERNET ACCESS Rančířov 1, 586 01 Jihlava, Czech Republic, Phone: +420 567 109 711, Fax: +420 567 109 732, E-mail: recepce@hotelvivaldi.cz, www.hotelvivaldi.cz

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| 2 8 W E S U C C E E D The Ritz Carlton Hotel in Hong Kong boasts many superlatives: it is the tallest hotel in the world, with the highest-situated res- taurant, bar and swimming pool in the world. The same applies to the Presiden- tial Suite. Moreover, you can find unique Czech crystal lighting fixtures there. The glass “fireplaces“ in the Lounge & Bar restaurant, ten metres tall, were in- spired by the concept of flowing lava. Crystal chandeliers and modern design lights were produced by a Czech com- pany, Preciosa–Lustry, for the hotel lobby, restaurant, spa, main corridors, and the Presidential Suite. Preciosa had the diffi- cult task of meeting the demands of the discerning owners, as it had to adapt its Photo:Koranarchives Tatra and DAF Plan New Truck TheTatra truck manufacturer has signed a co- operation agreement with DAF Trucks. The new Dutch partner will manufacture engines and cabins for a new line of Tatra vehicles. Both firms also plan to share their dealer net- works in the distribution of new Tatras. The contract gives DAF a 19% stake in Tatra. Tatra expects to reach thousands of new customers and enter new territories with the extended distribution network. “It would take TATRA decades and many millions of euros to build such a wide and successful network of dealers through- out Europe, not to mention the tens or even hundreds of millions of euros which would have been required to develop such Czechs to Participate in Polish Highway Completion Tallest Hotel in the World Boasts Flowing Lava by Czech Glassmakers fixtures to the ideas of three cooperating design firms from Japan (SPIN), Singapore (LTW), and Hong Kong (HBA). Combined with the matching window decorations in the same restaurant, over 100 000 crys- tal components, custom-made for this occasion, have been used for the glass “fireplaces”. Czech glassmakers and designers from Preciosa often supply lighting equipment for large hotels and other constructions all over the world. Their latest contracts in- cluded light fixtures for the New Stage of the Bolshoi Theatre in Moscow and light- ing for the prestigious rooms of the Emir- ates Palace Hotel in Abu Dhabi, one of the two seven-star hotels in the world. Czech Companies in theWorld One of the highway sections between War- saw and Lodz, where the Chinese firm Cov- ec, was dropped some time ago, will now be completed by a consortium including the Czech company Bögl a Krýsl. The value of the contract is about EUR 103.5 million. The section is to be completed in Octo- ber 2012. The A2 highway is to link War- saw with the German border, via Poznan. This year, the Czech company Bögl a Krýsl has succeeded e.g. in a tender for highway construction in Slovakia. It will build a nine-kilometre highway stretch near Levoča with the Slovak Váhostav-SK company. In Poland, it is currently build- ing a bypass around Żyrardów, which is linked to the A1 highway, and a bypass around Jastrzebie. PPF Entering Agro-business in Russia PPF Group N.V. has acquired 100% of the shares of the Russian Voronezh-based agri- cultural holding, RAV Agro-Pro, through the PPF subsidiary Bavella B.V. The RP Capital in- ternational investment fund, which has a 20% share in Bavella B.V., is a co-investor in the transaction. The RAV Agro-Pro Holding is an agricultural enterprise in the“chernozem”soil area of Cen- tral and South Russia. It works in crop produc- tion on 164 500 hectares of land in the regions of Voronezh, Orel, Penza, Rostov-on-Don, and Kursk. The company has major capacities also in livestock production, thus forming the ba- sis for vertical integration in farm production, with a big potential for future growth. Pursuing the strategy of sector diversifica- tion of its business, the PPF Group is thus entering a new segment promising potential growth. Its aim is to make the Russian agro- holding more efficient through the transfer of know-how from an international manage- ment with the knowledge of markets of com- parable size, as well as through basic changes in its processes. Agriculture is a traditional sector of the Rus- sian economy and its development plays an important role in increasing the living stand- ards of the local population.The investment is further proof of PPF’s position as a major for- eign investor in the Russian economy. a world-classcabinandengine”,saidRonald Adams, Tatra’s Chief Executive Officer and Chairman of the Board of Directors, listing the advantages of the new partnership. “We began with the goal of designing a new TATRA vehicle, featuring the latest in- novations of the unique TATRA chassis and applying the state-of-the-art DAF cabins and PACCAR engines. The project has result- ed in a much wider collaboration, one that perfectly cultivates TATRA’s global strategy and, at the same time, adds to DAF’s dealer product portfolio”, Adams added. The new vehicle, designed and built in Kopřivnice, will gradually become TATRA’s flagship product in the commercial seg- ment. It will find use in construction, the mining industry, forestry, in oil and gas pro- duction and other industrial sectors. For funding, the company will make use of products available through PACCAR Fi- nancial Services. Last year Tatra earned CZK 2.575 billion from the sale of trucks, components and services. Total revenues of the Tatra Group, including subsidiaries, amounted to CZK 4.281 billion. Last year, Tatra cut its loss to CZK 105 million. The company won new contracts in Brazil, where it is planning to supply 400 to 1000 vehicles annually. Five hundred more trucks will be supplied to Saudi Arabia.

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F A M I L Y B U S I N E S S long-term cooperation, namely orders from Germany. Thanks to this, the economic situ- ation of the firm improved very rapidly. Later on, I acquired the tool works. Subsequently I also purchased the first numerical control machine, new tools etc. and gradually in- creased the number of new machinery. At the start we produced only simple parts for building machines whose price was more than tempting for our foreign partners. Gradually the production was aimed more at accessories for machine tools, especially clamping heads and other elements. It is a precise production with high demands on the machines, tools and measuring, which demands modern technologies. That is why we substituted the slow grinding process by the highly precise and fast lathe-work.Today we are able to produce one clamping head much faster than the original German pro- ducer, who has a longer experience in the field. At the moment the firm owns 11 CNC machines and employs 27 workers. How have you managed to combine busi- ness and private life? Has family business had an impact on the personal relations in your family? Combining business with personal life was not easy. At the time when I was employed in Germany, my wife had to look after the household and two teenage children alone. My solitude in Germany was the reason why I returned back home and it speeded up the process of establishing my own busi- ness. Overall I can say that it is impossible to achieve anything without the support of my family and a good base. Later on my son, my daughter as well as my son-in-law joined the family firm, too. Winning a position on foreign markets not only within the EU, but also outside it could not have been easy. What has been the decisive element for success? My work experience from the German com- pany helped me the most. I hired employees, I bought tools, I searched for cooperation partners etc. That way I got new contacts. I was also lucky when I met a collet manufac- turerwithwhomwearestillverygoodfriends and for whom I started to produce. He had contacts in other countries which I could also use. Unfortunately, it was not always a good experience – several foreign companies never paid for the parts we manufactured and delivered. However, EU operational pro- grammes providing EU funding were a great help as they have been helping us to pay back loans from 2003 until today. Which moments in the 19 years of the development of the firm were the most difficult and how did you deal with them? The greatest problems have always been related to financing investment intentions. After complicated negotiations with a bank we got a loan for the acquisition of the fac- tory and we financed the older machinery both from our own resources and also with a small bank loan. We gradually invested more money into machinery. Finding work- ers for machine tools was difficult. Often we employed people with a different qualifica- tion and had to teach them everything from scratch stressing high quality of their work. Whenyoulookbackatthepastyears,what doyouseeasyourgreatestsuccesses? The greatest success for me is the fact that after 19 years of its existence, our firm is ca- pable of competing with EU countries. In a short time we managed to catch up and in many aspects overtake many European firms that have been around for much long- er. We have managed to form a stable team of employees. I am glad that in recent years we have been successful also in the field of development. Finally we also have our own product protected by an industrial patent. Why did you decide to establish a com- pany aimed at the production of tools for woodworking machinery and simple ma- chinery parts for construction machinery? Who helped you with setting up the firm at the start and how has the company changed and grown during the years? After the Velvet Revolution I worked in a small engineering firm in Germany (near Passau) as a planning engineer and I gained invaluable practical experience in engineer- ing technology as well as in working for a foreign company. I established my own company KORAN (in Czech it is a blend of the beginning of the word meaning met- al-working and the name of the village of Rankov) in 1992, i.e. after three years work- ing for the German company. I hired a small tool works with six employees which had had very bad economic results. From my previous employer I received an offer for It is Impossible to Achieve Anything without a Good Base An interview with Petr Růžička, owner of KORAN, an all-Czech family firm, about almost 20 years of the development of the firm including the importance of a family base and the participation of other family members in the business. 2 9 |

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Sokolovská uhelná, právní nástupce, a.s. is the largest company in the Karlovy Vary Region. It accounts for about 20% of brown coal production in the Czech Republic, which is extracted by the highly productive method of opencast mining by technological units. Unique technology is applied in the further processing of the brown coal into gas, which is used in a gas- fired combined cycle power plant and for the manufacture of chemical products. In electric power generation, the company has the position of the most important independent electricity producer in the market - approx. 4% of electricity gener- ated in the Czech Republic. The company is a modern, dynamic and transparent firm permanently working to maintain its excellent regional image and relations in symbiosis with its business activities. The activities of Sokolovská uhelná have a direct or indirect effect on the well be- ing and development of the whole Karlovy Vary region. The company’s priority is the philosophy of support in areas which con- tribute to the region’s development, such as educational institutions, health facilities, as well as many cultural and sports events, and this support also helps them in their presentation on the international stage. Notable is also its great commitment to a programme for the elimination of the danger of drugs. Sokolovská uhelná is also engaged in land- scape renewal so that it can be used for education, recreational and sports activi- ties. An example is the recultivation of the former Silvestr dump which was revital- ised into a modern golf complex. These activities include the transformation of former mines into lakes. This was how the “Michal” lake near Sokolov came into being and became a forerunner of many other water recreational areas of this kind. Such as the multi-purpose complex of “Lake Medard” near Habartov which is being prepared. SOKOLOVSKÁ UHELNÁ, právní nástupce, a.s. WWW.SUAS.CZ SOKOLOVSKÁ UHELNÁ, právní nástupce, a.s. Staré náměstí 69, 356 01 Sokolov Czech Republic, phone: +420 352 461 111 e-mail: info@suas.cz ENERGY FOR YOU

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W E S U C C E E D Effective Business versus Operating Costs What, in your opinion, is the main advan- tage of your products and which group of customers are they intended for? The principal part of our production is SW creation and solution implementation, in- cluding the assembly of our own HW, and installation and technical support at the customer’s end. Our software solutions are meant primarily to be an instrument of lean management support. The solutions give a picture of all processes concerning trans- port and logistics in real time, in on-line presentation based on high-quality Navteq map data. The monitoring makes it possible for the fleet management to find their bear- ings in the deluge of information supplied to them concerning the operation of vehicles, machines, handling equipment, work of the staff, asset position, etc., and on the basis of such information optimise processes relating to transport and operation. Its main asset is the comprehensive overview and control of the situation, with resulting cost and time saving. It helps evaluate all information and activities, obtain outputs for statistics (create managerial surveys), thus helping to uncover and eliminate any setbacks within individual processes and improve their planning. The data obtained can be used in accounting and controlling (linked to the IS). Our customers operate in different ar- eas of transport (passenger, freight, special, courier, taxi service, driving schools, etc.), forwarding, logistics, communal and techni- cal services, health care, construction, water management, power and gas industry, raw material extraction and processing, agricul- ture, forestry, trade, and other services. What can your firm offer customers as added value? GX Solutions a.s. places emphasis on last- ing co-operation with the customer, espe- cially in the after-sale period and during the whole time the solution is being used. From the long-term point of view it is economi- cally more advantageous for the customer to invest in a comprehensive solution, which may be more expensive at the beginning, as an initial investment, but which will pay in the long term owing to after-sale care and the possibility of adjusting to the changing conditions in the firm. A characteristic feature of our success is comprehensiveness, which means that we are able to concentrate all the necessary inputs and information in one place, from which the fleet can be controlled much more efficiently. Comprehensiveness also involves after-sale customer care. Our firm has its own supply of products and ex- tensive experience in the area of telematics. In which European states have you suc- ceeded in selling your software prod- ucts and what are your further plans as regards expansion to foreign markets? GX Solutions, a.s. has brought together two stable firms operating in the area of monitor- ing and telematics on domestic markets – the Slovak firm GENETECH spol. s.r.o. and the Czech firm AXITECH, s.r.o. The creation of the firm was a natural outcome of their previous co-operation, supported by the penetration of the trademark to foreign markets. Another reason for the expansion of our activities to foreign countries was the fact that a number of firms have subsidiaries in different EU states and are interlinked in the framework of their activities. We managed to set foot on the Hungarian and Polish markets, where we would like to establish our comprehensive solutions. This year, for example, we partici- pated in theTransport Logistic Fair in Munich, and were pleased to find out that in the area of transport control with communication we are offering solutions comparable with those of our European rivals. We are continuously improving and developing our products and services portfolio. Our editor interviewed Mr Juraj Kozica, Chief Executive Director andVice-Chair- man of the Board of Directors of GX Solutions, a.s., which focuses on the development and sale of transport software solutions.The solutions are designed for fleet, machinery, and logistic operation monitoring.Taking advantage of its 14-year experience in the development of software solutions with the use of the most advanced technologies, it has successfully found its way to foreign markets. Juraj Kozica 3 1 | Photo:GXSolutionsarchives

