May - British Chamber of Commerce in the Czech Republic

FOCUS
3| 2002 The Magazine of the British Chamber of Commerce in the Czech Republic
Introducing a new BCC patron | 4
The BCC 5th Anniversary party | 14
Euro-Czech Forum news | 18
Climbing to the top | 23

Editorial
BOARD OF THE BRITISH
CHAMBER OF COMMERCE
Honorary Chairman
• H.E. Mrs Anne Pringle, British Ambassador
Honorary Vice-Chairman
• Martin Day, British Embassy – Commercial Section
Chairman
• Nick Davies
Vice-Chairman
(to be announced in June)
Treasurer
• Chris Garlick, Logica
Board Members:
• Desmond Mullan
• Gordon Lovitt
• Doug Pritchard
• Mark Neave
• Blanka Rychetská
•Tereza Urbánková
• Ian Rowbotham
WORKING GROUPS
(to be announced in June)
PATRONS:
• Allen & Overy • Anglian Water • DHL
• International Power • Logica • PricewaterhouseCoopers
• Provident Financial • Tesco
CHAMBER OFFICE:
• Simona Kalvoda, Executive Director
• Renata Scharfová, Project Manager
• Lucie Smith, Communications Manager
British Chamber of Commerce in the Czech Republic
IBC, Pobřežní 3, 186 00 Praha 8
Tel.: (00 420 2) 2483 5161, Fax: (00 420 2) 2483 5162
E-mail: britcham@britcham.cz
Internet: www.britishchamber.cz
The newsletter is published by the British Chamber of Commerce
in the Czech Republic. Should you wish to place an article, advertise or
contribute in any way to the newsletter, please contact Lucie Smith
at 02 /2483 5165.
© British Chamber of Commerce in the Czech Republic
In April 1998, at the first AGM of the BCC, I was elected to the
Board. Since then I have variously been chairman, vice chairman,
responsible for liaison with other chambers, events coordinator
and a member of our Y2K committee. I have chaired focus groups
on Russia, human resources and transparency and been an active
participant at boat parties, garden parties, Christmas parties, horse
races and go-kart races. I have dined with two Czech prime ministers
and a finance minister, two British ministers, the Mayor of Prague
and the Lord Mayor of London. I wrote several articles for Focus, hit
a few golf balls and officially opened a new Regus business center.
Now it’s time to step down and let someone else have a go.
There are many ways in which Britcham could have developed over
the past four years: as a purely business group or as a social club; as
a distinctively British organization or as part of a wider international
business community; as a meeting point either for expatriate Britons
or for Anglophile Czechs. In all these areas the Board has tried to
strike a balance and get the best of both worlds.
There are regular social events such as mixers and parties but we have
taken the creation of a better business environment as one of our core
objectives and devoted significant time and effort to initiatives in this
area.
Many of our members are internationally oriented companies rather
than purely British in their approach. We have therefore always worked
with the broader business community. Our cooperation with other
European chambers led to the creation of the Euro-Czech Forum, which
has been our route to participation in the debate on EU accession.
But we have also identified areas where the UK has a distinctive and
positive contribution to offer, such as the Y2K computer problem,
reform of the legal system and corporate governance, and focused
resources on these areas.
Our events invariably have an international flavour, with not just
Czech and British nationals but people from many other countries as
well. One of the things I find most gratifying is when a new member
tells me that he has joined not because he is British but because of
the quality of our events and activities.
The responses to our membership surveys tell us that, broadly
speaking, our members agree on this approach. It also attracts new
members. Four years ago, the Board set a long-term objective of having
200 members. Now we are close to 300 and more companies and
individuals are joining all the time. My experience of dealing with other
British Chambers of Commerce in continental Europe is that many
of them have less success than we do in achieving these balances and
getting such an enthusiastic and growing membership. However, my
experience of dealing with my Board colleagues and with our executive
team convinces me that we can sustain this balance and continue to
grow in the Czech Republic. For me, it has been a stimulating and
rewarding four years and I look forward to continuing to participate
in Chamber events in the future.
David Parish
F O C U S M A Y 2 0 0 2
3

Interview with DHL
DHL Worldwide Express is the leading international
air express company in the world.
DHL delivers your shipments quickly
and reliably to 228 countries and offers the
most suitable and customized solutions
– from single shipment consignments to
complex logistical systems.
DHL maintains full control over your
shipments throughout the entire journey,
with modern technologies allowing for
continuous tracking and tracing. DHL
responds quickly to client’s needs and strives
to improve its service offering.
We will gladly answer all your questions
– simply call our toll-free telephone number
0800-10 30 00.
We will help you to fulfill promises you
made to your business partners, clients,
and friends.
DHL Worldwide Express consists of
DHL International Ltd., operating outside
the United States, and DHL Airways Inc.,
operating within the United States. DHL
is headquartered in Brussels, Belgium.
Since 2000, DHL Worldwide Express is a
member of the Deutsche Post World Net
(DPWN) Group.
Introducing a new BCC patron
A Short History of DHL – Worldwide
1969 – Adrian Dalsey, Larry Hillblom and
Robert Lynn found DHL. The first
shipment is delivered from San Francisco
to Honolulu.
1983 – DHL is the first international air
express company to operate in Eastern
Europe.
1985 – DHL opens the largest air express
hub and sorting facility in Brussels,
Belgium.
1990 – DHL, Lufthansa, Japan Airlines
(JAL), and Nissho Iwai form a global alliance.
1998 – Deutsche Post acquires a stake in
DHL.
2000 – DHL becomes a part of the Deutsche
Post World Net (DPWN) group.
A Short History of DHL – The Czech
Republic
1986 – DHL enters the Czechoslovak market
as the first international air express carrier.
1990 – DHL registers a wholly owned
subsidiary.
1993 – DHL opens a modern package
sorting facility at Prague airport, the only
one of its kind in the Czech Republic.
1997 – DHL receives ISO 9002 quality
certification.
1998 – DHL introduces the largest regular
daily cargo flight into/out of Prague airport,
a Boeing 727-200, with a carrying capacity
of 20 tons.
1999 – DHL signs a memorandum of Understanding
with the Czech Customs Authority.
The Memorandum is recognition of DHL’s
efforts in combating the transportation of
contraband substances.
2000 – DHL Czech Republic introduces
on-line shipment ordering via our website
www.dhl.cz.
2000 – DHL introduces another novelty
into the Czech market – a laser-guided cargo
scan. A cargo scan is a fully automated
volumetric weight-measuring device.
2001 – DHL successfully passes the ISO
9001 quality re-certification audit.
in doing business today, compared to
when you started in the Czech Republic
I have been here for 2 years and the only
significant change is competition is fiercer
and better.
How will EU entry change your
business
A large percentage of our material moves as
dutiable shipments into the EU, this should
cease at the time of joining. The general
dynamics of our business here will remain
the same, the mix of products and revenue
will change accordingly and I feel a more
open market will attract more competitors.
What legislative change would be
particularly helpful to your business
Sean Bradley, General Manager – Married, 2 boys. Left the UK in 1972, grew up in
Cyprus and has worked for 4 major corporations in 8 countries in 4 continents since 1980.
He enjoys any sport and is involved in golf, soccer, floorball and running.
What initially led to you becoming
a patron
What do you consider to be the key
bene£ts of becoming a patron for DHL
A labour code that is clear; not ambiguous
as the current one. Faster legal process in
dealing with debtors.
What’s your goal for this year
Our goal is split into financial and physical
KPI’s. Our aim is to achieve these as we
have for the last 10 years. My personal goal
is to get my handicap to 18.
Simona’s hard sell! We hope that being a
patron will put DHL in a more beneficial
position, both in terms of how we can assist
the aims of the BCC and those of DHL
locally.
The key benefits are hopefully access to
VIP’s in government, information and enhanced
exposure in the business community.
Have you noticed any major differences
If you could send a message to the
Prime Minister, what would it be
Does he honestly support CR’s entry to the
EU Why
4
F O C U S M A Y 2 0 0 2