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| 3 2 Czech “Little Mole” in Outer Space The last mission of Endeavour Space Shuttle has ended. The orbiter, which landed after sixteen days in space, carried the popular Czech cartoon character Krte- cek, Little Mole, on board. For Endeavour, the last mission was its 25th flight. The shuttle thus spent a total of 299 days in space, orbiting the Earth 4 671 times, and K A L E I D O S C O P E Tourists are Returning to the Czech Republic The number of tourists in the Czech Re- public increased in the second quarter of 2011 year-on-year. Czech accommoda- tion facilities registered 8.9% more guests than last year, 13.5% of which being for- eign visitors and 3.4% Czech guests. The highest year-on-year increase of arrivals was recorded in Prague (13.7 %). Tradi- tionally, the largest number were Ger- mans (395 000), 9.4 % more than last year. The second largest group were Russians (158 000), a 50.9% increase year-on-year. A significant increase was also recorded in the numbers of tourists from France and Spain. The services of spa facilities were used by 193 000 guests in the second quarter, a 7.2 % year-on-year increase. Petra Kvitová Wins at Wimbledon Outstripping, at least for a time, even the fame of John Amos Comenius, the“teacher of nations”, who lived in Fulnek in the 16th century, current resident Petra Kvitová has won this year’s Wimbledon tennis tourna- ment, beating Maria Sharapova in the fi- nal. Fulnek, a town of with a population of 6 000 in the Moravia-Silesia Region, which immediately acquired the status of Czech tennis capital, celebrated up to the early hours. And what lies behind her triumph? Her strong will and hard work. Talented Czech Students Increasing numbers of students from the Czech Republic are registering for the Imagine Cup, a worldwide com- petition organised by Microsoft to support projects focused on finding solutions to real-world problems. The GINA navigation system, a finalist in last year’s competition, has assisted rescue teams in Haiti and helped in Japan. The purpose of the competition is always to create projects that will tackle the global issues facing mankind today, and provide solu- tions to aid people in developing countries, disaster relief or medi- cal teams in the treatment of the diseases of civilisation. In the 2011 Imagine Cup, students could com- pete in software design, computer games, video, applications for the new Windows Phone 7, software and hardware interoperability and open- source solutions. This year, as well as last year, Czech students qualified among the best teams in the world. They excel in creativeness, zeal, and competitiveness. covering a distance of almost 200 million kilometres. Little Mole accompanied the five American astronauts and one Italian on their way back from space. The stuffed figure from the children’s cartoon series was taken into space as a mascot by An- drew Feustel, who has relatives in the Czech Republic. Photo:Českásportovní/PavelLebeda;CzechTourim;AmericanCenter,Prague

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3 3 | Capital City of Prague Does Well in Crisis Prague has survived the recent economic crisis almost best of all the European cap- itals and regions. Only Paris and Lisbon fared a little better. This has been discov- ered in a survey by the Dutch TNO insti- tute. In 2009, when the worst crisis since the 1930s struck the hardest, Prague’s gross domestic product dropped by 2.6%, while that of the Czech Republic as a whole went down by 4.1 %. The capi- tal thus fared much better than the rest of the country, and also by Europe-wide comparison. A smaller downturn of 2.3% was recorded only by the French capi- tal, and by the Portuguese capital with a 2.5% decline. Prague’s great advantage, in comparison with other big cities and regions, is its high proportion of work- ing-age population, i.e. people between the ages of 15 and 64. This amounts to almost 81%, the fifth highest proportion on the Continent. C Z E C H B U S I N E S S A N D T R A D E Ban on Sale of Land to Foreigners to Be Lifted The legal ban on the purchase of agricultural land by foreigners will be lifted. The change is contained in a Government Amendment to the Foreign Exchange Act, which has been signed by President Václav Klaus. The Czech Republic negotiated the ban on the sale of land to foreigners upon the country’s accession to the EU seven years ago, and the exemption ceased to be valid at the beginning of May.

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| 3 4 TICO IFC a.s. TICO IFC a.s., Hotel Bellevue – Tlapák, Poděbrady The Czech Republic should have adopted the euro, or rather start working on its adoption, ten years ago. From the position of a businessman involved in incoming tourism, I can see countless advantages in its adoption. It would eliminate foreign ex- change loss and convertibility risks, which S U R V E Y Do youThink the Czech Republic Should Adopt the Euro?When? can have fatal consequences for small and medium-sized enterprises. Hotels provide tour operators with fixed prices for nearly two years in advance. Other advantages would mean a lesser administrative burden, more lucid and transparent accounting and, last but not least, more incoming tourists, as the barrier of currency conversion would be eliminated. This, however, did not happen, and under the current economic situation it would not be an opportune choice to get rid of control over the national currency pol- icy. Moreover, without public support there will also be no political will for the introduc- tion of the euro. Daniel Miller, Director Cyrrus Corporate Finance, a.s. Cyrrus Corporate Finance, a.s., Brno We can see a very specific situation in Eu- rope, all analysts are still discussing if we are in the crisis of trust, transfer crisis, monetary or fiscal unbalance crisis. Who knows? I really don´t think we can adopt euro in the current situation, but we have to be pre- pared. There is still no cost/benefit analysis of adopting the euro in the Czech Repub- lic, in the small open economy focused on export in the very heart of Europe. We are basically destined for common currency. The EU club is currently not a good polished adress for new members. But after 2-3 years this mixed-up club can be as strong as pos- sible. Every crisis made people/firms/na- tions stronger. I am euro positive, but in the horizon of 5-7 years. Jan Procházka, Analyst of the Cyrrus Company and National Economic Council Member REMOSKA s.r.o. REMOSKA s.r.o., Frenštát pod Radhoštěm Producer of Remoska electrical cooking pan, exporter to the United Kingdom Yes, as soon as possible. That is the reply to this question from the exporter position. The exchange rate CZK/EUR influences the price of the products for export. We partly eliminated influence of the exchange rate by that our prices for export are in EUR and payment for materials which we import are in EUR too. But due to falling in the ex- change rate CZK/EUR, the price of product for export is increasing and its selling on the foreign markets is falling too. You can see it on our export. In 2007 and 2008 our export was about 50% of the total selling, in last year it was only about 30% (note: the exchange rate about CZK 27/EUR in 2007, about CZK 24.50/EUR in 2008). And the ne- gotiation about the price incereasing is not really easy! NO, never! That is the reply to this ques- tion from an ordinary citizen, who is up- to-date in current affairs in EU. In the example of Ireland you can see how the adoption of euro affects their present eco- nomic situation … Ivo Svoboda, Trade and Marketing Director Jan Procházka Ivo Svoboda Photo:TomášMalý,archivesIvoSvoboda,TICOIFCarchives,ŠkodaAutoarchives,PhotoCombo Daniel Miller

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3 5 | S T A T I S T I C S Facts and Figures Fuel prices are at all-time highs again in the Czech Republic. At the end of July, the av- erage price of unleaded 95 octane petrol rose to CZK 35.23 (EUR 1.46) per litre. Diesel went up to CZK 34.59 (EUR 1.43) per litre. Euro: Yes, or no? Czech society still mainly rejects the adop- tion of the single European currency – the euro. More than two-thirds of respondents (68%) are opposed to the adoption of the euro by the Czech Republic. About one- fifth of all Czechs (21%) would like to use the euro for payments, and only about 5% of the people questioned are“wholly in fa- vour” of the euro. Prices in the Czech Republic were lower than in many other countries of the Eu- ropean Union last year. According to data published by Eurostat, the price levels of consumer goods and services in the CR were at 72% of the EU average last year. The statistics do not show the levels of income in the different EU countries. The Czech Republic, along with Malta, Estonia, and Slovakia, rank among the group of countries where price levels were 20% to 30% lower than the average of the EU 27. Prices of Goods and Services Prices of Flats The prices of flats for sale dropped by 2% in the Czech Republic in the second quarter of 2011. The Czech Statistical Office (CZSO) announced that prices have decreased by 3.2% in Prague and by 0.9% outside the capital. An analysis of the development in the sale prices of flats shows a continuing price stagnation, which is primarily due to the supply exceeding demand. Fuel Prices New car prices The prices of new cars dropped by 9% in the Czech Republic last year, which was almost the largest decrease in the European Union. More significant decreases only occurred in Slovakia, Bulgaria, and Slovenia, according to the European Commission report. The only countries of the EU 27 where car prices rose last year were Italy, Malta, and Portugal.

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| 3 6 R E G I O N Ústí nad Labem Region: Remarkable and Unique The Ústí nad Labem Region, one of the Czech Republic’s most industri- alised areas, has been the country’s main energy supplier for years. After the phasing out of intensive coal mining in the 1990s and the revitali- sation of the countryside, the Region is regaining its reputation as an area of European significance with unique natural resources. Its efforts to im- prove the environment still further and to revitalise vast new areas is continuing. The centre of the Region is the city of Ústí nad Labem, a transport junction of national and international significance, where im- portant European roads, railway lines, and waterways cross. CHARACTERISTICS OF THE REGION The Ústí nad Labem Region is divided into seven districts (Děčín, Chomutov, Litoměřice, Louny, Most, Teplice, and Ústí nad Labem). In addition, there are four areas in the Region, which differ from each other significantly. One of them is the area in the foothills of the Krušné hory (Ore) Mountains with strongly developed industry, compris- ing the Districts of Chomutov, Most, Teplice, and a part of Ústí nad Labem. The dominant industries there are power generation, coal mining, engineering, the chemical industry, and glassmaking. The next area extends around Litoměřice and Louny and is known for hop cultivation and the growing of vegetables. The Labe and Ohře valleys are famous fruit-growing areas,knownasthe“GardenofBohemia”.The grape varieties grown around Litoměřice are also renowned. In recent years, another area, that around Most, has become a well-known vine-grow- ing district, where vines are cultivated espe- cially on post-mining re-cultivated land. The Krušnéhory(Ore) Mountains area is a sparse- ly populated, mountainous landscape with limited economic activities. The last area to be mentioned is that around Děčín, which has no heavy industry and no agriculture (its northern part around Šluknov is too far away from the centre of the Region, not easily accessible and is a typical periphery area). TRANSPORT The Region has a geographical position with very favourable parameters from the transport point of view, with links to the in- ternational E-road network. The important E 55 international road linking the north and south of Europe, which runs through the Teplice and the Litoměřice Districts, links up at Lovosice with the D 8 motor- way. At the end of 2006, a new section of the D 8 motorway was opened to traf- fic. This passes through the Krušné hory Mountains and links up with the German A 17 motorway. Another important route runs from the Karlovy Vary Region along the Krušné hory Mountains to the northern part of the Lib- erec Region. The road linking the Federal Republic of Germany with Prague and run- ning South via Chomutov and Louny is also of importance. The main railroad is the in- ternational line from the Federal Republic of Germany to Prague via Ústí nad Labem. The Labe River is the most important water- way in the Czech Republic, used to carry cargo to the port of Hamburg in the North Sea. NUTS Area (in sq.km) Population Number of municipalities LAU 1 Děčín 909 135 740 52 LAU 1 Chomutov 935 126 438 44 LAU 1 Litoměřice 1 032 118 040 105 LAU 1 Louny 1 118 87 263 70 LAU 1 Most 467 117 274 26 LAU 1 Teplice 469 129 985 34 LAU 1 Ústí nad Labem 405 121 458 23 NUTS 3-Ústí nad Labem Region 5335 836 128 354 NUTS 1 – Czech Republic 7 196 10 489 183 6 249 Source: Czech Statistical Office (as of 1 January 2010), NUTS – territorial units according to the EU classification, LAU 1 = district) Latest data on the Region Population 31 March 2011 836 128 Gross Salary 1st Q 2011 21 160 CZK (EUR 846) Unemployment 31 July 2011 12.55 % Photo:CzechTourism Liberec Praha České Budějovice Jihlava Brno Zlín Ostrava Olomouc Pardubice Hradec Králové Ústí n/L Karlovy Vary Plzeň SLOVAKIA POLAND AUSTRIA GERMANY Děčín Litoměřice Ústí nad Labem Teplice Most Chomutov Louny