The Embassy Latest
8.15 and the main gate of the Embassy
swings open. A smile and a wave from the
guard as I drive into the courtyard. I pick
up my briefcase from the back seat and
another week begins.
Two stops on the way to the entrance:
first a word with one of the drivers. Did he
We are both reasonably happy: Spurs drew
away and Chelsea won at home. A reminder
to let me see a sample of last month’s visa
applications (I check at least 20%).
Back to the office. It never ceases to
amaze me: the Accountant has managed to
sneak last month’s accounts onto my desk.
A day in the life of ... Dick Coleman,
British Embassy Management Of£cer
and Her Majesty’s Consul
Receptions
Banquets
Cocktails
meet the visitor from London on Sunday
night Yes, and he will be picking him
up from the hotel at 9.30. Someone on the
political side will be looking after him for
the rest of the day. A few more steps then a
quick chat with the guard. Any action over
the weekend Only the Duty Officer issuing
two emergency passports. So far a normal
start.
Next call is to the office of my chief
chargehand. What does he have lined up
for today The painters are finishing off
one of the guest suites in the Residence and
the telephone engineers are coming in to
connect up some ISDN lines for what will
be part of our Global Communications
Network. OK, let me know how things go
with the telephone men.
Now the climb up the back stairs to my
office. Past the first floor entrance to one of
my domains, Consular Section. Not open
yet but I will be back down on my first
visit around 9.30. One more flight and here
I am. The daily ritual begins: look at the
telephone to see if any messages have been
left (nothing today), turn on the computer
to check e-mails and make a cup of coffee.
One message from the Ambassador: “what
budget have I allocated for upkeep of the
gardens” I dash off a quick reply. I can
hear my staff arriving as I check a few more
emails.
I check my pigeon-hole next door and
pick up some invoices which need authorising
and a bank transfer to sign. I check
each one and authorise payment. The phone
rings. It’s my Estates Manager. “Can I go
and look at a flat she has found for a new
member of staff arriving next week” We
agree to meet at 2.30. Time to nip down to
Consular Section and see what’s going on.
Always a cheerful greeting even though I
can see that the waiting-room is filling up.
“Anything special I need to know about”
Three settlement interviews today and
already one call about lost money/passport.
I don’t interfere. This is bread and butter to
the consular staff. It happens nearly every
day. A quick word with the Vice-Consul.
Tight deadline to keep as I must complete
a 100% check on some 300 – 400 vouchers
before passing it along to the Deputy Head
of Post. It will take me 2 – 3 days off and on
to complete the whole check. One of my
Assistants comes in. She is arranging a
regional training course and has just
confirmed a good deal with one of the
hotels. It sounds good, I know I can leave
it in her capable hands. The morning goes
on. A steady stream of phone calls: have I
prepared the Contract for the person who
started work last week Can I have a new
mobile phone – someone stole mine at a
restaurant on Sunday Am I free for a
meeting on Local Budgets this afternoon
Another check on the computer and a run
through of the morning’s telegrams.
Lunch-time approaches. A second visit
to Consular Section. The queue has been
dealt with and the man who lost his money
has successfully obtained more via his family
and Western Union. A new passport has
also been issued. No visa refusals and only
one minor complaint that we couldn’t issue
a visa for the Cayman Islands immediately.
Off to lunch – steak and chips and a glass
of red wine.
Back in the office after looking at the
flat, I spend 30 minutes on checking some
more of the account and then off to the
Local Budget meeting. I administer a
budget of around £1.6m and we managed
to spend 98.4% of it. A final call on
Consular Section. No problems that we
know of that are likely to crop up over night.
Time to go home but the job is not yet
finished. A shower and change as the
Australian Consul is in town from Warsaw.
A working dinner with him and some of
my colleagues from other Embassies lies
ahead. I finally get home just after 11. It’s
been a pretty average day!
It may not have happened all on the
same day, but it did happen.
Dick Coleman
Management Officer and Her Majesty’s Consul
YOUR CATERING COMPANY
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daily fresh products of one’s own
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tel.: +420-2-2199 0511 • fax: +420-2-2494 7121
e-mail: catering@golem.cz • http://www.golem.cz
F O C U S M A Y 2 0 0 2
5

Introducing New Members
Founded in 1996, Total Solutions is a top
Czech company specialised in software
systems for capital and financial markets.
Currently, our range of technology solutions
varies from trading and treasury systems to
financial calculators and Internet based
business solutions.
In addition Total Solutions provides
consultancy services (research & technical
training) and outsourcing.
Total Solutions’ clientele includes some
of the most prominent investment banks and
brokerage houses that operate on the Czech
capital market. By offering an excellent
Active Support Scheme and an attractive
partnership program, we contribute to our
clients’ constant growth.
Our team features highly skilled IT
professionals, with valuable trading experience
and an appreciated customer care
approach.
As BCC members, we aim to establish
successful partnerships consisting of:
• corporate product development together
with British IT companies, brokers or
financial institutions
• resale and local support of British financial
software
• relocation and outsourcing of Czech IT
specialists
• offering business solutions to British
companies willing to trade on the Czech
capital market
Total Solutions
Senovážné nám. 23
110 00 Praha 1
Tel.: 02/2414 2504
Fax: 02/2414 2505
E-mail: info@total-solutions.cz
www.total-solutions.cz
Beck & Pollitzer Engineering Ltd., one of
the UK’s leading outsourced engineering
services companies, has now established its
Czech Republic operation as a full service
trading organisation, specialising in:
• Machinery Installation and Relocation
• Engineering Projects
• Heavy Lifting
• Control Systems
• Printing Engineering
• On-site Maintenance
The Prague-based business has relocated
to new offices and will now trade as Beck
& Pollitzer Czech spol. s r.o. Its general
manager Josef Hart, who will be supported
by a contract engineering and administrative
team, will lead the company.
The announcement follows rapid growth
for Beck & Pollitzer’s Czech Republic
operation since it was first established two
years ago.
Beck & Pollitzer Czech spol. s r.o. now
has a very strong base of customers, many
of whom are installing new production
equipment and require on-going engineering
support and technical resources sourced
from within the Czech Republic.
Also, the office will be able to draw
on the global Beck & Pollitzer network
to support manufacturing customers
relocating production from the U.K. and
other countries to the Czech Republic.
The company has five U.K. depots and
operations in the USA, Germany, Poland
and Hungary. In France, it has formed a
joint venture company with Cochez (part
of the large Ponticelli Group) to service
French manufacturers requiring machinery
to be moved. It also has representation in
Japan.
Beck & Pollitzer Czech spol. s r.o.
Vinohradská 184
130 52 Praha 3
Tel.: 02/6713 2700
Fax: 02/6713 2701
E-mail: office@beck-pollitzer.cz
www.beck-pollitzer.cz
Value Added provides a full range of
services from a team of economists and
lawyers who have high level of executive
experience in privatisation, in managing
public institutions, banks, companies and
non-profit organisations, sales of property,
shares and companies, investment banking,
performing financial analyses and companies’
appraisals, claiming receivables,
environmental clean-ups and in applying
corporate, commercial, securities and
bankruptcy law.
The services provided by Value Added
are based on many years of experience in
privatisation and in the private consulting
area.
The service takes into account the
business, financial, legal and tax aspects of a
given problem. The company offers services
to public institutions, to investors seeking
investment opportunities, owners and
managers currently restructuring companies,
Petr âermák
Partner
Value Added, s.r.o.
investment banks and consulting companies,
banks providing and claiming company
credits, Czech companies penetrating
foreign markets, and entrepreneurs in the
area of venture capital.
Value Added, s.r.o.
Opletalova 37
110 00 Praha 1
Tel.: 02/2289 5318
Fax: 02/2224 6023
E-mail: valueadded@valueadded.cz
www.valueadded.cz
Waldeck Capital a.s.
Waldeck Capital is an independent
Investment Banking Boutique and was
formed to take advantage of the consolidation
of belch bracket investment banks
following the privatisation of the Czech
Banking sector. The firm focuses on Mergers
& Acquisitions, managed Divestitures and
Corporate Finance. Its Structured Finance
team specialises in debt and equity capital
markets, IPO’s, Private Placements and
Trade Finance.
Waldeck Capital is a subsidiary of Proxy
Finance, a regional Financial Holding
company with interests in Equity Trading,
Asset Management, Private Equity,
Insurance and Trade & Consumer Credit.
The team has considerable experience in
the Czech domestic market and Slovakia and
has an enviable track record in transaction
execution covering Corporate Finance,
Mergers and Acquisitions and Private
Equity. The founding and senior partners
of Waldeck Capital, the most of whom are
native Czech and Slovak speakers, have
extensive international experience, having
worked or studied in London, Paris, New
York, Washington and Amsterdam.
The principals of the firm have advised
on a wide range of transactions; from
banking, leasing, hair care, power generation
and privatisations to shoe manufacturing,
printing and software development
companies. The principals have advised
international clients on M&A and Corporate
Finance and general advisory services where
6
F O C U S M A Y 2 0 0 2

Introducing New Members
the parties involved are household names
such as L’Oreal, CEZ, P&O, Ralph
Lauren, ABN-AMRO Bank, Sheraton, GE
Capital & National Grid, to name a few.
Milan Ganik, joint Managing Partner
of Waldeck Capital, is a board member of
the EastWest Institute, a public policy think
tank that diffuses tensions and conflicts
that threaten geopolitical stability whilst
building democracy based on free enterprise
and prosperity.
Thomas Smit, a veteran of more than
30 years experience in Investment Banking
in G7, Emerging Markets and Transition
Economies is a champion of the values of the
Financial Services Authority, demanding
transparency, compliance and corporate
governance. As a result, Waldeck Capital
works closely with the City of London
Corporation and The City of London
where they maintain excellent relations
with International Financial Institutions.
The firm’s partners are highly regarded
in the regional business community.
Waldeck Capital a.s.
Anežská 10
110 00 Praha 1
Tel.: 02/2189 2480
Fax: 02/2189 2460
E-mail: postmaster@waldeckcapital.com
www.waldeckcapital.com
Club restaurant will surely satisfy all your
requirements. You can choose from a wide
range of traditional Czech or international
specialities. An ideal place to meet over
a cup of coffee or tea is the Klimt Café,
offering a wide assortment of pastries,
cakes and ice-cream sundaes.
The first indoor kart-arena in Prague
and the Relax Centre, with its wonderful
view of the Prague Castle, further underline
the aforementioned qualities of the Hotel
Diplomat.
Our determination to constantly improve
the level of services provided at the hotel is
best reflected by the newly reconstructed
rooms and the planned redevelopment of
the Relax Centre.
Hotel Diplomat
Evropská 15
160 41 Praha 6
Tel.: 02/9655 1111
Fax: 02/9655 9114
E-mail: m.novak@diplomatpraha.cz
www.diplomat-hotel.cz
Prague Diamond 2000, s.r.o.
Maiselova 21
110 00 Praha 1
Tel.: 02/2481 1011
Fax: 02/2481 1012
E-mail: mirzayeva@pd2000.cz
www.anfy.cz/pd2000
Teamconsult stands for top quality in
executive search and more:
• We are here to help our client, not to
promote our image. Although we specialise
in executive search, we offer the full
package – including all the support staff
you may need.
• We work with our clients as well as
candidates on a long-term basis. In this
way, we can better understand the culture
and requirements of our clients as well
as the personalities and skills of our
candidates.
Hotel Diplomat, managed by Vienna
International Hotels and Resorts Co., has
been successfully operating in the Czech
market for more than ten years.
The hotel itself is located in the
diplomatic quarter, near Prague Castle,
and is popular thanks to its close proximity
both to the airport and to the city centre.
We offer accommodation in 398 superior
rooms and suites. Three floors are reserved
for non-smokers. Special barrier-free rooms
are available for our disabled guests.
All superior rooms and suites are
equipped with air-conditioning, satellite
TV, Pay-TV, radios, data ports and minibars.
In addition, we offer several above-standard
features such as voicemail, tea and coffee
making facilities and 110/220V electrical
sockets, normally available only at five-star
hotels.
Extensive conference premises (over
1,000m 2 ) represent a big advantage of the
Hotel Diplomat. In total, we can offer you
16 different-sized rooms for up to 820 guests.
Whether it is an official business lunch
or a private candlelight dinner, our CD
Biggest diamond, jewellery and watch center
in Central Europe.
Mother company – LLD Diamonds
(Israel) – multibillion syndicate owning
diamond mines in South Africa, diamond
polishing and jewellery factories in Israel
and Belgium. Prague Diamond offers a wide
variety of jewellery with natural diamonds,
sapphires, emeralds, rubies, garnets, pearls
and other semi – precious stones in white
and yellow gold, and platinum.
In Prague Diamond goldsmith’s workshop
the customer can have their jewellery
cleaned, repaired, resized. Eventually they
could place an order for jewellery to be
made according to their taste or as per
personal choice from our catalogue. At
Prague Diamond we sell loose diamonds
for investment purposes. All diamonds are
accompanied by GIA certificates, issued
either in New York or Antwerp. We also
sell watches, such as Tag Heuer, Fendi,
Tissot, Gucci, Calvin Klein, Esprit.
Our main shop is at 21, Maiselova Str.
The entrance to the shop is a replica of a
diamond mine. Here you can find 3 cinema
rooms where films about diamonds in 18
languages can be seen. Visitors can also
admire the goldsmith’s work and see an
exhibition of tools used to cut, polish and
facet the diamonds.
Experienced personnel, V.I.P. reservations
available, Excellent service.
Oliver Schmitt
Managing Partner
Teamconsult s.r.o.
• Our client base consists predominantly
of foreign investors in the Czech Republic.
• Finding the first two or three candidates
is not enough. We identify all potential
candidates and select 3 – 4 whose personalities
and skill sets best meet our
client’s requirements.
Ilona Chvostkûviãová
Partner
Teamconsult s.r.o.
• We offer a range of additional services
(systemic coaching in English, Czech
and German, training, assessment centres,
management audit).
• We are successful and we know it.
Therefore, our fees are success-based. We
have been relying on our success since
1993.
Teamconsult s.r.o.
Italská 2
120 00 Praha 2
Tel.: 02/2251 3071, 2251 2081
Fax: 02/2425 3123
E-mail: info@teamconsult.cz
www.teamconsult.cz
F O C U S M A Y 2 0 0 2
7

Legal Corner
Czech case law – validity of lease contracts of non-residential premises
The lease of non-residential premises in business practice is in common
use. Nevertheless, one may often come across lease contracts that are
invalid due to various reasons. We would therefore like to present, in
Is your lease contract valid
the light of the Czech case law of recent years, a brief overview of the
basic rules – the violation of which often causes this invalidity.
The basic regulation that governs the lease and sublease of nonresidential
premises is the Act No. 116/1990 Coll. (hereinafter the
“Act”), which is in relation of specialty to the Civil Code.
The obligatory terms and conditions of a lease contract, the absence
of which renders the contract void, are as follows:
(i) a description of the subject matter of the lease,
(ii) statement of the purpose of the lease, which has to be in accordance
with the purpose for which the leased non-residential premises
have been designated,
(iii)specification of the amount, maturity (due date), and method of
the rent payment,
(iv)written form,
(v) approval of the local Municipal Authority (was required prior to
the conclusion of the lease contract on non-residential premises
designated for carrying out business and services – until December 3,
1999).
1. The Subject Matter of the Lease
The subject matter of the lease, i.e. the leased non-residential premises,
must be described sufficiently clearly and in a way excluding any
confusion.
2. The Purpose for Which the Leased Premises Were designated
The Act in section 3, subsection 2, provides that non-residential premises
are leased for the purpose for which they have been designated. This
specification is defined in the occupancy permit, the building permit,
or the decision on change in the use of a building (see, for instance,
the decision of the Regional Court of Hradec Králové, Ref. No. 21 Co
32/98: “When reviewing the invalidity of the contract on lease and
sublease of non-residential premises according to section 39 of the
Civil Code, the court bases its answer to the preliminary question
regarding the purpose for which the building or its part were designated,
on the occupancy permit, the building permit, or the decision of the
Building Office on change in the use of the building. The court cannot,
on the basis of its own judgement, assume that the purpose for which
the building or its part was designed to be built can be determined on
the basis of its actual use for any other purpose than stipulated in the
of occupancy permit, the building permit, or the decision on change
in the use.”)
However, the case law allowed a valid lease of non-residential
premises for the purpose that contains features outside the scope of its
building designation if these features cannot be separated from the
purpose of the lease. This is evidenced, for instance, in the decision of
the High Court of Prague, Ref. No. 2 Cdo 34/92: “The Section 3,
Subsection 2, of the Act No. 116/1990 Coll., does not exclude nonresidential
premises from being a subject of a valid lease for such a
purpose which is in accordance with the building designation and at
the same time has certain features which are outside the scope of the
building designation. The required conformity of activities with the
building designation of the leased premises exists provided that the
activity carried out in the course of the operation of the sale gallery
prevails over other activities, which are carried out on the leased
premises.”
3. The Specification of the Amount, Maturity, and Method of Payment
of the Rent
A frequently recurring defect in lease contracts rendering them invalid
is insufficient and unclear stipulation of the amount of the rent.
This usually concerns such cases when the lessor and lessee arrange
for a flat amount for the use of the leased premises, which includes the
rate of rent as well as the payment for some services rendered in
connection with the lease (e.g. electric power supply, security guard,
etc.). For this, see the Supreme Court decision, Ref. No. 1 Odon
98/97: “If the “rent” is set as a fixed amount per square area unit and
the amount includes the payment for the electric energy supply, water
rate, sewage charge, heating, security guard, insurance, and cleaning
without specifying the amount representing the rent and the other
amounts representing the payment for the energy and additional
services, it is necessary to conclude that such a contract lacks prescribed
terms and conditions, as it does not specify the amount of the rent,
and therefore it is null and void.”
It is also necessary to pay attention to the stipulation of the rent
maturity (the date and period) and the method of payment (whether
by bank transfer or otherwise).
4. The Prior Approval of the Municipal Authority
Prior to one of its amendments effective as of December 3, 1999, the
Act provided that prior approval of the Municipal Authority (formerly
National Committee) was necessary to conclude the lease contract, the
subject of which were the premises designated for the running of
business and services. The Act provided a fiction of granting this
approval if the Municipal Authority did not make a decision within a
15-day period after the delivery of the application.
Although this provision is currently ineffective, there still exist
many contracts, which were concluded prior to December 3, 1999, and
therefore were subject to this condition.
According to the case law, which had been constant until last year,
the absence of the approval of the Municipal Authority rendered the
lease contract void. For this, see the Supreme Court decision, Ref. No. 2
Cdon 1928/97: “If the City/Municipal Authority granted the approval
of the lease of non-residential premises designated for the running of
business and services prior to the lease contract coming into force, i.e.
before the date on which the lease was to arise, but after its conclusion,
the approval cannot be considered as preceding, and such contract is
invalid pursuant to section 3, subsection 4 of the Act No. 116/1990
Coll.”
In its interpretation, the case law concluded that the prior approval
of the Municipal Authority was necessary also when the subject matter
of the lease was a building as a whole, if having as its part the premises
designated for the running of business or services, even though such
rental relationship was not governed by the Act, but merely by the
Civil Code. For this, see the Supreme Court decision, Ref. No. 26 Cdo
306/2000: “Although the lease contract, the subject matter of which is
a real estate (as a whole) containing non-residential premises designated
for the running of business and services, is not governed by the Act
No. 116/1990 Coll., on the lease and sublease of non-residential
premises, but is governed by the provisions of the Civil Code on lease
contract, such contract required a prior approval of the Municipal
Authority. This approval was also necessary if the municipality was the
lessor (in the framework of exercising its proprietary rights).”
Last year, the Supreme Court, in one published case endorsed a
different opinion as the absence of the prior approval is concerned and
in its decision Ref. No. 28 Cdo 1364/2001 stated that the non-giving
of prior approval does not have to cause the invalidity of the lease
contract: “The conclusion on the invalidity of the contract on lease of
non-residential premises for the lack of the prior written approval of
the Municipal Authority is in contradiction with the principle of
equality of participants in the civil proceedings. The Court shall take
into consideration this circumstance also in such a way that the claim
of the lessor invoking the eviction of the non-residential premises for
the stated reason shall be dismissed.”
The reasoning of this decision of the Supreme Court, however, is
not entirely convincing and the question remains whether the decision
will change the view of this issue by lower courts. In any case, it is
necessary to advise everyone to be very cautious
in the evaluation of the lease contracts concluded
prior to December 3, 1999.
Pavla Přikrylová
Partner
PETERKA, LEUCHTEROVÁ & partners v.o.s.
8
F O C U S M A Y 2 0 0 2