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3 7 | CULTURE, NATURE, LIFE The Ústí nad Labem Region has a number of attractive localities for tourists. The develop- ment of tourism is one of the Region’s prior- ities. The best-known natural attractions of the Region include the Bohemian Switzer- land National Park, covering an area of 7 900 ha, established in 2000, the Bohemian High- lands and the Labe Sandstones protected landscape areas, a part of the Kokořín area and the Lužice Mountains, the lovely path- way along the Labe with Porta Bohemica, the Tiské stěny rock formations, and many others. Numerous cultural sights and monu- ments, such as Terezín and Střekov castle, the Gothic church in Most, the Baroque cha- teau in Duchcov, the monasteries in Osek and Doksany and the chateaux of Ploskov- ice and Libochovice are also very popular. A variety of events are organised for visi- tors at the Litoměřice exhibition ground all the year round. The most popular among these are the “Garden of Bohemia” exhibi- tion for fruit and vegetable growers and consumers and the “My House, My Castle” home furnishing and construction fair. The Region provides a diversity of sporting opportunities and cultural events (theatres, museums, galleries) all the year round. Dur- ing the season, lovers of speed are attracted totheMostAutodrommotorsportracetrack. Children and adults can enjoy summer and water sports in Aqua Park, while horse lovers and racing fans can spend their time in the Hippodrome in Most. Modern sporting and recreation grounds, cycle paths, golf courses and children’s playgrounds have arisen on the Region’s recultivated ground. THE ELBE/LABE EURO-REGION The Elbe/Labe Euro-Region is an area in the Bohemian-German boundary district in the South-East of the Federal Republic of Germany (Saxony Free State, Dresden 1 Regional Directorate) and the North of the Czech Republic (part of the Ústí nad Labem Region). In the West, the Elbe/Labe Euro-Region borders on the Ore Mountains Euro-Region and, in the East, on the Nisa- Nysa-Neisse Euro-Region. On the Bohe- mian side, the Region comprises the towns and villages of the Districts of Litoměřice, Ústí nad Labem, Teplice, and Děčín (a part) and, on the Saxon side, the districts of Saxon Switzerland, Weisseritzkreis and the state capital of Dresden. The aim of the Elbe/Labe Euro-Region is to promote mutual confidence and the support of cross-border co-operation in all walks of social life. Communication and contention between the two nations has a history going back many centuries. The Euro-Region is a member of the Association of European Border Regions (AEBR). It as- sociates about 90 cross-border regions and five larger territories. More at www.eurore- gion-elbe-labe.eu. DISTRICTS Děčín District The geographical position of the Děčín Dis- trict is unique in the framework of the whole of the Czech Republic, as it combines the Dis- trict’seconomicallyadvantageousconditions, arising from the existence of an important transport junction in the vicinity of the bor- der and the proximity and easy accessibility of large centres on both sides of the border, with the District’s beautiful natural environ- ment unique in all Central Europe in extent and character. More at www.mmdecin.cz Chomutov District The Chomutov District is situated in the foothills of the Krušné hory Mountains, INTERESTING FEATURES OF THE REGION TOWER WITH THE GREATEST INCLINATION The Gothic Church of the Assumption of the Blessed Virgin Mary in the centre of the town of Most prides itself on the tower with the greatest inclination in Central Europe. It is 65 metres tall and its inclination towards the perpendicular is a full 198 centimetres. The leaning tower is the result of the April 1945 Allied bombing, when three bombs which were dropped exploded in the close vicinity of the church, the blast affecting the statics of the structure. THE LONGEST MOTORWAY TUNNEL IN THE CZECH REPUBLIC The D8 motorway blasted its way through the Krušné hory Mountains massif, when the two- kilometre long Panenská Tunnel was constructed there. This technically demanding structure was opened to traffic in 2006 as the third and, at the same time, the longest motorway tunnel in the Czech Republic. The Panenská Tunnel need not fear losing its primacy of length even in future, as no other tunnels of such a length are being planned.

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| 3 8 R E G I O N a range forming the border with Germany. It is rich in raw materials, which are extracted and used for power generation. A large part of the social and technical infrastructure is concentrated in this District. For decades, the Chomutov District has been known as the centre of heavy industry, power engi- neering, metallurgy, and brown coal min- ing. Now, foreign investors are arriving to conduct activities in the traditional sectors of industry, or are starting up new activities. More at www.chomutov-mesto.cz Litoměřice District As 72% of the District’s surface area com- prise farmland, the main economic activi- ties include vegetable and fruit growing, hop cultivation, and vine growing. The importance of these activities is reflected in the naming of the Litoměřice District as the“Garden of Bohemia”and the holding of exhibitions of the same name in Litoměřice each year (www.zahrada.cech.cz), attract- ing visitors from far and wide. From the point of view of broader transport links, the District is an important corridor for inter- national and national transport, especially in the direction of Hamburg–Berlin–Dres- den–Prague–Brno–Vienna–Budapest. More at www.litomerice.cz. Louny District Great changes have taken place in the Dis- trict’s economy over the past decade. Agri- culture is an important economic sector in the District, specialising in the production of cereals, oleaginous crops, meat, and eggs. Hop cultivation and fruit growing play a sig- nificant role. The large number of cultural and historical monuments in the Louny Dis- trict is evidence of its important past. Ar- chaeological finds testify to the existence of settlements there as far back as the Later Stone Age. More at www.mulouny.cz. Most District The centre of the District is occupied by the Most Brown Coal Basin. The immense wealth of the District’s mineral deposits has pre-determined its character and economic importance. The characteristic feature of the District is the high proportion of surface area covered by industrial structures. Most strong- ly represented industries in the District are mining, petrochemistry, the power industry, and engineering. More at www.mumost.cz. Teplice District The town of Teplice is a historically impor- tant industrial and manufacturing centre. Numerous medium-sized and hundreds of small private manufacturing and trad- ing companies came into being there in the 1990s, changing the former one-sided orientation of the city, which specialised mainly in ceramic production and glass- making. However, glassmaking still plays an important role in the town. Balneology is a sector which continues to be of great im- portance to the economy of the District.The curative mineral springs of LázněTeplice spa are among the best-known and intensively used in Central Europe. In olden times, Tep- lice was termed the “Salon of Europe”. More at www.teplice.cz. Ústí nad Labem District ThemajorityoftheDistrict’spopulation(80%) live in the regional city of Ústí nad Labem. The chemical industry is a key sector, which has taken advantage of the geographical po- sition of the city and its excellent transport facilities. More at www.mag-ul.cz. IMPORTANT FIRMS IN THE REGION The most important employers in the Ústí nad Labem Region include the Mostecká uhelná společnost and Severočeské doly mining companies, the Chemopetrol chemical firm and the Krajská zdravotní a.s. regional healthcare company, which affiliates hospitals in Děčín, Ústí nad Labem, Teplice, Most and Chomutov. Other important firms based in the Region can be found on the websites of the Ústí nad Labem District Economic Chamber at www. ohk-ul.cz and the website http://axis4.komora.cz/Default.aspx?oblast=m282&jazyk=en). USEFUL INFORMATION: North Bohemian Association of Commu- nities: www.seso.cz Regional Development Agency of the Ústí nad Labem Region: www.rra.cz Severalofficerentingopportunitiesare currentlyavailableintheÚstínadLabem Region.InClassA,thereistheCPICityCen- tremultifunctioncompound,thedominant partofwhichistheadministrationbuilding withshoppingfacilitiesanda4-star congresshotelnearby.Thecompoundbe- longingtotheCPIGroupissituatedinthe closevicinityofthecitycentreandiseasily availablebybothpublictransportandcar. Office Market in the Region The administration building, occupying an area of 5 500 sq. m, offers representative of- fice space of the highest quality. About 20% of the space is the subject of advanced nego- tiations with potential tenants, the remaining 80% are still awaiting enquiries. In the case of greater demand for this category of office space, potential tenants may be satisfied af- ter the completion of possible Phase II of this project. Rent for the highest-quality space os- cillates between EUR 9 and 10/sq. m./month. In addition, there is about 2 000 sq. m of vacant office space of a lower standard in Class B in Ústí nad Labem. The offices are situated in the central part of the city and are available at EUR 7-8/sq. m/month. Class C office space, intended for less demanding users, can be rented at around EUR 4/sq. m/ month. Such a category of office space can currently offer over 5 000 sq. m. The city is fully prepared for new foreign investors who may choose the Ústí nad Labem Region as their future base, taking advantage of the good supply of labour of- fered by the Region. More at www.colliers-industrial.cz, e-mail: simona.cerna@colliers.com.

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Region Full of Investment Opportunities The Region’s traditional industries are engi- neering and the chemical industry. There are several secondary vocational schools in the Region, which ensure an adequate supply of skilled labour for local enterprises. In addition, Ústí nad Labem is also an important centre of advanced education, led by the Jan Evange- lista Purkyně University. JOSEPH STRATEGIC INDUSTRIAL PARK The Ústí nad Labem Region has a lot to offer toinvestors,includingstrategicindustrialparks (SIP). One of them is the Joseph SIP, located in Havraň, Most District, some 8 km from the city of Most with a population of 67 500. The Park was developed in 2002 specifically for the Mexican investor, Nemak Czech Republic s.r.o. Being a“strategic”industrial park means that it is prepared for the location of a large investor requiring vast space and has the capacity for civil engineering networks. The Joseph SIP covers an area of 175 ha, of which currently 63 ha of unoccupied space can be offered to investors. In 2004 the Joseph SIP was granted the status of an accredited in- dustrial park. This accreditation is awarded by CzechInvestAgencyandtheMinistryofIndus- try and Trade of the Czech Republic. The cer- tification is a guarantee to investors that the park meets the technical preparedness stand- ards set by CzechInvest. In 2007, Joseph Park placed first in the Business Real Property of the Year Competition in the category of“Park gen- erating the highest economic benefit.” The owner of the Joseph SIP is the City of Most. For investors, this is a guarantee of solid negotiations. In 2010, the City of Most was awarded the ISO 9001 Quality Management System Certificate, which is another guarantee of professional dealing with inves- torsbytheJosephSIPmanagement.Thecom- panies located in the Joseph SIP and pursuing business activities there are Nemak Czech Re- public, s.r.o., Starcam, s.r.o., RAI Most, s.r.o., and AFSI Europe, s.r.o. TRIANGLE STRATEGIC INDUSTRIAL PARK TheTriangle Strategic Industrial Park is located in an area whose boundaries overlap three districts – Chomutov, Most, and Louny. It is situated on the site of the former Žatec Air- port in a location easily reached by road. The locality adjoins the Prague–Chomutov–Hora Sv. Šebestiána/Reitzenhain, Germany express- way, which crosses the I/27 Most–Žatec–Plzeň Class 1 road in close proximity to the park. The industrial park covers an area of 365 ha, of which 295 ha are open for use by investors. One of the companies to have its produc- tion facilities in the park is Panasonic Liquid Crystal Display Czech, s.r.o. (former IPS Alpha Technology Europe, s.r.o.), which manu- factures LCD displays. In 2010, the Ústí nad Labem regional authority signed a contract with Solar Turbines, a subsidiary of Caterpillar, which is planning to repair gas turbines in the park, starting in 2012. At the end of 2010, the Ústí regional authority signed a contract with Panattoni,whichintendstobuilda plantinthe industrial park to manufacture plastic parts for car dashboards. Another would-be investor is Gestamp, a Spanish company which is plan- ning to build a factory in the industrial park to manufacture pressed steel products for the automotive industry. Other industrial parks are to be found in Kadaň,Chomutov,Rumburk,andKlášterecnad Ohří. For investors preferring already existing facilities, the Region can offer a large number of unused industrial and commercial spaces. CZECHINVEST OFFERS HELP When entering the Czech Republic, foreign investors may find it useful to have the proc- ess of realising their projects shortened with the help of CzechInvest Agency. The Agency will introduce the investors to the investment, political, and cultural environ- ment in the Czech Republic and acquaint them with the legislation, tax regulations, personnel and other matters linked with the realisation of the planned project. The only thing left for them to do is to pick what they need from the database, which comprises industrial parks, industrial halls, rooms for scientific and research work, office space and brownfields. CzechInvest also helps investors in the fi- nancing of their projects, in particular with applications for obtaining money from EU funds. Thanks to the Business and Innovation Operational Programme, investors can ob- tain money for Research and Development, the introduction of information and commu- nication technologies and their own training centres. Another form of support are the in- vestment incentives, such as tax reliefs, good prices for land in strategic industrial parks and training and requalification grants. In ad- dition, the Agency mediates contacts with subcontractors on behalf of investors. Moreinformationatwww.czechinvest.org. 3 9 | TheÚstínadLabemRegionholdsgreat alluretoforeigninvestors.Since1993, CzechInvestAgencyhasmediated185 foreigninvestmentprojectslocatedin theRegion.IncomparisonwiththeCzech Republic’s13otherregions,theÚstí Regionranksfourthintermsofforeign investmentprojects.However,interms ofthevolumeofinvestments,theRegion rankssecond,withnearlyCZK117billion (EUR4.7billion)worthofinvestments. SURVEY OFTHE MOST IMPORTANT INDUSTRIAL PARKS TRIANGLE STRATEGIC INDUSTRIAL PARK Size of park: 364.36 ha Size of surface area prepared for investors: 295.00 ha Number of investors using the park: 3 JOSEPH INDUSTRIAL PARK Size of park: 320.00 ha Size of surface area prepared for investors: 63.30 ha Number of investors using the park: 3 RUMBURK INDUSTRIAL PARK Size of park: 36.54 ha Size of surface area prepared for investors: 23.04 ha Number of investors using the park: 1 VERNE – KLÁŠTEREC NAD OHŘÍ INDUSTRIAL PARK Size of park: 155.40 ha Size of surface area prepared for investors: 60.00 ha Number of investors using the park: 17 NOVÉ SPOŘICE, CHOMUTOV INDUSTRIAL PARK Size of park: 22.00 ha Size of surface area prepared for investors: 14.00 ha Number of investors using the park: 1 ALPKA – PODBOŘANY INDUSTRIAL PARK Size of park: 40.00 ha Size of surface area prepared for investors: 36.00 ha Number of investors using the park: 5 LOVOSICE CUKROVAR INDUSTRIAL PARK Size of park: 11.27 ha Size of surface area prepared for investors: 11.27 ha Number of investors using the park: 2 C Z E C H B U S I N E S S A N D T R A D E

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| 4 0 A N N I V E R S A R Y Twenty Years in Control Systems and Automation In an interview with Mr Pavel Rotter, owner of the NEWTE company, we are reviewing the history and successes of the firm during its 20-year exist- ence.The main activities of NEWTE are focused on the areas of control of industrial machines and tech- nologies, implementation of control systems, development and produc- tion of components for automation (electric switchboards, single-purpose machinery, electronic modules), and the creation of application software for PLC and microcomputers. Your company will mark the 20th an- niversary of its founding this year. What was the focus of its activity and the idea about its development strategy at the beginning? NEWTE spol. s r. o. was established as the successor to an association of several small firms whose owners had been former em- ployees of development workshops of the Food Industry Machinery Works, that had been closed down. At that time, some of our customers told us that they would prefer another legal form of our business than that under the Trades Act (especially for bigger contracts), and this is why we set up the lim- ited liability company in 1991. At that time we had no precise development strategy, little experience, and actually no one to consult with on how to solve problems. Most companies with a similar focus in the Czech Republic were also just starting their activities. We tried to work as best as we could, with the use of modern components that were still difficult to get at that time. The initial period was very hectic and many things had to be dealt with very quickly. You have a brother – a twin, who is helping you with business and the company’s de- velopment. Is your cooperation going well? We founded NEWTE jointly with my broth- er in 1991. He had not cooperated with us before, because he had worked under a contract for his previous employer. I must say this was a very good step. We actually complement each other well, while I am in charge of design, operative management, practical implementation of contracts and cooperation control, my brother supervises software creation, the affairs related to busi- ness contracts, communication with the au- thorities, and in-house stock-taking. We can say that our long-time cooperation is very good and practically collision-free. When did you start your own develop- ment of machines and electronic modules for automation and the creation of soft- ware for PLC and microcomputers? How successful were you in foreign markets? We were engaged in these activities already in the small businesses group. After the establishment of NEWTE, we supplied our products and services at first only on the domestic market. The supplies mainly con- sisted of customised electronics and electric switchboards for control systems and appli- cation software. Step by step we improved our products to make them competitive in foreign markets. Fifteen or twenty years ago we did not know how to export our goods and sell them abroad. It was only in about 2000 that we started to sell some of our products and services in foreign coun- tries where they were requested, at first by means of commercial firms. Even today, the backbone of our activities is formed by the Stresstter and Striatter devices, which have received several innovations. Stresst- ter, a device for measuring flat stress in glass sheets, and Striatter, which displays inhomogeneities, are modern appliances constructed from light and sturdy materials such as aluminium alloys. The light-emitting element used in the optical measuring sets is LED diodes, which guarantee a long serv- ice life and low power requirement. These appliances are in operation not only in the Czech Republic, but all over the world, e.g. Belgium, France, the Netherlands, Germany, Russia, the South African Republic, India, South Korea, and also Mexico. Are your machines and electronic modules designed for universal use in companies with various production spe- cialisations or do you customise them for the particular users? Basically, I can say that there is a number of products especially in our electronics out- put which are universal, but they make up a minimal share of our earnings. Most of the equipment, electric switchboards, control systems and machines are custom made to suit the requirements of our clients. Our clients are wide ranging and we have orders from various sectors, e.g. the glass industry, metal packaging, transport systems, car making, and gas industries. Custom-made work has advantages, as well as risks. De- spite that, it is very interesting. Are you satisfied with the success you have achieved in business in the past 20 years? Yes, we are. As a small company which came into being in very modest conditions, we have gone a long way. And there is still a lot of work ahead of us for our customers, and we are looking forward to it! Photo:Newtearchives One of the latest models of the Stresstter 6 equipment, after installation at a French customer, INTERPANE GLASS FRANCE S.A.S.

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The First Scientific and Technical Park in the Ústí nad Labem Region Opens in Rumburk 4 1 | C Z E C H B U S I N E S S A N D T R A D E A scientific and technical park opened in Rumburk in 2010. Its con- struction cost nearly CZK 100 million (approx. EUR 4 million). A run-down compound in the centre of the city was turned into a business incubator, two out of three historical buildings underwent extensive reconstruction and a completely new building rose in the place of the third. As the park is situated in the city centre, it will serve primarily lighter industry sectors, such as optical mechanics and renewable energy sources. An important place is reserved there for stomatology: “Modern stomatology is ex- periencing a great boom, with new revolu- tionary technologies appearing each year.The current trend is towards non-invasive, pain- less and aesthetic stomatology. We co- operate with the park on one research project targeted at improving bio-compatible dental implants based on the use of nanotechno- logies. We have an ambitious common aim – to make the scientific and technical park the centre of progress in stomatology, in both the national and European context,” says Tomáš Košumberský, President of the Czech Stoma- tological Academy, based in Rumburk. OPTICIANS The park has provided shelter for research workers of Dioptra, the optical firm which has been making optical elements of every type in nearby Turnov for more than a century. In Rumburktheyaredevelopingandtestingthe properties of different coatings. The firm is working on several interesting projects. One of them is a high-quality anti-reflective coat- ing system (BBAR). Currently the researchers are testing a newly developed edge-filter, which lets through only a certain part of the visible range of the spectrum, while the rest of the spectrum is reflected. They are also testing cold mirrors, which let through infra- red rays and reflect visible light. AID FROM BRUSSELS The Rumburk Scientific and Technical Park has obtained a grant from the EU Prosperity Programme, which was part of the Industry and Business Operational Programme. Theirs was the only successful project in the Ústí Region to benefit from that programme. The park serves as an umbrella for the business incubator, the innovation centre and the technology transfer centre. In the years 2004- 2006, altogether 32 scientific and technical parks, innovation centres, business incuba- tors and other such facilities obtained sup- port from the Prosperity Programme. More at www.pc-vtp-rumburk.cz; information about free spaces and prices can be obtained from sedlar@pc-vtp-rumburk.cz. InApril2011,Kyocera,aJapanesecom- pany,startedtheconstructionofasecond hallforsolarpanelconstructioninthe industrialparkinKadaň,withtheaimof raisingitsproductioncapacity.Kyocera GroupisplanningtoinvestmorethanCZK 700million(approx.EUR28million)in theproject.Thenewhall,withacapacity of360MW,istobecompletedinthe autumnofthisyear.Thefirmisplanning toadd400jobstotheexisting600.With itsoutputof560MW,theCzechplantwill bethelargestwithintheKyoceraGroup. Solar Panels from Kadaň Aiming at the Whole of Europe “We are viewing very positively Kyocera’s decision to enlarge its production facility in Kadaň. The aim of CzechInvest Agency is not only to attract foreign investors to the Czech Republic,butalsotomakethemstayhereand to create the appropriate conditions for them to facilitate expansion. This is exactly what has happened. For the Ústí nad Labem Region, affected heavily by unemployment, the construction of a new production hall is a great benefit,” says Miroslav Křížek, General Manager of CzechInvest Agency. SPECIALIST IN PHOTOVOLTAIC PANEL PRODUCTION The new hall will be situated next to the exist- ing works, which already began production in the Czech Republic in 2005. The Kadaň works suppliesitssolarpanelstothewholeofEurope, the largest world solar energy market. Besides theCzechRepublic,Kyoceraalsohasmanufac- turing plants in Japan, China, Mexico, and the United States of America. “In Kadaň we only manufacture photovoltaic panels. Services for end-user customers are provided by Kyocera in Germany and our distribution partners. Our target is not only the domestic market, but in- deed all of Europe, including Germany, Spain, and Italy, which are among the largest buyers of solar panels,”explains Michal Vafka, Produc- tion Manager of the Kadaň works. RECRUITING SPECIALISTS The increased production of the Japanese concern in the Czech Republic is accompa- nied by a growing demand for specialists. “We are among the largest employers in the Region, but are not the only industrially spe- cialised firm here. Therefore, it might happen that when we open the new production hall, we will be faced with a shortage of specialists,” Vafka notes. To avoid this, Kyocera, from the startofthenewconstruction,hasbeenrecruit- ing workers, who will need to be thoroughly trained before starting work in the new plant. The Kyocera Group Concern came into being as far back as 1959. It offers custom- ers all kinds of services and products, from multifunctional equipment, solar cells and modules, to ceramic knives. In the Czech Republic it manufactures solar modules with the use of polycrystalline silicon cells. Monocrystalline or polycrystalline silicon technology is currently used in the produc- tion of about 85% of solar panel output. Moreatwww.czechinvest.org,www.kyocera.de

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| 4 2 R E G I O N Comprehensive University with Great Potential The institution bears the name of Jan Evan- gelista Purkyně, who was born in the North Bohemian town of Libochovice (1787-1869) and who was one of the founders of Biology, Embryology, Histology, modern Pharmacolo- gy, comparative Anatomy and Anthropology and one of the most important figures in glo- bal Physiology.Today this is a comprehensive university with tremendous future potential. INTERNATIONALISATION One of the undeniable assets of the Univer- sity is that it is a classical type of university, with both traditional university faculties, such as the Philosophical, Natural Science, Educational and Social and Economic Fac- ulties, and non-traditional, but very much needed faculties, such as the Faculty of the Environment, Faculty of ProductionTechnol- ogies and Management, Faculty of Art and Design and the Institute of Health Studies. One of the University’s priorities and strong points is internationalisation. Hundreds of its students have had the opportunity to study for one or more terms at dozens of universities in Europe and overseas (up to one-fifth of its graduates obtained a part of their education at universities abroad and, at the end of 2010, the University co-operated with 28 foreign in- stitutionsofhigherlearning).Atthesametime, the University’s prestige is increasing with the growing number of foreign students studying in Ústí. In 2010, 200 foreign students from 33 countries were enrolled at the University. The most popular courses included Commercial Russian and Czech Language for Foreigners at the Faculty of Social and Economic Studies and Photography at the Faculty of Art and De- sign. Courses in Political Science at the Philo- sophical Faculty and Company Economics at the Socio-Economic Faculty are also popular. LINKING THEORETICAL STUDIES WITH PRACTICE A strong linkage of study courses with prac- tice is another priority of all the University fac- ulties and the UJEP Institute. The main bridge between study and practice are the Bachelor and Diploma theses, based on the needs of companies, small and medium-sized firms, andgovernmentandnon-governmentalinsti- tutions and organisations. As an example, we mention the Bachelor thesis by Patrik Lukáč, graduate of the Faculty of Production Tech- nologies and Management, which in 2010 won the award of the City of Teplice. The the- sis is in actual fact a project for AGC Flat Glass Czech, a.s., Division Řetenice, to utilise waste heat leaking from the melting unit to gener- ate power. The University also co-operates actively with a number of manufacturing en- terprisesandinvestors,healthcarefacilities,the state administration, art institutions, etc. JEPU’s largest partners include the mining company, Severočeské doly, a.s. Chomutov, Škoda Auto, a.s., AGC Flat Glass Czech a.s., member of AGC Group, Český porcelán, a.s., ČEZ Distribuce, a.s., ČSOB, a.s., Granette, a.s., Asian Industry Czech, s.r.o., ALCAN Děčín Extrusions, s.r.o., ArcelorMit- tal, s.r.o., Black&Decker, s.r.o., Donaldson Indus- trial CR – koncern s.r.o. MODERNISATION The University is also naturally thinking about the future and its future development. Evi- dence of this is the construction of the Uni- versity campus, which began in 2003. It is to be situated in the centre of Ústí nad Labem. In June 2011, construction work started on its enlargement with the laying of the foun- dation stone. The compound will comprise a Multifunctional Education and Information Centre (MFC), which will become the core of the UniversityVillage. It will house education- al facilities, auditoria, the Rector’s office and the Administration Department, the Univer- sity Lifelong Education Centre, the Informat- ics Centre, and the Library. INTERESTING PROJECTS The University is actively involved in the real- isation of projects supported from EU funds. For example, within the framework of the Education for Competitiveness Operational Programme, UJEP participates in the NetRe- gio project, a platform for the acceleration of networks, relations and the strengthening of links between regional research develop- ment and the application sphere. Within the framework of Target 3 for cross-border co-operation between the Czech Republic and the Free State of Saxony, it participates in the Czech-Saxon University Initiative and the InWest- Transfer of IT knowledge for the economic development of the Saxon-Bohe- mian border region project. More at www.ujep.cz, e-mail: jana.sikova@ujep.cz The Jan Evangelista Purkyně Univer- sity in Ústí nad Labem (UJEP) was granted university status in 1991, which means that this year it is celebrating its 20th anniversary.The current enrolment at the University, which comprises seven faculties and one institute, is around 12 000. Photo:UJEParchives