Chamber People News
Jane Townsend, (40) has been appointed the
new Managing Partner of Allen & Overy’s
Prague Office, which is celebrating its 10th
anniversary this year. In her new position,
Jane will be responsible for the continued
dynamic expansion and growth of Allen &
Overy within the Czech Republic and internationally.
Jane graduated from Oxford University
in 1983 and was admitted as a Solicitor in
England and Wales in 1986. Before joining
Allen & Overy in 1995 (and becoming a partner
in 1998) she worked for Frere Cholmeley
Bischoff in London and also in Dubai. Whilst
in Allen & Overy’s Dubai office, Jane worked
on company and business acquisitions and
disposals, reorganisations and IPO’s. In
addition she also advised first Coopers &
Lybrand and then the merged firm of
PricewaterhouseCoopers in relation to
the implementation of their merger in eight
jurisdictions throughout the Middle East.
Jane is married and comes to Prague
together with her husband and three children.
Nic Bottomley (26) has joined Allen &
Overy’s Prague office as an associate. He will
work on international capital markets and
banking transactions.
Nic graduated from Nottingham University
in 1997 and was admitted as a Solicitor in
England and Wales in 2000. During his
training contract he worked in both the
Banking and International Capital Markets
departments of Allen & Overy’s London office
as well as in the Prague office working on a
variety of corporate, banking and derivative
transactions. He has also spent time on
secondment at Deutsche Bank AG working
primarily on emerging markets and credit
derivative structures.
Roman Ray Straub has been appointed the
general manager of the new design hotel in
Prague – andel’s hotel Prague – which will
open in June 2002. Prior to coming to
Prague, Roman Straub had been managing
the Le Meridien hotel at Beverly Hills, USA.
His career in the Czech Republic dates back
to the years 1994-1996, when he worked in
Prague as the sales & marketing director in
the pre-opening office of the Don Giovanni
hotel and opened the hotel in 1995.
Straub graduated from the Hotel Management
University, CERIA in Bruxelles, Belgium.
Then he went through his training periods in
Bruxelles, in Cameroun in Africa, and Miami
Beach in Florida.
Besides his native language – German – he
speaks French, English, Italian, Spanish, and
some Portuguese and Dutch.
In his spare time, he likes sports – skiing,
biking, jogging, hiking, and sailing. He is also
a movie fan and loves travelling around the
world. Among his other hobbies are reading
and his family.
HANEX GROUP announces the appointment
of Ryan Brown to its Commercial Department.
Ryan was educated at Newcastle University
and the College of Estate Management. After
leaving University he attended the Royal
Military College Sandhurst, and was commissioned
into the Royal Regiment of Fusiliers.
Ryan has been involved in Real Estate for the
past eight years working both within the
private sector and as a civil servant. For the
past two years he has held the position of
Business Manager of the Karlin Real Estate
Group.
In his spare time Ryan enjoys rugby,
climbing and target shooting and of course is
grappling with Czech to appease his new wife.
At the beginning of this year Petra Kraiczek
became a part of Ernst & Young’s team in
the Czech Republic. In her position as tax
manager, she will co-ordinate Ernst & Young’s
activities in the area of tax services for foreign
companies active on the Czech market.
Petra came to the Prague office from
Ernst & Young in Düsseldorf, where she had
been working in several positions, from tax
assistant to a senior position, from October
1994. She served German subsidiaries of large
international firms. She received the licence
as a tax advisor in March 1998 and continued
as a tax manager from January 2000. In the
Prague office she will provide first quality tax
services for international companies – with a
focus on German speaking ones.
Petra studied Economics at the University
of Münster (Germany). During her studies
she focused primarily on tax and auditing.
Her hobbies include travelling and reading.
Jiří Teichmann has joined the Czech office of
Ernst & Young as a senior tax manager. He
previously spent six years with the Prague
office of PricewaterhouseCoopers as a tax
department manager specialising in telecommunications
and e-business.
Jiří is a graduate of Charles University’s
department of mathematical cybernetics.
In 1995 he became a member of the Czech
Chamber of Tax Advisors and joined
PricewaterhouseCoopers. He became a tax
manager in 1998.
In his free time he likes to swim and cycle,
and he enjoys listening to music.
Václav Jerman, a leading Czech expert in the
area of telecommunications law, has joined
White & Case from the German firm Beiten
Burkhardt Mittl & Wegener. In the course of
many years of experience, he has gained
extensive expertise in the areas of corporate
law, corporate mergers and acquisitions and
public law. He has worked for a wide range of
companies and provided legal advice relating
to all aspects of the telecommunications sector.
He now leads a group focusing on legal
consulting for the telecommunications sector.
Boris Brázdil is the second lawyer this year to
attain the position of counsel at White &
Case, Feddersen, specialised in the legal issues
surrounding real estate. He is an expert in
corporate law, antimonopoly law and mergers
and acquisitions. He studied law at Charles
University in Prague and at German universities
in Regensburg and Saarbrücken.
Are you “News for the Chamber” Let us
know about your arrivals, promotions or
departures. Call Lucie at tel.: 02/2483 5165, or
e-mail: publications@britcham.cz
F O C U S M A Y 2 0 0 2
9

EU News
Visit of Commissioner
Günter Verheugen to the Czech
Republic on 11–12 April 2002
The program for the visit was very intense.
The Commissioner met with Prime Minister
Zeman, Chairman of the Chamber of
Deputies Klaus, as well as leaders of political
clubs and committee of European integration
at the Chamber, Deputy Prime Minister and
Foreign Minister Kavan, Deputy Prime
Minister Špidla, Chairman Pithart and
prominent Senators at the Senate. He also
met informally with some other political
leaders at dinner on Thursday 11. The program
included a visit on Friday 12 to South Bohemia,
for a meeting of regional representatives and
a public debate in České Budějovice.
In Prague, Mr Verheugen delivered two
important speeches. The first one, on
Thursday at Charles University, was a major
political statement on the significance of
European integration for post-war reconciliation,
including a discussion on the Czech
presidential decrees. The second one delivered
on Friday at the University of economics
(where the Commissioner was awarded a
doctor honoris causa) covered the challenges,
in particular in the economy, which the
accession of the Czech Republic has to face.
For text on the speeches see www.evropska-unie.cz
Candidate countries’ farmers better
off in EU, says Commission study
A study published by the European
Commission today concludes that membership
of the European Union will significantly
improve the prospects for farmers in the
candidate countries, without creating major
market imbalances for an enlarged Union.
Four different policies have been considered.
The simulation shows that even under the
most pessimistic restructuring scenarios, EU
accession will have positive effects on the
income of farmers in the candidate countries.
The report also underscores the Commission’s
view that immediately paying 100% of direct
payments would create significant social
distortions and inequalities and would hamper
the necessary restructuring, given that farmers’
income in the candidate countries could
more than double (for details see below). The
study underscores that the positive effects of
EU membership can only be reaped if the
necessary restructuring to meet EU production
standards will be made.
According to the report, even the
application of EU market measures such as
intervention with zero direct payments is likely
to generate an increase in farm income of
around 30% for the eight Central and Eastern
European candidate countries (CEEC-8)
in 2007. Increases would be particularly
significant in the Czech Republic (+60%),
Latvia (+59%), Estonia (+55%), Slovakia
(+45%) and Poland (+35%).
Commenting on these findings, Commissioner
Fischler said, “the conclusions are
clear. Being in is better than being out. EU
membership will bring significant benefits to
the farmers from the candidate countries. But
this study also sends a plain message. There is
not such thing as a blank cheque. In order to
reap the benefits of EU membership the
candidate countries have to meet EU
production standards. To achieve this,
they have to make the necessary efforts to
restructure, especially in the livestock sector.
This is why we have proposed reinforced rural
development with targeted measures such as
support for semi-subsistence farms.
“Prospects for staying outside the EU are
poor, particularly for the beef and dairy
sector. This study backs the Commission’s
strategy. It is obvious that with our proposals
for direct payments (25%-30%-35% from 2004
to 2006) the situation for farmers in all
candidate countries will be more favourable
than remaining outside the Union. This study
shows that a certain amount of direct payments
are necessary to stabilise incomes. But a low
level of direct aid support is enough to ensure
that all CEECs experience positive income
effects as a result of enlargement.
On the other hand, the report makes clear
that 100% direct aid would lead to a situation
where an average Hungarian or Czech farmer
would all of a sudden receive more than
double the average national wage. This
would undermine incentives towards labour
restructuring in countries with small farm
structures and would create social distortions
and inequalities.”
The conclusions of the study
1. Poor prospects for farmers in the CEECs
outside the EU.
2. A low level of direct aid support is enough
to ensure that all CEECs experience positive
income effects as a result of enlargement.
3. 100% direct aid lead to very strong income
effects, which could undermine incentives
towards labour restructuring and create
social distortions and inequalities.
4. CEEC farmers can grow and be competitive
in the single market.
5. Enlargement will not create major market
imbalances for an enlarged Union.
The full study is available on DG Agriculture’s website:
http://europa.eu.int/comm/agriculture/publi/reports/
ceecimpact/index_en.htm
Source: European Commission.
Czech Republic gets of£cial go-ahead
for SAPARD Aid
On 16 April, the European Commission
officially handed over to Prague the management
of the EU SAPARD pre-accession
program for agricultural and rural development
in the Czech Republic. The value of this
financial assistance amounts to 22,4 million
euros annually in the 2000-2006 budgetary
period. For the Czech Republic, seven
measures make up the program:
• Investments in Agricultural holdings
• Improving the processing and marketing of
agricultural and fishery products
• Improving the structures for quality controls
of foodstuffs and for consumer protection
• Land improving and re-parceling
• Renovation and development of villages
and rural infrastructure
• Development and diversification of
economic activities providing for multiple
activities and alternative income
• Technical assistance
For more info about this programme, see www.mze.cz,
www.mmr.cz
The Corinthia Towers in Prague
completes another refurbishment project
Over the past five months work has been
taking place on six floors of this 544-room
landmark 5 star hotel in the capital of the
Czech Republic. A total of 176 rooms have
undergone complete refurbishment including
new carpets, wallpaper, furniture, bedspreads,
curtains and decoration. The refurbishment
also included the corridors and lifts servicing
these floors, where all the carpets, lighting
and decoration have been replaced.
This project is a continuation of the
transformation program, whose first step
was completed in May 2000. All public areas
including the 4 international restaurants,
lobby and the Corinthia Conference &
Events area including 22 meeting rooms
with a capacity 1,300 people and the
Executive Club Floors were completed.
The next phase of the refurbishment will
include the Health & Fitness Centre that will
be completely modernised in the summer
months. The remaining rooms of the hotel
will also be completely refurbished within
the next 18 months.
The project has been completed under
the project management of Quality Project
Management Ltd a subsidiary of the
Corinthia group of Companies. The interior
design was by Mr Joshua Judd of GA
Design London. This part of the project cost
USD 6 million further to the USD 8.5 million
spent on the first part of the project.
This now makes the hotel one of the
leading 5-star hotels in Prague. The hotel is
a superb venue for Conference & Incentive
travel as well as for the leisure traveller. The
hotel is located within 1 kilometre from the
city centre and offers the highest standards
of comfort throughout. The Corinthia
Towers is characterised by quality, style and
the closest attention to guests’ needs.
Corinthia Hotels International also
operates the 4-star, 450 room Corinthia
Panorama in Prague, Czech Republic.
10
F O C U S M A Y 2 0 0 2