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Prosper Golf Resort ČeladnáTHE LARGEST GOLF RESORT IN CENTRAL EUROPE Prosper Golf Resort Čeladná is an exclusive destination situated on 140 hectars in the picturesque village of Čelad- ná, which is positioned in the heart of the beautiful Beskydy Mountains in the northeast of the Czech Republic. Two Championship 18-hole golf courses with numerous golfing facilities and the stylish Golf restaurant with a sum- mer patio are part of the resort as well as Prosper Horse Ranch and the luxurious alpine-styled Mountain Golf Hotel ****, which creates a pleasant atmosphere in the mountainous landscape of the Beskydy. Prosper Golf Resort belongs to PGA European Tour, the highest golf competition in Europe, which our Resort proudly hosts from 16 – 19th August. As an option, we would like to offer accommodation in Elektra Hotel *** in the centre of Ostrava near the famous Stodolni Street, where more than 70 pubs, bars, discos and restaurants are located. You can enjoy the rich night life... PROSPER GOLF RESORT ČELADNÁ 739 12 Čeladná 741 E-mail: travel@prosper-golf.cz Managing Comp.: Prosper Trading a.s. www.prosper-golf.cz Phone: +420 605 234 636, +420 558 440 410

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WE ARE ACTIVELY SEARCHING FOR BUSINESS PARTNERS who require the professional services of a reliable haulier for the transport of partial consignments between the Czech Republic and Western Europe (Germany, the Netherlands, Belgium, France, Swit- zerland, Denmark, Finland, Sweden, and Norway). CONSIGNMENT DESCRIPTION: up to 12 tonnes, 1-17 pallet spaces max. size of one piece 4.50 m x 2.40 m x 2.60 m max. weight of one piece 1.5 tonnes ADR possible NEW SERVICE: partial/incomplete consignments between CZ<->D, NL,DK DESCRIPTION OF BUSINESS: Domestic and international bulk cargo transportation and freight forwarding service Express consignments Logistic services and consulting Storage CZ 533 01 Pardubice, CZ 400 01 Ústí n/L, D 89542 Herbrechtingen WE TRANSPORT: insulation materials, bulk consignments 38 pallets per 3 metres, pallets, hygienic materials, electronic (white) goods SPECIALISATION: Vehicles with space 120 cu. m and 38 pallet Crane loading 3 metres of height 15.5 m of usable length Swop body MANAGEMENT CONTACTS: Pavel Svoboda Agent phone: +420 475 258 549 fax: +420 475 258 555 GSM: +420 602 472 160 pavel.svoboda@kareka.cz David Kovářík Legal representation phone: +420 475 258 541 fax: +420 475 201 233 GSM: +420 602 118 385 david.kovarik@kareka.cz KAREKA, spol. s r.o. Jumbo Spedition Na Luhách 12, 400 01 Ústí nad Labem Czech Republic WE ARE A MEMBER OF E.L.V.I.S. AG SPECIALISING IN LARGE VOLUME TRANSPORTS WE USE THE PART LOAD SYSTEM TO TRANSPORT PARTIAL CONSIGNMENTS BETWEEN THE CZECH REPUBLIC AND WESTERN EUROPE Part Load Network www.kareka.cz

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3 2011

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AGADOS s.r.o. • PRŮMYSLOVÁ 2081 • 594 01 VELKÉ MEZIŘÍČÍ • CZECH REPUBLIC • PHONE: +420 566 653 301 • FAX: +420 566 653 368 • E-MAIL: OSTRY@AGADOS.CZ • WWW.AGADOS.CZ AGADOS s.r.o., the traditional Czech producer of trailers of total weight between 300 and 3500 kg, some of which can achieve speeds of 100 km per hour. TRADITION AND PROGRESS

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3 | C Z E C H E N G I N E E R I N G Supplement of Czech Business and Trade 3/2011 CONTENTS ANALYSIS Metal-Cutting and Metal-Forming Machines, or“Where Manufacturing Begins”… 4 CZECHTRADE AGENCY PRESENTS Association of Engineering Technology 9 CZECH TOP Our Principle: Always to Be“At the TOP” 13 List of Winning Exhibits in the Gold Medal MSV 2011 Competition - Gold Medal 15 List of Winning Exhibits in the Gold Medal MSV 2011 Competition - Honourable Mention 16 RESEARCH AND DEVELOPMENT New Experimental Aircraft, VUT 001 MARABU 18 New Centre Will Also Devise Quiet Machines 18 First Hydrogen Bus in the CR 18 SURVEY 20 GOOD NEWS Škoda Makes Electromobile Octavia Green E Line 22 American Investment in the Czech Republic 22 MSV 2011 Occupies Whole Brno Exhibition Centre Again 22 Czech Patent 22 Škoda Electric Will Supply Turkey with Locomotives Worth Two Milliard CZK 22 PRESENTATION OF FIRMS: AGADOS, spol. s r.o.; Česká exportní banka, a.s.; ESKO, spol. s r.o.; FERRIT s. r. o.; J 4 s.r.o.; KOVONA KARVINÁ, a. s.; KOVOSREAL s.r.o.; KVELB s. r. o.; NAVEL, spol. s r.o.; Řetězárna a.s.; Sokolovské strojírny a. s.; TOS VARNSDORF a.s.; Veletrhy Brno, a.s.; VYMYSLICKÝ - VÝTAHY spol. s r.o. MK ČR E 6379 This magazine is published as a supplement of the Czech Business and Trade economic quarterly. Managing Editor: Pavla Podskalská Graphic Design: Nina Nováková Graphic Designer: Jiří Hetfleisch, Anežka Zvěřinová Production: Anežka Zvěřinová Address: PP Agency s.r.o., Myslíkova 25, 110 00 Praha 1 Czech Republic, Phone: +420 221 406 622 Fax: +420 224 930 016, e-mail: journal@ppagency.cz www.ppagency.cz Deadline: 15/8/2011 Attitudes expressed by the authors of articles in this magazine are not necessarily consistent with the viewpoint of the Publisher. Coverphoto:PhotoCombo;page3photo:PhotoCombo Czech Engineering

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| 4 A N A LYS I S The field of metal-cutting and metal-form- ing machines is undoubtedly one of the main propellers in the process of achieving and maintaining competitiveness in any economy. For this reason, the state of the field can be considered an indicator of sorts that shows the level of economic health and the efficacy of management, both from the microeconomic and macroeconomic points of view. The Association of Engineering Tech- nology, being an interest-group of forty-six of the most important Czech and Slovak producers of metal-cutting and metal-form- ing machines, not only carefully monitors de- velopment in this field, but also protects the interests of its members within the individual programme topics of its activities and pro- vides them with support and services. Position of the Field in Current Economic Conditions Current results in the field, just like devel- opment trends that have always been the subject of analyses, need to be evaluated in relation to pan-European and global de- velopment of the economy. Because of its high level of openness and its participation in wider, transnational supplier-consumer chains, the Czech economy has been signifi- ideal. Following several extraordinary years of economic growth, which came close to 6%, the collapse of world trade along with domestic consumption contributed to the fact that the real GDP decreased by over 4% in 2009. And it was industry that accounted for over one half of the overall decline. BRICS, Germany, or We – Who Will Head the Post-Crisis Start? If we allow that the worse consequences of the crisis are already behind us, and the longingly awaited revival of the market is becoming a reality, especially in BRICS coun- tries (Brazil, Russia, India, China, South Africa) and subsequently in Germany as well, the truth still holds that the cycle of recovery and the expansion of production bases has not yet been started to a sufficient degree in other countries of the Eurozone. The afore- mentioned revival thus still remains some- what fragile, and some reputable world economists even suggest the possibility of a new recession. However, for the time being, it looks as if the field of metal-cutting and metal-form- ing machines has received a positive im- pulse after all – in the form of an increase in the number of orders. Telling symptoms re- corded by the first batch of this year’s statis- tics of production and export really seem to support this. As it is, a number of European and non-European companies in the ma- chine-building and other fields have started to invest in purchases of new equipment for their production lines during the post-crisis period, and our producers should therefore be adequately prepared for this situation. A technically and price-wise competitive production of top machines, components and complexly equipped workplaces, fitted with modern technologies, will become the show-piece of the metal-cutting and met- al-forming field – provided our producers succeed in capturing this fast development trend in time. Because foreign competition is, it would seem, more than well prepared and intends to demonstrate its strength this autumn at the largest trade fair in the field, the EMO Hannover 2011. Photo:PhotoCombo Metal-Cutting and Metal-Forming Machines, or“Where Manufacturing Begins”… Petr Zemánek, Director, Association of Engineering Technology, Prague cantly hit by the economic downturn that immediately followed the onset of the fi- nancial crisis. Let us not forget that over 80% of the production of Czech metal-cutting and metal-forming machines is intended for export and that this export is, to a great de- gree, intended for countries outside of the European Union. It is this fact that represents a certain advantage for the metal-cutting and metal-forming industry, because non- European markets, whose absorption capa- bility is now rising significantly, were being abandoned by a number of other fields in the last twenty years. On the other hand, the substantial volatility and long-term strengthening of the Czech Crown have to be considered a disadvantage for fields ori- ented at export, because both these trends make export significantly more expensive and negatively influence the competitive- ness of Czech exporters. This is also the reas- on why Czech exporters are calling for an expeditious accession to the euro, but the government has not had much understand- ing for this demand so far. Generally, it can be said that the condi- tions which domestic producers of metal- cutting and metal-forming machines had to live with during the recession were far from

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5 | C Z E C H E N G I N E E R I N G “Asian Tigers” – Danger, or Stimulus? Asian markets may serve as a textbook ex- ample of rapid development. Their dynamics have historically moved from Japan through Korea into China. This country, with an unim- aginable land area, has a huge, as yet unsatu- rated internal market that can absorb both local and imported production in sufficient quantities. However, should the demand in China decrease significantly – and concerns regarding the overheating of the economy and the burst of the investment bubble have been cropping up ever more often – it is nec- essary for European producers to be ready for an aggressive influx of Asian competition in the rest of the world. Economic develop- ment in the whole of Asia thus needs to be monitored very closely, and changing condi- tions of both an economic and political na- ture have to be acted upon very quickly. Road towards Improved Prestige in Technical Fields Does Not Have to Be Hard Following more than two years of reces- sion, many European countries, and the Czech Republic as well, see the necessity for a quick transition from “crisis” and con- siderable stimulating economic measures towards a policy of implementing medium- term consolidation strategies, which include intensive work with human resources. This process starts, without a doubt, on the level of secondary or vocational education, which needs to be attended to across all fields and with a special emphasis on the education of quality technical intelligence. As has already been mentioned, this is by far not an exclusively Czech problem. It has been suggested for some time now that it is in the European interest to build suffi- cient capacities and functional mechanisms in order to be able to predict the needs of the labour market on both the national and EU levels. Specifically, this means improving the accuracy of research methods, regular updating of databases and thorough moni- toring of demand and supply. At the same time, we have to realise that there isn’t an exact method that allows us to make reli- able predictions regarding the future needs of individual fields in relation to the educa- tional system, social programmes and pro- grammes for the development of human resources; mainly because the majority of these programmes is – unlike the relatively volatile and hard-to-predict fluctuations in the global economy – of a downright me- dium-term to long-term nature. When working with youth, we have to continue with some proven models and functional methods, but mainly we have to seek new paths. In recent years, interest has been concentrated chiefly on intensifying the collaboration between producers and regional schools and vocational training institutions. Apart from that, attention has been paid to quality marketing of promo- tional events that serve to awaken the inter- est of students in technical fields. For exam- ple, competitions for young programmers of CNC machines from secondary schools have proved very successful. These com- petitions have been held for the past three years as part of the accompanying pro- gramme of the International Engineering Fair in Brno. Groups of students compete by trying to build a programme for machining a workpiece shown in a drawing. A correctly built programme of the best technological quality is then tried on a real machine. The winners’reward is not only a diploma and an award, but also promotion for their school and their names. It is very gratifying that we have been able to secure the support of the Ministry of Industry and Trade for this event for two years running. Science and Research in Close Contact with Production Practice Further development in the field of metal- cutting and metal-forming machines is also related to the necessary acceleration of the process of implementing new technologies Machine tools export from the CR acc. to the territories in 2010 Sources: Czech Statistical Office, 8. 7. 2011, Charts prepared by: Blanka Markovičová, SST Russia 13.46% Poland 5.15% Ukraine 3.13% China 10.91% Slovakia 4.78% Other 26.64% Germany 27.33% USA 5.18% Italy 3.42% Sources: Czech Statistical Office, 8. 7. 2011, Charts prepared by: Blanka Markovičová, SST Machine tools import to the CR acc. to the territories in 2010 Korea 8.31% Switzerland 6.42% China 3.20% Italy 7.77% USA 4.80% Other 26.64% Germany 38.10% Japan 6.95% Taiwan 3.30%

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| 6 A N A LYS I S and taking into account the requirements for decreasing energy consumption of machines and the negative influences on the environ- ment during their entire life-cycle. There is a number of projects, on both the national and European levels, that focus on these is- sues. These projects are being investigated by young technicians from the Research Centre of Manufacturing Technology at the Fac- ulty of Mechanical Engineering of the Czech Technical University in Prague. A result that bears mentioning is the preparatory study for the implementing regulation of the Direc- tive of the European Parliament, establishing a framework for the setting of eco-design re- quirementsforenergy-relatedproducts.Inthis regard, the European Association for Collabo- ration on Production of Machine Tools, CECI- MO, as well as experts from the Association of Engineering Technology, have been very active. The rate of success of the output from theseexpertassignmentswillbemeasuredby the oft-emphasised higher rate of competi- tiveness of the final products of our producers on the world market. State Support Is Not Only Welcome But Essential The speed, thoroughness, and efficacy of these processes will also depend on the government’s efforts to form a positive busi- ness environment. The most frequently dis- cussed measures include the elimination of obstacles to entering the market, stronger pro-export policies and strengthening fair economic competition. The realisation of these reform steps will be somewhat ham- pered by some of the debts the Czech Re- public has on the macroeconomic level. The main issue will be the reserved approach to- wards the activities of the European Union oriented at improving the competitiveness of the industry. The overly severe budget cuts that look likely to send the gross dom- estic product down below 2% again, i.e. beneath the average in the Eurozone, will surely play their part as well. Even Statistics Can Delight Despite the listed problems related to the consequences of the crisis and the general economic situation in the country, the field of metal-cutting and metal-forming machines still remains one of the flagships of Czech industry. Official statistics published by CECI- MO, seated in Brussels, put Czech producers in a very flattering position when compared to world and European classifications: 13th place in the world and 7th place in Europe in the amount of production of metal-cutting and metal-forming machines. Considering the size of the Czech economy and the fact that the majority of production companies is in Czech hands and they manufacture fi- nal products, this is an undeniable success. For several years now, the renowned Italian magazine, Tecnologie Meccaniche, which is entirely dedicated to the field of metal- cutting and metal-forming machines, tools, automation and robotisation of technology processes, has been publishing a so-called European classification of the first 100 largest producers in the field. Besides the traditional field leaders from Germany, Switzerland, and Italy, five to eight Czech companies have regularly made the list in the last three years.

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7 | ”Know Thyself”(Nosci se ipsum) Self-reflection has traditionally been one of the necessary conditions for a successful foray into any kind of human endeavour. Current entrepreneurial practice shows us that this ancient wisdom has not lost any of its truth. In conclusion, let us contemplate the weaknesses and the qualities of Czech business entities in the machine-building field that have been identified by confron- tation with foreign firms. We have to ad- mit that there are still many deficiencies in the continuous mapping of new markets, a flexible search for often unrepeatable business opportunities and a quick re- sponse to results of marketing surveys. The effort to remedy these deficiencies should be accompanied by an effort to improve the presentation of our own qualities and acquire a broader knowledge of the tech- nological and production capacities of our companies, which really can bear compari- son to foreign competition. We just have to make it known. In short, we cannot live on the former glory of traditional machine- building brands; instead, we have to make the new ones world-renowned as well and as quickly as possible. Czech businesses have a number of quali- fications for the fulfilment of these premises. Our position in Europe and the world is fa- vourable – the Czech Republic is not consid- ered a superpower, at least not in the nega- tive meaning of the word. Czech producers are capable, especially when under pressure, of collaborating on realising efficient collec- tive solutions and putting behind their feel- ings of exclusivity for a time. The Czech en- trepreneur has not lost his or her creativity, the ability to feel empathy and the skill to establish professional contacts with a high level of openness and friendliness. The fu- ture of the Czech machine-building indus- try will demonstrate up to what level we are able to utilise these distinctive qualities. Commentary to Attached Charts The attached charts (p. 5) make it clear that, in the long-term, Germany remains the most important partner of the Czech Republic in the field of metal-cutting and metal-forming machines, for both import and export. This fact is also evidenced by the considerable interest Czech companies have shown in participating in the most important trade fair event of this year, the EMO Hannover 2011. The Czech Republic is currently ranked third among European ex- porters of machines to Germany and fourth in the world-wide competition of exporters to the German market. The top ten countries in the list of the CR’s foreign trade for 2010 include both countries thattraditionallyfeatureamongthestrongest in the field (the USA, Italy, South Korea, Swit- zerland) and those that belong to dynami- cally developing regions within the world market area, i.e. to areas that call for operative exploitation of the currently high absorption potential (Russia, China, as well as the Ukraine and Poland). In view of the current develop- ment on the world market, it is expected that Czech producers will attempt to enter the very important markets of Latin America and South Africa as soon as possible. C Z E C H E N G I N E E R I N G

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9 | M E TA L LU R G Y, F O U N D R Y I N D U S T R Y, A N D S T E E L CO N S T R U C T I O N S Association of Engineering Technology The Association of Engineering Technology (SST) currently associates 46 important enti- ties operating in the area of machine tools and forming machines. The basis of the marketing activities of this association is, among other things, the consistent support of manufacturing enter- prisesinorganisingtheirparticipationinexhi- bitions and trade fairs at home (International Engineering Fair in Brno), but mainly in other countries. The climax of the 2011 exhibition year has been, beyond all doubt, the EMO Hannover 2011 Metalworking Trade Fair. In the first phase, the task of the SST expert team, in agreement with the Ministry of In- dustry and Trade of the Czech Republic and the Czech Chamber of Commerce, is the choice of trade fair events in territories offer- ing a chance for the products of our mem- ber firms to succeed on the local markets. In the second phase – on the basis of negotia- tions with the realisation firms and with the effective support of Czech diplomatic mis- sions and the CzechTrade Agency’s offices in foreign countries – the team’s task will be to organise the participation of exhibitors in those exhibitions under the most favourable conditions possible. After all, as is shown by the latest statistics, one crown invested in supporting these foreign events generates a profit amounting to one hundred crowns! The entry of Czech firms into foreign mar- kets is supported significantly by specific moves coordinated by the Ministry of For- eign Affairs and the Ministry of Industry and Trade as part of the export-oriented policy of the state, one of the basic instruments of which is the Agreement on a guaranteed level of services to promote the commer- cial interests of Czech companies, signed recently by representatives of the two min- istries. This thoroughly deliberated instru- ment is not only preparing ground for the establishmentofspecifictradecontacts,but, in the spirit of economic diplomacy, it will undoubtedly also help promote the good name of our industry and practically dem- onstrate the skills of Czech manufacturers. The present tables are intended to pro- vide essential information about supported exhibitions and trade fairs held at the end of 2011 and in the year 2012. Participation in trade fairs towards the end of 2011 1. EMO Hannover 2011 19 – 24 Sept. 2011 2. International Engineering Fair Brno 3 – 7 Oct. 2011 3. Arbil International Trade Fair, Iraq 24 – 27 Oct. 2011 4. IIF Kiev 23 – 26 Nov. 2011 5. MACTECH Cairo, Egypt (depending on the political situation and security) 17 – 20 Nov. 2011 Participation in exhibitions and trade fairs in foreign countries in 2012 under the aegis of the Ministry of Industry and Trade of the Czech Republic International Trade + Industrial Machinery Show, Karachi 29 May – 2 June 2012 MECANICA, São Paulo 22 – 26 May 2012 METALLOOBRABOTKA, Moscow 28 May – 1 June 2012 Machine Tool Indonesia, Jakarta 5 – 8 Dec. 2012 Participation in exhibitions and trade fairs in foreign countries in 2012 under the aegis of the Czech Chamber of Commerce FIMAQH, Buenos Aires, Argentina 29 May – 2 June 2012 CCMT 2012, Nanjing, China 16 – 20 April 2012 Mechanical Engineering + Metalworking, Kazan June 2012 HARDEX Johannesburg, Republic of South Africa Sept. 2012 Photo:PhotoCombo

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R E S E A R C H & D E V E LO P M E N T SST MEMBERS Association of Engineering Technology - SST SST provides support to member companies in the ﬁelds of commerce, marketing, technical and legal activities ARGO-HYTOS s.r.o. Filtering Technology, Regulatory and Control Techni- que, Sensors and Measurement Technique www.argo-hytos.cz Asociace strojních inženýrů ČR, Praha Science and Research www.asicr.cz ASTOS AŠ a.s. Chip Conveyers, Chip Containers www.astos.cz AXA CNC stroje, s.r.o. Vertical Machining Centres, Portal-type Machining Centres, Gantry-type Machining Centres www.axacnc.cz BOS HK a.s. Sale of Tools, Instruments, Gauges, Appliances, Machines, Equipments www.bos-teplice.cz ČKD Blansko – OS, a.s. Heavy-duty Vertical Lathes www.ckd-blansko.cz DIEFFENBACHER CZ, hydraulické lisy, s.r.o. Hydraulic Presses for sheet metal forming, Transfer Hydraulic Presses for sheet metal forming Hydraulic Presses for forming of plastics, Special Hydraulic Presses www.dieffenbacher.cz EMP s.r.o. Asynchronous Motors, Submersible Pumps, Gear Electro Pumps www.emp-slavkov.cz HELTOS, a.s. Bench Drilling Machines, Column Drilling Machines, Radial Drilling Machines, Double Wheel and Band Grinders www.heltos.cz HESTEGO a.s. Telescopic Covers, Cable Carriers, Guide-Way Wipers, Bellows,Telescopic Springs, Rolling Covers, Sectional Screens www.hestego.cz HOL-MONTA spol. s r.o. Universal Cylindrical Grinding Machines, Plain and Hole Grinding Machines www.hol-monta.com KOVOSVIT MAS, a.s. Machining Centres - portal/vertical/horizontal, CNC lathes, Multifunctional Turning-milling Centres, etc. www.kovosvit.cz KULIČKOVÉ ŠROUBY KUŘIM, a.s. Ball Screws, Trapezoidal Screws, Cylindrical Rods for Linear Guides, Linear Actuators, Telescopic Ball Screws www.ks-kurim.cz METALPRES s.r.o. Toggle Presses, Two-point Crank Presses, Cross Wedge Rolling Machines, Hydraulic Table Shears, Powered Sheet Bending Machines, Cold Bar Parting Machine, etc. www.metalpres.cz MIKRONEX s.r.o. CNC Control Systems, CNC Lathes, CNC Milling Machines, CNC Grinding Machines www.mikronex.cz MOTOR JIKOV Strojírenská a.s. Machine Tools Components www.mjs.cz PILOUS - TMJ s.r.o. Saws for Metal, Saws for Wood www.pilous-tmj.cz Pramet Tools, s.r.o. Cutting inserts for turning, milling, drilling, Milling tools and drills with cutting inserts and other types of tools www.pramet.cz Rakovnické tvářecí stroje s.r.o. Trimming Presses, Semiautomatic Hydraulic Presses, Pressure Die Casting Machines, Aluminum Chill-Mould Casting, Injection Molding Machines, Pressure Die Casting Automated Workplace, etc. www.tosrakovnik.cz Renishaw s.r.o. CMM Probe Systems, Systems for job set-up, Tool set- ting and inspection on Machine Tools, Laser and auto- mated ballbar, Systems for performance measurement and calibration of Machines, Encoder Systems for high accuracy position feedback, etc. www.renishaw.cz RETOS VARNSDORF s.r.o. Horizontal Milling and Boring Machines, Floor-type Horizontal Milling and Boring Mills, General repair and renovation www.retos.cz Schneeberger Mineralgusstechnik, s.r.o. Mineral-cast Products www.schneeberger.com ŠKODA MACHINE TOOL a.s. Horizontal Milling and Boring Machines, Centre Lathes, rotary tables www.cz-smt.cz Šmeral Brno a.s. Vertical Forging Presses, Trimming Presses and other mechanical presses, Pneumatic-hydraulic Drop Hammers, Cross Wedge Rolling Machines www.smeral.cz

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M E TA L LU R G Y, F O U N D R Y I N D U S T R Y, A N D S T E E L CO N S T R U C T I O N S SPINEA, s.r.o. TwinSpin Bearing Reducers www.spinea.sk Společnost pro obráběcí stroje Science and Research STROJIMPORT a.s. Export of Machine Tools STROJÍRNA TYC s.r.o. Gantry-type Milling and Drilling Machines, Portal-type Machining Centres, Gantry Type Horizontal Surface Grinding Machines www.strojirna-tyc.cz STROJÍRNY Čelákovice spol. s r.o. Gear Measuring Instruments, Gearing Machines, Complete Overhauls and Machines Modernization, Master gears and Spare Parts Production www.gearspect.com www.strojtos.cz STROJTOS LIPNÍK, a.s. Knee-type Milling Machines, Bed-type Machining Centres, Vertical Machining Centres Machining Centres with Travelling Column, Five-axis Vertical Machining Centres TAJMAC-ZPS, a.s. Machining Centres – vertical/horizontal/multi-pro- fession, multi-spindle Automatic Lathes, CNC Sliding Headstock Machines www.tajmac-zps.cz Tecnimetal - CZ, a.s. Chip Conveyers, Telescopic Guards, Telescopic Spring Guards, Rolling Guards, Belows, Cable Carriers, Guideway Wipers www.tecnimetal.cz www.tgs.cz TGS nástrojárna s.r.o. A local distributor of CNC Machine Tools, Carbide and Ceramic Cutting Tools TOS KUŘIM - OS, a.s. Portal-Type / Gantry-Type Machining Centres, Floor-Type Horizontal Milling and Boring Mills, Machining Centres with Travelling Columns, Horizontal Machining Centres, Single-Purpose Machines and Automatic Transfer Lines www.tos-kurim.cz TOS Olomouc s.r.o. Knee-type Milling Machines, Toolroom Milling Machines www.tos-olomouc.cz TOS Svitavy, a.s. Multi Rip Saws, Panel Saws, Cross Cut Saws, Four Sided Moulders, Thicknessers, Spindle Moulders Band Saws, Chucks, Surface Planers, Thicknessersers single side, Combined Surface Planer and Thicknesser, Stock Feeder TOS VARNSDORF a.s. Horizontal Milling and Boring Machines, Floor Type Horizontal Boring Mill, Machining Centres, Special Machines www.tosvarnsdorf.cz TOSHULIN, a.s. Vertical Lathes speciﬁed for high-precision and efﬁcient turning www.toshulin.cz TRENS, a.s. Universal Centre Lathes, CNC Lathes TST servis, a.s. Sale of Machine Tools and Forming Machines www.tstservis.cz Vanad 2000 a.s. CNC cutting machines, CNC burning machine www.vanad.cz Walter s.r.o. CNC Grinding Machines, Technique of Measurement WEILER Holoubkov s.r.o. Portable Radial Drilling Machines, Travelling Radial Drilling Machines www.weilercz.com ŽĎAS, a.s. Hydraulic Forging Presses, Hydraulic, Hydraulic, Forging Rail Manipulators, Container Scrap Shears, Semi-mobile Scrap Shears, Baling Presses, Stationary Scrap Shears, Hydraulic Assembly Presses, Technological Lines for Sheet Metal and Volume Forming, etc. www.zdas.cz ZEBR s.r.o. Machines for Venetian Blinds, Machines for External Blinds, Machines and Tools for Proﬁle Machining, Other Machines and Tools Zkušebna VUOS s.r.o. Science and Research www.zkusebnavuos.cz www.strojimport.com www.tos.cz www.trens.cz www.sst.cz www.walter-machines.de www.zebr.cz Svaz strojírenské technologie