Events Round-up
Focus Group 26/3/02
The speakers for this Focus group were František Kopřiva of
HSBC bank, Michal Tomášek of Komerční bank and Petr Tomek
of Raiffeisen bank.
Mr Tomek began with a discussion of the strength of the Czech
crown (CZK), which has appreciated against the euro by around
12% since 2000. Reasons for this include the recent privatisations
Effects of the Euro
and bond market investments (which attract higher yields than EU
paper). Expectations for the CZK rate are for further strengthening
in the future. Taking this together with a low inflation outlook
means that there is the likelihood of downward movement in
interest rates in the near future, closer to the eurozone level.
Mr Tomasek discussed the Czech Republic’s entry into the euro.
He began by indicating that the euro already has a significant
influence on this country’s economy eg. around 60% of foreign
currency transfers are in euros. Upon accession to the EU, the
Czech Republic will join the EMU and after a further 2 years it
is possible that it may join the euro. This means that the single
currency could be adopted as early as 2006. More realistically,
however, the Maastricht requirements with regard to matters such
as the level of public debt would mean that a more likely date
would be later; maybe 2008-2010. He also added that certain
transitional measures, such as those on the free movement of capital
and labour, might have some affect on the date of adoption of the
euro.
Finally, Mr Tomášek explained some of the positive benefits of
being outside the euro, such as the ability of the central bank to use
interest rate and exchange rate tools to influence the economy. These
The British International
School, Prague
should be useful for increasing the Czech GDP per head to a level
closer to the EU average in a period prior to adoption of the euro.
Mr Kopřiva reinforced the positive benefits of remaining
outside the euro for some period after joining the EU. He then
went on to discuss the issues related to euro loans. He explained
that these loans are attractive to companies that have income in
euros because the loan acts as a natural hedge against exchange
rate fluctuations. Another potential benefit is the lower interest
rate of euro loans. However, he added that this differential to
Czech rates is now below 1% and is no longer such a good reason
when one takes into account the risk of exchange rate fluctuations.
The meeting finished with some discussions concerning the
entry level of the CZK into the euro and the National Bank’s
policy of intervention into the market to control the appreciation
of the CZK.
A
TC International is a company with a great deal of
experience in providing training on International
Accounting Standards up to and including partner and
finance director level. They have been involved with the staff of
the IASB in a joint project to produce training material on
International Accounting Standards.
International
Accounting Standards
In conjunction with the British Chamber of Commerce they are
running a series of workshops in Central Europe to explain the
impact of the proposal and provide a brief introduction to
International Accounting Standards.
The first of these took place at ATC International office on
Tuesday, 19 March 2002. The three hour workshop introduced
the background to the adoption of IAS within the EU and its
importance in other markets. It then went on to explain the
conceptual framework that underpins the standards and concluded
with an examination of IAS 1, Presentation of Financial Statements.
The workshop stressed that the new legislation is a huge issue
for all 7,000 plus listed companies within the EU and for listed
companies of those states that are seeking membership. Companies
must not underestimate the scale or complexity of the task before
them: they need to start preparing now to facilitate a smooth
transition.
The next IAS Workshop will be on IAS 12, Income Tax and will
be held on Wednesday, 4 June.
On April 25, some of our members gathered at the Intercontinental
Hotel for a Focus Group meeting where HR
specialists from Andersens presented the latest developments
in the field of human resources.
Katy Spink, Chris Debner and Radek Dyntar focused their
presentations on a recent Andersen’s survey, whose aim was to
compare the opinions of several Czech companies’ representatives
on the current quality of the HR management in their companies.
The results show that Czech HR professionals believe that their
activities are effectively supporting business performance. Retention
is the top scoring area, followed by recruitment.
Leadership is rated least favourably. The negative assessment
of leadership is even more pronounced in companies with a larger
number of employees, and in finance and technology, media and
communication firms. The results were discussed and questions
were raised by members of the audience.
12
F O C U S M A Y 2 0 0 2

Events Round-up
The beautiful and inspiring atmosphere
of the Bethlehem chapel, tunes by
Dvořák, Chopin and Mozart performed
by the renowned Stamic Quartet and
accomplished pianist Igor Ardašev – in
what better way could we celebrate our 5th
A Chamber was
born ...
birthday Over 300 guests joined us to
mark the anniversary of the Chamber at
a concert followed by a reception in
Náprstek restaurant.
The birthday celebration was a great
opportunity to reflect on the development
of activities and the character of the Chamber.
The range of activities has broadened
significantly over the 5 years of the Chamber’s
existence. Regular workshops, seminars,
discussions on business issues, lunches
with key personnel from political and
economic scene, business mixers, social,
cultural and sports events – these are all part
of the chamber’s busy life. The Chamber
has become the first point of reference for
the newly coming businesses, helping them
better understand the dynamics of the
Czech market and integrate in the local
environment.
The progress of the Chamber, its young
and dynamic spirit and fresh approach
is reflected in the new logo, which was
launched at this special occasion.
In the enclosed anniversary brochure
you can see all the people who were
instrumental for the Chamber’s successful
development.
The concert could not have happened
without the kind support of British American
Tobacco, who became the main sponsor of
the concert, and co-sponsors Diners Club
and Prague Diamond.
New Day Activity Marketing held a
morning workshop in the lovely
surroundings of the Rasoi bar
on the 16 April. The event was very well
attended, with a large number of members
turning out to participate in lively sessions
on team building, problem solving and
communication.
Things kicked off with an ice-breaking
activity, where people formed pairs and
attempted to discover some interesting
facts about one another, which were then
presented to the group as a whole.
The aim of this was to make people
familiar with one another as well as making
them feel comfortable with the workshop.
There was also an unexpected result – the
discovery that we are an incredibly diverse,
well-travelled and talented bunch!
Several sessions then followed that involved
group exercises and summary discussions
covering learning points that had arisen
New Day Team
Building workshop
16 April 2002
from the activities. Topics covered included
an exercise to discover about the elements
of good communication (the attendees
identified many factors such as listening,
giving feedback and adopting a positive
approach) and a very productive session on
the skills required for effective problem
solving in groups.
At the end of the morning’s activities,
the attendees reviewed the objectives that
they had wished to achieve from the
workshop and commented on what they
had gained from the exercises. Everyone
agreed that the morning had been both
informative and useful.
During the morning, New Day also
presented an outline of their services.
These are broadly based around experiential
training and events, that help to develop
soft skills, in areas like management, team
working and communication. The courses
are also designed to emphasise something
that many of us lack in our everyday working
lives – some fun!
14
F O C U S M A Y 2 0 0 2

Events Round-up
The latest business mixer took place in the beautiful
surroundings of U Modré Kachničky II (‘at the Blue
Duckling’) on Michalská, Prague 1, which takes its unusual
name from the title of the original building where its sister restaurant
Business Mixer at U Modré
Kachniãky II, 23 April 2002
is sited. Members were welcomed by the manager, Otakar Žák,
who had kindly provided live music for entertainment and a very
enjoyable buffet selection of (not unsurprisingly) duck specialities.
In a break from the hectic socialising, there was an opportunity for
members to meet the new candidates for the board of the Chamber.
Martin Day from the Embassy’s commercial section introduced
the candidates who each were given the opportunity to present
themselves to the members. Speeches were given by (in no particular
order) Tereza Urbánková (from the Hilton); Robin Dubow
(American medical centre) Mark Neave (Allied Pickfords) and
Desmond Mullan (Volvo). Two other board candidates who
couldn’t be present to speak are Jan Grozdanovič of Seddons
Solicitors and Nick Davies of E&Y.
After the speeches, there was a prize draw from the names of
people who filled out the questionnaire about the chamber and its
services. The lucky winner was Yiorgos Palierakis of John Crane
Sigma, who won a return ticket to London sponsored by GO (the
low cost airline to London, Bristol and East Midlands).
Although an Irish tradition by origin,
St. Patrick’s Day was well celebrated
by the British and Czech community
at the mixer sponsored by our member
company New Europe Promotions. Was it
St. Patrick’s Day
the potential business partners that attracted
the large crowd, or the models presenting
clothes and fashion accessories (arranged
by Blumarine, roccobarocco and Moschino
by Olsson’s, hair and visage by Jacques
Dessange) It’s anyone’s guess. Another
possibility was the very attractive raffle
prizes.
The attendance as well as the program
was just as good as last year’s although one
of the novelties – the fashion show – was
the highlight of the night. We would like
to thank New Europe Promotions for
co-organizing this event with us and hope
that next year we can meet up at Legends
Bar for a third time.
16
F O C U S M A Y 2 0 0 2