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| 1 2 TESTED CHAINS QUALITY CLASS 2 AND 3 TESTED HIGHER-STRENGTH CHAINS QUALITY CLASS 4, 5, 6, 7, 8 AND 10, SIZES FROM 4 TO 34 MM NON-TESTED CHAINS SUSPENSION CHAINS QUALITY CLASS 2, 8 AND 10 SUSPENSION CHAIN ACCESSORIES QUALITY CLASS 2, 8 AND 10 ALLOY STEEL FORGINGS UP TO 4 KG, CARBON STEEL FORGINGS UP TO 7 KG ALLOY STEEL FORGINGS UP TO 4 KG, CARBON STEEL FORGINGS UP TO 7 KG DRAWN WIRE THE FIRM’S CURRENT PRODUCT RANGE INCLUDES: Řetězárna a.s. is a firm with more than a century-long tradition in the manufacture of welded and knotted chains and other chainaccessories.Theextensiveexperienceofitsqualified employees,modernmachinesandequipmentandaccred- itation with ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007quality systems are a guarantee to customers that they will receive high-quality products from us. This quality is further guaranteed by the X45 certificate, which only a few dozen companies the world over have gained. We manufacture those products under ČSN, DIN, EN and otherstandards.Currentlythefirmexportsmorethan80% of its output to more than 36 countries worldwide, and it co-operates with leading European chain manufacturers. Řetězárna a.s. Polská 48, 790 81 Česká Ves, Czech Republic Phone: +420 584 488 115, Fax: +420 584 428 178 E-mail: retezarna@pvtnet.cz, www.retezarna.cz

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1 3 | C Z E C H TO P Our Principle: Always to Be “At the TOP” T.F.A. alfa s.r.o. is linked to the tradition and top skills of machine engineers in the area of textile machine engineering in the former Czechoslovakia, which in the 1950s gave the world the know-how for water and pneumatic jet weaving technology. The firm uses its technical equipment in all areas, both for its own production and for collaboration with renowned firms op- erating in different sectors. Today, in collaboration with VUTS a.s. Liberec, the firm manufactures, com- pletes and provides servicing for techni- cally highly demanding pneumatic looms manufacturing technical glass fibres used in construction. The machines are in- tended for both Czech manufacturers and manufacturing firms in countries such as Belarus, the Ukraine, Russia, and Latvia. The firm takes advantage of the skills of its workers and engineers in building complete machines. Between 2007 and 2011, it focused on the development of machines and equipment for the service sector. In the period under review, T.F.A. alfa s.r.o. came forward with a range of machines intended for the equipment of SKI service centres for ski and snowboard maintenance. The standard of the ma- chines is comparable to those of Austrian and Swiss manufacturers. The firm’s prod- uct range fully covers the needs of highly exigent medium-size ski service centres, stores, and ski rental shops. In its dealings with customers, the firm’s management has always borne the rule in mind: “our customer – our master”. Guar- antee and post-guarantee service avail- ability and flexible consumer material and spare part delivery are assets appreciated by the market. In the development of this type of machinery and equipment, de- signers always consider the comfort of the final user in operating the machines. With its highly efficient machining cen- tres and machinery supplied by renowned German manufacturers, such as HELLER, MAHO Deckel, and the Japanese manu- facturer KYTAMURA, T.F.A. alfa is one of the firms with top-quality equipment. The ma- chining skills of the firm’s technicians, build- ing on a tradition going back decades, are the basis for T.F.A.’s final product placed on the market under the label of USS (Czech abbreviation for Universal Construction System), used for multiple clamping of work pieces on horizontal machining cen- tres. Currently, the product, which is pro- tected by a patent, has no parallel either in the Czech Republic or in the whole of Europe. For users, this means lower costs, shorter time needed for the preparation of production and great flexibility. Although the firm falls into the category of medium-sized enterprises, it has its place in the area of development. It co-operates closely with development workplaces in the Czech Republic (VUTS a.s. Liberec,Tech- nical University Liberec). T.F.A. alfa is also participating in an international project in the area of textile engineering called MOD- SIMTex, coordinated by the Barcelona Uni- versity and co-financed by the EU. During its presence on the market, the firm has earned a good name for itself due to its technical standards, and its collaboration with renowned buyers in Europe. A few years ago, it participated in the Large Hadron Collider project at CERN in the Geneva region. The firm ex- ports components for transport machines (tractor hydraulic systems), pharmaceuti- cal equipment, woodworking machines, air-operated and air-conditioning equip- ment and tyre manufacturing machines to Germany, France, the Netherlands, and Northern Ireland. And, last but not least, the firm also makes deliveries to manufac- turers of oil drilling systems. For the whole duration of its presence on the market, T.F.A. alfa s.r.o. has been guided by the principle always to be at the TOP. TOP product – exclusive position in the Czech market. TOP quality – in its history, the firm has had no single problem involving quality to have been brought before the Court. TOP supplier – in its history, the firm has had no single buyer-supplier problem to have been brought before the Court. TOP employer – the firm has had no prob- lems during its whole existence to have called for the Trade Union safeguarding of its employees. The firm’s fluctuation is just between 2% and 3%. Photo:T.F.A.alfas.r.o.

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I N F O R M AT I O N Projection of gross added value (GAV), productivity of labour, and employment in the branch (2010-2020) BUSINESS AND MANUFACTURING FIRM ENSURING COMPLETE DELIVERY OFTOOLS AND INSTRUMENTS FOR ENGINEERING FIRMS www.navel.cz MANUFACTURE AND SHARPENING OF VHM INSTRUMENTS ON 5-AXIX CNC WALTER GRINDERS MANUFACTURE, SHARPENING, RENOVATION OF PKD (PCD) INSTRUMENTS Navel spol. s r.o., Nová 641, 382 32 Velešín, Czech Republic, phone: 380 347 410, e-mail: navel@navel.cz, www.navel.cz Karel Maček, Executive Director, instrument manufacture, mobile phone: +420 605 299 860, e-mail: karel.macek@navel.cz ISO9001ISO14001 ISO9001/2008 SPECIALISATION ISTHETURNING, PRESSING AND INJECTION MOULDING OF PLASTIC PARTS, AND POWDER COATING www.centes.cz CENTES, spol. s r.o. IS A CZECH PRIVATE FIRM WITH A TRADITION OF 20 YEARS, BASED IN ČESKÉBUDĚJOVICEANDEMPLOYINGAPPROXIMATELY70PEOPLE.ITSSPECIALISATIONIS THE TURNING, PRESSING AND INJECTION MOULDING OF PLASTIC PARTS, AND POWDER COATING FOR CUSTOMERS IN THE CZECH REPUBLIC, THE EU AND THE USA. THE CENTES QUALITY MANAGEMENT SYSTEM BASED ONTHE ISO 9001/2008 STANDARD IS CERTIFIED BY THE COMPANY BUREAU VERITAS CERTIFICATION. CENTES, SPOL. S R.O. IS A CERTIFIED AND WELL-ESTABLISHED SUPPLIER AND PARTNER OFTHE EATON GROUP. CENTES, spol. s r.o., E. Rošického 30, 370 05, České Budějovice, Czech Republic phone: 385/792111, fax: 385/342039, e-mail: info@centes.cz, www.centes.cz

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1 5 | C Z E C H TO P MIXED FUEL ENGINE FOR ELECTRICITY AND THERMAL ENERGY GENERATORS Producer: Phoenix-Zeppelin, spol. s r.o., Lipová 72, 251 70 Modletice Description: Mixed fuel engine, designed specifically for electricity and thermal energy generators is modified for mixed-fuel diesel gas, which significantly reduces operating costs. Alternatively, you can also use liquid and gaseous biofuels. Existing emergency diesel generators can be used in this way as a supporting source of electricity and heat. List of Winning Exhibits in the Gold Medal MSV 2011 Competition - Gold Medal FVCT 180 / 2 CNC Producer: Strojírna Tyc, s.r.o., Dlouhá 17, 338 05 Mýto Description: Multifunctional 6-axis machining centre with portal construc- tion. The machine is equipped with two-axis continuously controlled mill- ing head with high frequency electrospindle. Advantages of the machine can be found in a robust and very stable rigid frame, which allows high accuracy and quality of work. JETTY, ROBOT FOR CLEANING AND INSPECTION OF THE AIR-CONDITIONING DUCT Producer: Neovision, s.r.o., Barrandova 409, 143 00 Praha 4 phone: +420 225 273 650,e-mail: neovision@neovision.cz, www.neovision.cz Description: The robot is used for inspection and cleaning of ventilation pipes, kitchen and industrial exhausts. The robot can pass through both the circular pipes, as well as rectangular and square ones, in horizontal, slanted, and ver- tical direction. Dry ice blasting method with adjustable rotating jets is used for cleaning. The cleaning process can be observed through a camera placed directly on the robot. Photo:VeletrhyBrno,a.s.

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| 1 6 C Z E C H TO P List of Winning Exhibits in the Gold Medal MSV 2011 Competition - Honourable Mention FGR MIDALU Producer: FPOS a.s.,Třebovská 111, 562 01 Ústí nad Orlicí phone:+420777769494,e-mail:l.felgr@gmail.com,www.fpos-kovo.cz Description: Naked Bike class, completely Czech luxury motorcy- cle with a six-cylinder engine with a capacity of 2500 ccm, which ranks among the best that can currently be seen on two wheels and uses the best possible components, materials, and superior workmanship. MIDALU is a rendition of modern design, function- ality, comfort, and lots of rich innovative solutions and sophisti- cated details. In addition to the engine, attention should be paid to the self-supporting carbon reservoir and an unconventionally processed swing arm. At present, this bike is one of the strongest motorcycles of the world due to its volume and performance. After its January introduction, the news about this unique product went around the world from America to Japan, and this project aims to revive the faint Czech motorcycle industry. Motorcycles will be manufactured to order in single unit production on request. SOLITON Producer:WISTA s.r.o. Dlouhé díly 414, 763 02 Zlín Description: A new generation of transport and sorting systems for abrasives. An independently developed project by the company WISTA with a higher technical standard for demanding customers. Photo:VeletrhyBrno,a.s.