Euro-Czech Forum News
Representatives of the Euro-Czech
Forum, the joint institution of the
chambers of industry and commerce
of Britain, France, Germany, Netherlands,
and Sweden, visited the European Commission
in Brussels and met Member of
European Commission for Enlargement
Mr Gunter Verheugen. The Euro-Czech
Forum handed over the “Euro-Czech Forum
Position Paper on State of Legal Business
Environment in the Czech Republic” to
Commissioner Verheugen.
The Euro-Czech Forum has identified
the most problematic areas concerning
the legal – business environment and is
suggesting reform solutions. The Euro-
Czech Forum critically assessed a haphazard
process of legislation making in the past
years, which makes the Czech legal
environment unstable. European investors
and businessmen united in the Euro-Czech
Forum are calling for a quick reform of the
bankruptcy legislation, complete reform
of the business law, radical reform of
commercial registers and changes in the
public procurement law. They also are calling
for the pursuit of balance between the
requirements posed by the accession process
on one hand and realistic possibilities of
the Czech economy and society on the
other hand in the areas of environmental
protection or labour law.
As Dieter Mankowski, member of
the Euro-Czech Forum Board (and the
representative of the Czech – German
Chamber of Industry and Commerce in
the Euro-Czech Forum) stated following the
meeting with Commissioner Verheugen
“the visit of the Euro-Czech Forum did not
intend to send any dramatic signals to
Prague. The Euro-Czech Forum together
with its member chambers has been talking
about the reform of the legal-business
environment for three years. Today, we
have found a common language with the
European Commission. We wish to see the
Czech Republic well prepared for EU
membership”.
On 19 April 2002 the Euro-Czech
Forum organised a follow-up to the meeting
with Commissioner Verheugen and opened
the new project “Agenda 2003”. In October
2002 the Euro-Czech Forum will hand over
to the new Government and Parliament a
detailed agenda of political, economic, and
legislative steps which should lead to a
Euro-Czech Forum initiates the reform of the legal
– business environment in the Czech Republic
proper reform of the legal-business
environment in the Czech Republic.
Chairman of the Euro-Czech Forum Board
Nils Silfverschiöld summed up the concrete
areas in which the Euro-Czech Forum
will propose solid recommendations.
According to Nils Silfverschiöld, “European
investors and business circles in the Czech
Republic united in the Euro-Czech Forum
will insist:
• That the reform of the bankruptcy
legislation is quickly finalised and tabled
as soon as possible to the new Chamber
of Deputies for approval
• That the Commercial Code is streamlined
and reformed in order to provide more
clarity and stability in its interpretation and
application. Specific recommendations
will be included in the “Agenda 2003”
• That the reform of commercial registers
takes place as soon as possible.
Regrettably, the Chamber of Deputies
postponed the debate on the Act on
registrars until after the elections
• That the Public Procurement Act excludes
Article 50 and that all public tenders are
transparent
• That a practical side of the implementation
of the Competition Act is further
increased, particularly in terms of speed
and quality. That the context of the
European market is taken steadily more
into account when the decisions of the
Office for the Protection of Economic
Competition are taken in the future
• That the process of the transposition of
EU environmental rules resembles only
de iure status quo in the EU and does not
include the norms under the discussion
in the EU Council and EU Parliament.
That environmental requests mirror
realistic opportunities of Czech companies
and Czech economy
• That Anti-Corruption measures are
strengthened in terms of the changes of the
Criminal Code and Police Investigation
and Prevention Procedures. Recent
proposals from the Supreme State
Attorney Benešová on the introduction
of Provocation have full support of the
Euro-Czech Forum”
According to Nils Silfverschiöld, ECF Board
Chairman, “these are the basic conditions
of European investors and business circles
united in the Euro-Czech Forum for their
further support of Czech accession to the
European Union”.
Jana Pelcová, ECF
Czech Investment
Incentives in practice
and the future 2002
A survey commissioned by PricewaterhouseCoopers
in association with CzechInvest
Please note that the results of the study are comparable
with those from the last year – published in the last issue.
Over 4 in 10 of investors in 2001 considered only
the Czech Republic as their investment location
Base: All new investors who answered
41%
26%
Only
the Czech
Republic
36%
44%
Poland
36% 38% 23%
Hungary
Slovakia
2001 2000
18% 21% 5 %
Eastern
Europe
in general
Base: All new and existing investors (N2001=53)
Germany
Production and labour costs are growing in importance
for investors, however “costs” in the Czech Republic
are not performing as well as before
Investment Incentives overall
Economic stability
Political stability
Production and labour costs
Corruption
5.0%
The size of the domest. market
3.8%
4.5%
Bureaucracy
4.1%
100% of investors received income tax relief
Base: All new investors Applied for Received
65%
Income tax relief for
a current taxpayer
39% 35%
61% 65% 39% 35%
30% 26%
9%
4%
Income tax relief
for a new taxpayer
Customs duty relief
Financial support for
the creation of new jobs
91% will use
all incentives
Financial support
for the re-qualification
of employees
7.5%
7.4%
7.1%
6.9%
7.0%
6.4%
7.0%
7.6%
6.9%
Telecommunications
6.9%
6.7%
Availability of qualified local management
6.9%
6.3%
Sufficient logistics and infrastructure
6.9%
6.3%
Land availability
7.0%
5.8%
Favourable tax climate
6.3%
5.7%
5.2%
2001 2000
Municipal Subsidies
18
F O C U S M A Y 2 0 0 2

Member Pro£le
Iwas born in New Zealand, where I
studied Economics and qualified as a
Chartered Accountant. In common
with a large number of young New
Zealanders I left for my “big OE”
(Overseas Experience). I spent six months
in the USA teaching children to sail at a
summer camp and travelling from the West
to East Coast. After visiting relatives in
London I came to Prague for an anticipated
two years. As it appeared as though I
would be here longer than anticipated, I
decided that I should continue doing the
extracurricular things I enjoy so I bought a
mountain bike, convertible sports car and
a half share in a two man racing dinghy.
What brought you to the Czech
Republic
Price Waterhouse offered me a position in
their Prague office for a two-year period way
back in 1992. I fell in love with Czech beer
and fried cheese so decided to stay longer.
Has opening in the Czech Republic
proved to be a successful move for your
business
Yes, since 1998 TMF Czech has doubled in
size each year to the current staff of 80.
What do you perceive to be the good
things about doing business in the CR
And the bad ...
People are well educated, with excellent
language skills and are willing to learn and
progress. The location of the Czech
Republic provides good access to neighbouring
central and eastern European
countries so it is a good base for central
European headquarters. However, I have
noticed that some people have difficulty focusing
on providing high customer service.
It is expensive to remove non-performing
staff after their three-month probation
period is over.
Where do you see the big opportunities
for British exports and investment here
Developing the service industry.
If you had your time in the Czech
Republic over again, what would you
do differently
Name: John Thorman
Position: Managing Director
Company: TMF Czech, s.r.o.
Marital Status: Single
Hobbies: Sailing, mountain biking, skiing
TMF Czech is in the process of opening an
office in Brno. If we could have started
over again, we would have started this
process earlier.
What do you think of the current
political and economic scene here at
the present time
It appears unlikely that one party will win
a majority during the June 2002 elections,
which could make it more difficult to get a
concensus on the final EU entry issues.
The recent strengthening of the Czech
Crown against the main trading currencies
is harming exporters. The rising trade deficit
is also a concern.
What makes business succeed in
the Czech Republic
Providing the highest level of customer
service at competitive prices.
What do you believe will be the main
impact on your business when the
Czech Republic joins the EU
The need for EU citizens to obtain permits
should become easier. After EU accession,
more small to medium-sized business may
come into the Czech Republic who would
hopefully require our services.
If you were to spend a weekend
anywhere in the CR, where would
it be and why
Český Krumlov. A beautiful, relaxing place
to wander around.
What is your favourite restaurant
in Prague
Ambiente Celetná for a reasonably priced
meal, where there is no mobile signal so
you can have an uninterrupted dinner. Or
Bellevue for an expensive night out with a
great view of Prague.
What is your idea of ideally spent
weekend
During a sunny weekend with moderate
winds, driving in my convertible sports car
to a sailing regatta. Then winning the
regatta.
What is your favourite Czech phrase or
Czech word
Jdeme do hospody!
What is the funniest thing that has
happened to you since you £rst
arrived in the CR
During a factory visit I provided my drivers
licence to the security guard as identification.
The security pass he gave me had my name
recorded as Mr Drivers Licence.
What three objects would you take
with you to a desert island
Sun glasses, suntan cream and a beach
towel.
Marriott International Hotels, Prague represented by three
properties: Prague Marriott Hotel, Renaissance Prague Hotel
and Marriott Executive Apartments hosted a concert evening at
the Renaissance Prague on Monday, 8 April for its clients.
The guest of the evening was one of the leading chamber
ensembles, The Stamic Quartet, playing works by W. A. Mozart,
Antonín Dvořák, and Bedřich Smetana amongst others.
During the evening reception, all of the invited guests had
the possibility to see the newly refurbished conference area.
In addition to completely changing the interior decoration,
the scope of work also included a completely new system of air
conditioning, heating and lighting, installation of new sound
system and more. A new Business Centre with the newest
technical equipment was also created.
The total number of meeting rooms increased by one to 14: the
total area available for meetings and conferences is now 1,081
square meters. The largest meeting room has 215 square metres
and its maximum capacity is 270 people. The entire conference
area can hold up to 1,000 people. Another novelty is the
installation of partition doors between two meeting rooms
which gives the hotel flexibility in offering either smaller or
bigger conference space. And last but not least the names of the
meeting rooms have changed. The Renaissance Prague Hotel is
known for its support of classical music (partner of the Prague
Symphony, the Prague Spring) and as a dedication to this field
the rooms bear the names of famous composers, amongst others
Dvořák, Mozart, Vivaldi, Smetana, and Verdi.
To organise your event here or simply to visit, please do not
hesitate to call the Event Booking Centre on 2288 1032–37.
F O C U S M A Y 2 0 0 2
19

Tax News
There’s glory for you!” “I don’t know
what you mean by ‘glory’”, Alice
said. “I meant, ‘there’s a nice knockdown
argument for you!’” “But ‘glory’
doesn’t mean ‘a nice knock-down
argument’”, Alice objected. “When I use a
word,” Humpty Dumpty said in a rather
scornful tone, “it means just what I choose
it to mean – neither more nor less.” (Through
the Looking Glass)
Lewis Carroll would have relished the
following example of the Czech tax system.
An amendment to section 24(2)(zi) of
the Income Tax Act, effective from 1
January 2001, appears to have been aimed at
preventing tax avoidance by arrangements
under which, for example, a person who is
not registered in the Commercial Register
as an entrepreneur might lend money at
interest to a Czech business, such interest
perhaps not being paid for a number
of years. Under the different tax and
accounting rules applying to the borrower
and the lender, the former could claim
a tax deduction annually for the unpaid
interest, but the latter could not be taxed
until it was paid.
The amendment supposedly has the
effect of providing that interest payable
inter alia to persons who are not “accounting
units” (which means companies and
entrepreneurs producing accounts whose
form is regulated by the Accounting Act) is
not deductible for tax purposes until it is
paid. This is where the problems start.
During 2001, it occurred to some tax
advisers that this provision must affect loans
made to Czech businesses by non-resident
persons, since, unless such persons have
registered a branch in the Czech Commercial
Register, they will not be “accounting
units”. Therefore, unpaid interest on
perfectly bona fide loans, for example from
a foreign parent company or bank, would
not be deductible. This interpretation of
the law was confirmed by the Finance
Ministry, though it seemed clear that such
was not the intention of the amendment. In
some cases this could result in significant
additional tax costs.
The Finance Ministry eventually agreed
to a partial solution put forward by the
Chamber of Tax Advisers. A number of
Czech double tax treaties contain a “nondiscrimination”
provision which states that
interest paid by a resident of the Czech
Republic to a resident of the other state
should be deductible under the same
conditions as interest paid to a resident of
the Czech Republic. The treaties with the
UK and the US are in this category, for
example. So, it was said, this means that
interest payable to such persons remains
deductible even if not paid – too bad, of
course, for those unfortunates who have
borrowed from lenders not resident in
favoured states, and for borrowers such as
Czech branches of foreign companies,
Abandon all hope, you who enter here
which are not themselves residents of the
Czech Republic, and therefore cannot
benefit from the treaty provisions.
Such problems are familiar enough to
tax advisers, and not unique to the Czech
Republic. Anti-avoidance legislation, more
a cluster bomb than a cruise missile, has a
nasty habit of hitting the wrong targets. If
the story ended there, it would be nothing
out of the ordinary – but there’s more to
come.
Here some technical background is
necessary. Section 24 of the Income Tax
Act deals with tax deductible expenses;
non-deductible expenses are dealt with in
section 25. Up to 2001, section 24(2)(zi)
allowed a tax deduction for certain specific
expenses which would otherwise be
disallowed under section 25. But no
amendment was made to section 25: the
amendment consisted only of the insertion
into section 24(2)(zi) of words to the effect
that deductible expenses include interest
paid to persons who are not accounting
units (etc). It does not take a Lord Denning,
probably not even a Rumpole, to work out
that it is hard to justify the disallowance of
an expense on the basis of a law which says
that something is deductible. Taken literally,
in fact, the effect of the amendment is the
exact opposite of that intended: it is saying
that interest which otherwise would not be
tax deductible becomes deductible when
paid to the specified lenders.
As if that were not enough, on closer
examination the “solution” accepted by the
Finance Ministry looks shaky. The point of
this non-discrimination provision is to put
borrowings from foreign lenders on the same
footing as those from domestic lenders. It
achieves this by saying that interest paid to
a resident of the other state is generally
deductible under the same conditions as if
it were paid to a resident of the Czech
Republic. Accepting for a moment that
section 24(2)(zi) does have the effect alleged
by the Finance Ministry, it is hard to see
how it is discriminatory. Such interest will
be deductible if the lender is an accounting
unit; some Czech residents are accounting
units and some are not; the same goes for
non-residents: so where is the discrimination
The conditions under which the interest is
deductible are the same for both resident
and non-resident lenders. Of course,
in practice, this provision will tend to
discriminate in the case of foreign lenders,
but such discrimination is not a necessary
result of the provision, and it is therefore
hard to see how a borrower could rely on
the treaty provisions. However, we may as
well accept what crumbs of comfort the
Finance Ministry has to offer.
The lessons of this little example are
both specific and general.
First, anyone who still has a problem
with section 24(2)(zi) has an argument
against the tax authority that the interest is
in fact deductible. On the mere words of
the law, this almost incontrovertible: but
of course in reality the tax authority will
probably refuse to budge on the issue,
in which case there are the unappealing
alternatives of conceding or getting
entangled in the Czech tax appeal system –
which requires patience and strong nerves.
Secondly, there is in theory at least an
opportunity to exploit the literal meaning
of the law to obtain a tax advantage. For
example, since the law says that such
interest is deductible when paid, it might
be possible to pay five years’ interest in
advance and claim the entire amount as a
tax deduction in the year of payment, even
though for accounting purposes it would
be necessary to treat it as a deferred expense.
However, it would be a bold, not to say
aggressive, taxpayer who would embark on
such a project.
Finally, this is a microcosm of what is
wrong with the tax and legal structure in
the Czech Republic. The law has been
amended without sufficient thought as to
the effects of the change; the words of the
amendment have the opposite meaning to
that intended; the solution to the unexpected
problem is at best partially effective and
at worst invalid; and there has been too
ready acceptance of the Finance Ministry’s
debatable, not to say untenable, interpretation
of the law. What is desperately needed
is an appeals system which is effective and
timely, coupled with a robustly independent
stance on the part of the tax advisory
profession.
Note: The views expressed above are the author’s;
professional advice should be sought before taking
decisions on any matter referred to.
Euan Tawse, KPMG
20
F O C U S M A Y 2 0 0 2

Susie’s Corner
Q & A
Rumour has it that Hong Kong boasts a grand total of 30
Czechs, including adults and their assorted offspring. I’m
not yet sure if my husband (Hungarian from Slovakia with
Czech citizenship and running CzechInvest’s new South East Asia
operations) and I (English with Czech residence), both fresh off
the boat, are incorporated within that figure. However, there’s
certainly something to be said for being a member of a distinctly
exotic national group from a little known part of Europe. We’re
already privy to the one source of imported Central European
goodies, have snorted in disgust over the outrageous cost of
Pilsner Urquell in the supermarkets and are pleased to provide a
fresh source of dinner-party conversation.
Letter from Hong Kong ...
It’s almost impossible to think of two more dissimilar places
than this Special Administrative Region clinging to the southern
fringe of China and the history-haunted Czech Republic. Imagine
squeezing 70 percent of the Czech population into a forest of
tower-blocks in a roughly 1,000 km 2 region – 60 percent of which
has been given over to national parks and much of which is covered
by the glittering, polluted water of the South China Sea and the
Pearl estuary. Swap labyrinthine mediaeval and baroque passageways
and lanes for angular, mirrored sky-scrapers wrapped in bamboo
scaffolding, your softly rolling hills dusted with plum orchards for
jagged peaks moist with shrubby jungle and buzzing with cicadas
and those Bohemian grannies weighed down with shopping for
intently hurrying, immaculately-dressed Chinese and European
business people, rushing to reach the office by 9am.
However, despite the sometimes suffocating humidity, hundreds
of dramatic islands and buzzards swooping past one’s office window
on the thermals, many Brits will probably appreciate the number
of similarities that have extended past 1997’s handover. Not only
does English remain one of the two official languages spoken
here but double-decker buses still ply the streets among the ranks
of scarlet taxis. Czechs, too, will recognise the trams, although
Hong Kong’s home-grown version is also double-decker, intimately
narrow and as luridly embellished with advertisements as Prague’s
No 6, 18 or 22.
Enter the British Council and you could be in Prague … bar the
distant harbour view and vicious air-conditioning. And I’m pleased
to reassure you that flat-hunting is as much a challenge as anywhere
else in the world, although crisp dead cockroaches and rising
damp replace seventies chipboard furniture and rumbling boilers
as local hazards. Although at least one only has to hunt flats
themselves, rather than having to track down a co-operative estate
agent in the first place.
To date, I can report that Park ‘n’ Shop is the local Tesco,
stocking delectable Waitrose goodies alongside live eels and glass
cases of quivering frogs waiting for the butcher’s knife to descend.
Kennedy Town noodle factories, wet markets selling fresh fish,
greens and thousand year eggs and temples decorated with
crimson incense coils replace crenellated breweries, baroque
churches and smoky cafes. And – of course – I, just as I swore
nearly six years ago on arrival in Prague, am
absolutely determined to get down to learning
Cantonese …
Susie Lunt
What do you expect the outcome of the elections
to be and also do you believe that the president
should be elected directly by the people
Katefiina Bene‰ová
Business Development Manager,
ATC Czech Republic
Recent public research shows that support for
ČSSD and ODS is almost equal. I hope that the
election will result in a clear win for one party,
which will give people the security and stability they are all looking
for. Yes, I believe that the president should be elected directly by
the people. The president is supposed to be a non-political person,
which is sometimes difficult when the political parties elect him
alone. In a democratic state, there should be a democratic way of
electing the president.
Radek Mar‰ík
Managing Director, Herald Communications
I hope there will be right-wing government with no
opposition agreement. But in the current political
environment, it’ll be at least difficult to achieve it.
Regarding the president’s election, I would prefer
a direct method as, in my opinion, it’ll give the president a stronger
mandate.
Jan Mráz
Executive search and recruitment
I think that the upcoming elections will bring a
change of the current government. It looks like the
promises given four years ago were not kept and
that there is a need to do something. I would say
that this is a general feeling. I expect some changes
in the tax area and the social sphere. Also, I believe in further
economic growth supported with the crystal clear conditions for
potential investors. Concerning the presidential election system, I
thing it would be great if the system could be changed to a direct
vote. Of course, it requires related changes through the whole political
system so I am a little bit sceptical of it happening at this point.
Marek Kuãera
Director CEE, PrintSoft Česká republika, s.r.o.
The pure mathematical result, in the form of
something like 30 – 25 – 20 – 15 – 10 percent (you
can put names of political parties in this scheme, if
you like to) will solve nothing, so “who with whom”
is the question. After the very successful opposition agreement, I
would not exclude the big coalition. Deputies, who often approve
bills with such faults that any normal Czech citizen could see on
first glance, should reward all people with the right to decide about
one important state affair – at least.
Steve Tennant
Director, EC Harris s.r.o.
I believe the result will be very close, however I do
feel it will be won by ODS by a nose. Popular
opinion seems to be swaying to the right and that
a change is necessary. Whether ODS will succeed
in pushing through the reforms they are promising may be doubtful.
The election of the president should definitely be by the people.
This would remove the political trade-off, which often happens.
Personality should override politics.
F O C U S M A Y 2 0 0 2
21