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CZECH TRADITIONAL PRODUCER Our company was founded in 1990, when the brothers Radislav andVladimírVymyslický started working as entrepreneurs by servicing and inspecting lifts. In 1992 this association of entrepreneurs established a limited company, which has been active on the lift mar- ket under the nameVYMYSLICKÝ –VÝTAHY s.r.o. to this day and every year it increases its share of the market. DuringitsexistenceVYMYSLICKÝ–VÝTAHYs.r.o.has establishedothercentresinBrno,Přerov,Zlín,andin Trnava,Slovakia.Wehaveaservicingandtradingnetwork inallregionalandmanydistrictcapitalsintheCzech Republic.Wearealsopresentonforeignmarkets,either makingourowndeliveries,orthroughtradeandservice partners.Slovakia,Serbia,Croatia,Slovenia,Poland,and Russiahavealongexperiencewithourlifts.Toourforeign partnersinthesecountries,wedelivercompletesupplies ofliftsandprovidemethodologyandservicing. AT THE MOMENT WE PROVIDE THESE SERVICES: CONSULTING SERVICE, LIFT PROJECTION INSPECTION, INSPECTION TESTS, REPAIRS, MEDIUM AND GENERAL LIFT REPAIRS MANUFACTURING OF MANUAL AND AUTOMATIC DOORS, MANUFACTURING LIFT CABS AND SHAFT CONSTRUCTIONS MODERNISATION OF LIFTS SALE OF LIFT COMPONENTS SUPPLY AND ASSEMBLY OF LIFTS – WE SUPPLY AND INSTALL ALL TYPES OF OUR OWN LIFTS IN NEW BUILDINGS AS WELL AS EXISTING SHAFTS RANGING FROM INEXPENSIVE STANDARD LIFTS TO LUXURIOUS AND EXCLUSIVE LIFTS. OUR DELIVERIES HAVE SHORT DELIVERY TERMS WE PROVIDE GUARANTEE FOR DELIVERED LIFTS DEPENDING ON THE SELECTED VARIATION FROM 24TO 72 MONTHS ALL DELIVERED LIFTS MEET THE EN81 STANDARDS WITH RELEVANT CERTIFICATES BEFORE THE DELIVERY TO THE CUSTOMER,THE LIFTS ARE TESTED BY A TECHNICIAN AUTHORISED BY THE ENGINEERING TEST INSTITUTE OR TÜV www.vymyslicky.czVYMYSLICKÝ-VÝTAHYspol.sr.o.,Pivovarská542,68601UherskéHradiště–Jarošov,CzechRepublic phone:+420572587202,fax:+420572587419,e-mail:info@vymyslicky.cz

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| 1 8 R E S E A R C H A N D D E V E LO P M E N T The more powerful a machine is, the faster it works, and the faster it works, the bigger the racket it makes. The new VÚTS Research Centre in the Liberec Sever Industrial Zone will have scientists devising ways to lower noise and vibrations. “This is one of our research topics that has no competition in the Czech Republic. Our unique areas of development also include jet looms for technical textiles,” revealed Miroslav Václavík, Director of the Company. The CZK 775 million project has succeeded in acquiring funding from operational pro- New Centre Will Also Devise Quiet Machines grammes of the Ministry of Industry and Trade thanks to support from European funds. The new centre for engineering re- search will create conditions for top research and development of new, progressive tech- nologies in the area of medium and preci- sion engineering. It will also focus on lower- ing the energy consumption of machines, application of new materials and linking mechanics with electronics. The premises will also host a centre for laser cutting ma- chines. The new centre should be built by the second half of 2012 when the company wants to commence test operations. Actual research is set to start in 2013. The Research Institute of Textile Ma- chines (VÚTS) was founded in Liberec in 1951. Throughout its existence, scientists acquired 700 patents; today this number is several dozen a year on average. During the 1960s, the greatest successes included the invention of jet weaving and open-end spinning. Both of these methods are still in use throughout the world. The Institute was privatised in 1996. www.vuts.cz/novy-web/www/en/uvod.html The focal point of the project was to develop and operate the first hydrogen, triple-hybrid bus in the CR – TriHyBus. The term hydrogen bus means a bus with an electric drive pow- ered by a fuel cell, which converts the chemi- First Hydrogen Bus in the CR cal energy from hydrogen directly to electric energy. Besides the fuel cell, the bus also uses batteries and ultracapacitors to store braking energy and support the fuel cell during ener- getically demanding modes of operation. The project also includes the operation of the first hydrogen refuelling station in the Czech Re- public.The bus is used for regular public trans- port in Neratovice and surrounding areas. www.h2bus.cz The Institute of Aerospace Engineering at the Brno University of Technology (IAE BUT in Brno) has completed the development of an experimental aircraft, VUT 001 Ma- rabu, which is intended for experimental testing of equipment and installations de- veloped primarily for pilotless aircraft. The reason for this testing is a new legislation that is being prepared, which will allow for the development and operation of civilian pilotless vehicles. The airframe is manufactured from composite materials, and the aircraft has New Experimental Aircraft, VUT 001 MARABU an all-metal wing and a horizontal tail plane. The aircraft is powered by a piston engine with a propeller in a thrust con- figuration. Besides this propellant unit, the aircraft also features a small jet en- gine installed asymmetrically above the left half of its wing. The Institute of Aerospace Engineering at BUT in Brno has collaborated with a number of industrial partners on the aircraft project. For example, the jet engine is a product of the První brněnské strojírny (first Brno ma- chine-works) in Velká Bíteš. www.vutbr.cz/en/ Photo:BrnoUniversityofTechnology

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| 2 0 S U R V E Y T.F.A. alfa, s.r.o. T.F.A. alfa, s.r.o., Kostelec nad Orlicí Zdeněk Ješina, Financial Manager Company turnover: EUR 6 million, 65% of revenues in euros, 12% of purchases in euros Do you think the Czech Republic should adopt the euro? When? My answer to the questions is based on three specific problems involving three or- ders, which I as a businessman must resolve in one week. First problem: The cus- tomer. I am a manufactur- er of hydraulic element carriers, which our client finishes and exports prac- tically to the whole world. It is logical that, to eliminate the risk involved in the CZK/EUR exchange rate, he demands that the invoicing be done in euros. The orders are worth approximately EUR 1 million a year, with the requirement that the prices copy the inno- vationcycle(3-5years).Inourpricecalculations, we are in a position to retain a 10 -12% profit. Secondproblem: I am preparing a quotation for a project of a German firm worth approx. EUR 1.5 million, to materialise within three years. The condition is the price at the time of the project. The profit rate is similar. The contract concerns a high added value pro- duction project. Profitability, however, must be reasonable, otherwise the whole project will be thwarted. Third problem: The profitability of our own products sold to customers outside the Czech Republic can only be assessed after they have been sold and paid for. So the reply to the question: “Should the Czech Republic adopt the euro?”is YES, and the question:“When?”has a clear answer: As soon as possible. TÜV SÜD Czech s.r.o. TÜV SÜD Czech s.r.o. Oleg Spružina, Managing Director Is it appropriate at the moment for the Czech Republic to join the Eurozone? I think joining the Eurozone at the mo- ment is not advantageous or appropriate for the Czech Republic – and for the Czech economy. I can understand all the positive things the common currency would bring, in my position both as a head of the Czech representation of a supranational hold- ing and an ordinary tourist. Nevertheless, these advantages cannot outweigh the possibilities of a flexible reaction by our currency to chang- es in the general economic situation. A clear example is the relatively smooth handling by the Czech economy of the (hopefully) wan- ing financial crisis, where the declining value of the Czech currency helped main- tain export competitiveness. This possi- bility could not be used by members of the Eurozone comparable with the Czech Republic, such as Slovakia and Slovenia, or countries which voluntarily fixed their national currencies to the euro. Such econ- omies are unequivocally more vulnerable to the impacts of a financial crisis. On the other hand, I would not like to be counted as one of the militant Euro- sceptic camp. I must say that in the long run, a single currency is definitely needed, and I can see the Czech Republic joining the Eurozone some time in the future. When this happens, however, the new Eu- rozone should be already cleaned up and – regrettably– its economy should be cen- trally managed. The current situation is not sustainable and SOMETHING must happen – either the Eurozone will have to be drastically decreased, or, on the contrary, Europe will have to take a deep and new breath and opt for a really united, centrally man- aged economy. The last few weeks have indicated that marking time is no longer viable. Photo:PhotoCombo

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2 1 | October 3–7, 2011 Brno – Czech Republic www.bvv.cz/msv www.bvv.cz/translog 069 BVV Trade Fairs Brno Výstaviště 1 CZ – 647 00 Brno phone: +420 541 152 926 fax: +420 541 153 044 e-mail: msv@bvv.cz www.bvv.cz/msv 53rd International Engineering Fair 6th International Fair for Transport and Logistics The best price offers till April 30, 2011 KOVONA KARVINÁ, TRADITIONAL SUPPLIER OF STANDARD AND SPECIAL COLD ROLLFORMED OPEN PROFILES, OFFERS DEVELOPMENT AND DELIVERY OF EFFICIENT SOLUTIONS FOR CONSTRUCTION PARTS BASED ON OPEN COLD ROLLFORMED STEEL PROFILES WITH WALL THICKNESS UP TO 6 mm. We offer: • Standard open proﬁles L, U, C, Z, OMEGA and SIGMA. • Special proﬁles made according to speciﬁc requirements. • Integrated or additional piercing of proﬁles, fair cutting, angle cutting, surface treatment by zinc plating or powder painting. • Production from input strip wide up to 700 mm and thick up to 6 mm. Contacts: Kovona Karviná, a.s., Průmyslová 2007, 73701 Český Těšín, Czech Republic Tel.: +420 558 764 175, Fax: +420 558 764 191 e-mail: kovona-karvina@kovona.cz, http://www.kovona-karvina.cz Company with better proﬁle

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| 2 2 G O O D N E W S Škoda Electric of Plzeň will supply Turkey with locomotives worth almost CZK two milliard. This is a record-setting order for the company. The order is for practically the en- tire“insides”of eighty locomotives manufac- tured by Hyundai Rotem from South Korea. “This is a great success for us. We wouldn’t be able to participate in a tender of this kind by ourselves because we don’t have enough references. But, in this way, we will play an important part,” commented Tomáš Krsek, MSV 2011 Occupies Whole Brno Exhibition Centre Again Chairman of the Board of Directors and co- owner of the mother company, ŠkodaTrans- portation. Mr. Krsek expects the company to acquire the additional references necessary to enter foreign markets. The Koreans chose Škoda from seven other companies that wanted to partake in sub-deliveries. Hyundai Rotem, which is a part of the Hyundai Group, will manu- facture the locomotives in South Korea. As- sembly of the Czech components, worth approximately CZK 25 million per locomo- tive, will be completed in Turkey. This is already a third collaboration with Hyundai; Škoda has already been supplying smaller parts for city trains in Istanbul and the Ko- rean Incheon. Škoda Electric is a part of Škoda Trans- portation, which had a revenue of ap- proximately CZK twelve milliard in the last year. The company manufactures train sets, trams, trolleybuses, and locomotives. Photo:ŠKODAAUTOa.s. The 53rd International Engineering Fair (MSV) took place on October 3–7, 2011. It has been the most important industrial exhibition organ- ised for the countries that have become new members of the European Union. Interest in participationhasbeenontheriseagain,andthe majority of exhibition areas, including the new- est pavilions, were sold out during the summer. “After last year’s exhibition, which reflected the beginning of the economic rejuvenation, this is further evidence of the positive mood of industrial firms,”said Jiří Rousek, Director of MSV. At the same time, he confirmed that the number of applications in many fields was al- ready higher than it had been last year.“Exhibi- tors who last participated in 2008, i.e. before the economic crisis, came back, and some tra- ditional exhibitors expanded their exhibition areas. The majority of our halls, including the largest pavilions, P, V and F, were filled almost to capacity,”added Mr. Rousek. The interest in the exhibition corresponds to the positive development of the economy and the growth of industrial production, not only in the Czech Republic, but also in Ger- many and the entire Central European region. Besides the automotive industry, the driving force behind domestic export is mainly indus- try and energetics. For the fourth year running, the Brno exhibition continues the tradition of Czech Patent Lubomír Dvořák, the owner of Dvořák - sva- hové sekačky, s.r.o., invented and patented an original,radio-controlledslopemower,which he successfully sells to over forty countries in the world. The company will soon open a branch in Florida, which will manufacture the Spider mowers for the American market. The mowers are already in use at Disneyland in the US, at the Daytona racing track and at the Royal Golf Club in Monte Carlo. American Investment in the Czech Republic The second most attractive field for investments by Czech and foreign firms last year was engineering.The field also attracted one of last year’s biggest projects: an investment by the American Caterpillar company, which will use theTriangle Industrial Zone to repair gas turbines from the whole of Europe, Africa, and the Middle East. Škoda Electric Will Supply Turkey with Locomotives Worth CZK Two Milliard “This investment is one of CzechInvest’s greatest successes over the past year. The in- vestor was choosing from several European countries. The Czech Republic eclipsed the other candidates chiefly by the quality infra- structure, excellent geographical location, numbers of experienced employees and a tradition of top engineering manufactur- partner countries. These have been Germany, Slovakia, Austria, and this year Poland – cur- rently the third most important business part- ner of the Czech Republic. ing,” said Miroslav Křížek, General Director of the CzechInvest Agency. Solar Turbines, a subsidiary of Caterpillar, wantstolaunchtheplantforgas-turbinerepairs next year. Eventually, it will employ up to 450 people.The company bought an eight-hectare lot in the eastern part of theTriangle Zone from its owner, the Ústí nad Labem Region. ŠKODA MAKES ELECTROMOBILE OCTAVIA GREEN E LINE The car maker, Škoda Auto, has commenced production of ten vehicles with purely electrical drive, the Octavia Green E Line. The vehicles will collect information regarding practical usability, reliability, and safety of electromobiles.

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Punching Units TruPunch 5000 Main characteristics: Extra-high speed Rapid sequence of strokes – the world’squickestpunchingmachine Rotation: radical increase in rotation speed Rapid shaping Rapid tool exchange Suction: efficient and reliable KOVOSREAL s.r.o. závod Duchcov Mostecká 1487, 419 22 Duchcov, Czech Republic, E-mail: kovosreal@kovosreal.cz Trade department: Phone: +420 417 835 111, Fax: +420 417 835 156 www.kovosreal.cz accredited with ISO 9001 and ISO 14000 quality management systems KOVOSREALKOVOSREAL s.r.o.s.r.o. traditional manufacturer of metal furniture and metal tool containerstraditional manufacturer of metal furniture and metal tool containers Controlling GaugesControlling Gauges TruBend 5170 Length of tool strip: 4080 mm ACB(AutomaticallyControlledBending) Short idle time facilitated by the rapid tool exchange system Extremely large free space for bends Intelligent 6-axle end stop Quality and safety of laser hardened TRUMPF tools

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