Financial News
ING Employee Benefits
Dutch businesses are famous for their
sensitive approach to client needs, and for
the Dutch financial group ING clients
are also the most important aspect of its
business. The group’s basic values include
entrepreneurship, expertise and teamwork.
50 million clients in 65 countries on five
continents appreciate these values. One
hundred thousand employees work hard to
make the group’s clients feel good with
ING. In the Czech Republic we have had
the opportunity to meet the orange lion –
ING’s symbol – since 1991. Since then, the
family of lions has multiplied and today, it
entails a number of companies offering a
wide range of products.
Who is then a member of the ING
Lions If you are interested in insurance,
there is ING Nationale-Nederlanden. If
you want to ensure your current or a higher
living standard after your retire, you will
find help in ING Penzijní fond. ING Bank
will take good care of your money. ING Real
Estate brought prominent world architects
to Prague and contributed to the creation
of such exceptional buildings as Tančící
dům and Zlatý Anděl. Important members
of the group also are: ING Baring Private
Bank, ING Lease, Czech Venture Partners
and Baring Communications Equity.
ING Employee Benefits: satisfied
employees, the basis of corporate success
One of the most important factors that
influence the success of each company is
excellent employees. Each company strives
to attract motivated and satisfied employees.
Investments in human resources are, indeed,
a long-term enterprise but in the end, it
always pays, which can be proven by firms
involved in the program ING Employee
Benefits.
Under this brand, ING Česká republika
has introduced a unique concept of cooperation
with corporate clients. Thanks to the
current legislative environment, companies
can provide their employees with various
social and financial benefits that help them
increase employee loyalty to the company
and increase their motivation. Companies
that have opted for ING Employee Benefits
include, for example, Philips, Nestlé Food,
Unilever, British Airways, České dráhy,
Český rozhlas and many others.
When creating the program, ING built
upon the experience of its parent company
ING Group, which has been offering a
system of employee benefits in a number of
European countries and in Northern
America for many years.
Employers have the possibility to acquire
life and private health insurance, supplementary
pension insurance, mortgages,
construction savings plans and mutual
funds for their employees “under one roof”.
The range of services is being continually
extended.
As in all spheres of its business, ING
excels especially thanks to its ability to
deliver a tailor-made program developed
according to the needs of its client. There
are specialists who work as a contact person
for each company. This specialist proposes
employee benefits solution according to
specific requirements of the client and he
or she also advises clients on an ongoing
basis on possible improvements in the
employee benefit system.
Quality services are provided not only by
corporate specialists but also by the Contact
Center. Contact Center operators have been
trained to answer any inquisitive questions,
whether those concerning the pension plan,
individual account balances, products
themselves, changes in personal data etc.
One of the primary goals of ING
Employee Benefits system is the simplest
possible administration. Therefore, an
original online application symbolically
called Benefit has been made available.
ING Employee Benefits are a solution
for anyone who realises that satisfied
employees who enjoy working for the
company are an asset.
Contact: Nádražní 25, Prague 5, www.ing.cz
Email: klient@ing.cz, Infoline: 0800/159 159
MÚVS
ČVUT
člen české asociace MBA škol CAMBAS
MASARYKŮV ÚSTAV VYŠŠÍCH STUDIÍ ČVUT
Horská 3, 128 00 Praha 2
ve spolupráci s SHEFFIELD HALLAM UNIVERSITY
přijímá přihlášky pro školní rok 2002/2003 do
tříletého manažerského studia při zaměstnání v angličtině
Master of Business
Administration
s výukou angličtiny v prvním roce, absolventi celého
studia získají britský vysokoškolský titul MBA
Informace a přihlášky: tel.: 02/2435 9121, 9131, 9129
fax: 02/2491 4834, e-mail: mba@muvs.cvut.cz
www.muvs.cvut.cz
22
F O C U S M A Y 2 0 0 2

Member’s Article / After Hours
How many companies have been left
with a sour taste in their mouth after
commissioning and then receiving
a highly priced report from outside
consultants Are those conclusions and
recommendations relevant and more
importantly how will they be implemented
What is the most effective way to utilize a
consultant and what skills should he or she
provide
Consultants can never be experts in a
client company’s business; it is those working
in the business who have all the expertise
and know-how accumulated over the years,
they only need help in accessing it.
Calling in and deferring to so-called
outside experts does not help in this area
and often leads to reports way off beam and
unusable because they are unconnected.
“One great myth that continues to
dampen the potential here is the understanding
that first we do an analysis, and
then we decide on change. Rather it is
recognised that inquiry and change are
not truly separate moments, but are
simultaneous. Inquiry is intervention, the
seeds of change – that is, the things people
think and talk about, the things people
discover and learn, and the things that
inform dialogue and inspire images of the
future – are implicit in the very first questions
that we ask”. Appreciative Enquiry David
L Cooperrider and others.
Such linkage of enquiry and intervention
supports the perspective of the business as
a living system. The introduction of an
outsider immediately changes that system
as do all other interactions. A theory of the
universe first muted in the study of the
unpredictability of subatomic physics, “An
elementary particle is not an independently
existing unanlysable entity, it is, in essence,
a set of relationships, that reach outward to
other things” writes Henry Stapp of the
University of California.
What follows from this is that the
enquirer is a change element and his skill
is in following the interests and thought
processes of his clients. He will be skilled
in asking, at appropriate moments, the
right questions to deepen the enquiry,
being a mirror to that process, and playing
back key words or paraphrasing in his own
words statements and conclusion for
confirmation or redefinition.
The procees of change has in fact already
commenced by the time the consultant
appears. The client has moved from a
recognition of a problem or need to a request
for help and has called in the consultant.
For the consultant to be most effective,
they should question what was behind the
request to precisely focus on the areas
concerned and help the client explore
his situation and circumstances. In that
exploration, they find a way forward,
“an order”, a set of goals to be achieved in
Getting the best
from consultancy
alliance with the consultant. Discussions
can then continue, to negotiate a contract
that will include the goals, measurable
targets, division of resources and feedback
sessions – a blueprint for the work to be
carried out.
Because so much of the consultant’s
time has been spent at the outset, the goals
that emerge come from the clients own
analysis. And because the client has been
more involved in the process of analysis
and then the definition of the order, he
is more aware of the resources and time
available and therefore only final goals that
are realistic and achievable are agreed. The
method of implementation therefore is
already part and parcel of the business
goal, making its success more likely.
Simon Rawlence
Nothing can bring truer meaning to
the term “peak experience”, than
scaling down a vertical rock after an
arduous and grueling ascent to the top.
Take it from me, as someone who has been
‘hanging out’ on rocks for over 20 years:
there are few things in life that can beat the
sense of achievement and pure exhilaration
of having tackled successfully the many
and diverse challenges presented by freeclimbing.
There is a popular misconception that
free-climbers are adrenalin-hooked lunatics,
willing to risk anything for their next ‘fix’.
True, we relish the physical and mental
challenge – and the adventure. Yet, out there
on the rock face, you will more often find
serious climbers, who are highly rational,
safety conscious beings, only too aware of
the dangerous risks caused by foolish
bravado and disrespect for the outdoors.
Free climbing is an ‘intelligent’ sport
involving plenty of technical know-how,
skill and good judgment. However, it is far
from elitist, appealing to people of all ages
and from all walks of life. Nowadays, free
climbing is one of the fastest growing
sports around. Why It is a superb way to
keep in shape – climb regularly, and soon
you will notice significant improvements
in your strength, endurance, agility and
balance. Socially, it is found at the root of
many great friendships. Climbers simply
love to sit around the rock base, relaxing
and reflecting on their conquests, and they
usually develop a strong sense of bonding
with their partners, with whom they may
have shared some risky, strenuous and
rewarding moments. Consequently, the sport
is accepted increasingly as a medium to
support personal growth and change, used
in numerous learning situations ranging
from management training to rehabilitation
and therapy.
Fancy putting your hand to the rock
Getting started is reasonably straightforward.
Firstly, it is an advantage to be moderately
fit and strong. Secondly, find an experienced
partner, associated with a recognized
climbing club, who can help you get to
grips with the basics in safety, technique,
and terminology. Thirdly, you will need
equipment. Most indoor climbing centres
have all the necessary gear available for
hire, but eventually you will want to invest
in your own, especially when venturing out
into the countryside. Avoid falling into the
inevitable traps by seeking out expert advice
– good sources are climbing & outdoor
shops, specialist publications, the internet
and seasoned climbers.
Climbing to the top
Czech Republic offers abundant freeclimbing
opportunities, all year round.
Some of the most wonderful wilderness
settings in Europe can be found amongst
our geologically unique, sandstone rock
formations, the most famous of which
include Český ráj, Labské pískovce and
Adršpašsko-teplické skály. Climbing halls
offer an alternative option in bad weather,
and are also preferred by some, who like
the more convenient and controlled
environment. Inside and out, routes exist
for all levels of ability, thanks to a system of
comprehensive ratings applied to each
climbing project. The numerous guides
(Lezecký průvodce), available from climbing
stores, and websites, will help you in selecting
the most suitable climbing location for your
standard and needs.
Wherever you go, simply relax and enjoy
it. See you at the top.
Vladimír Pešek, vlada@newday.cz
Useful websites include www.lezec.cz and
www.vrcholky.cz. Outdoor & climbing specialists,
Hudy Sport are excellent, branches nationwide.
F O C U S M A Y 2 0 0 2
23

In Brief
LLP Group announces
revenue of 6.48 million
USD for 2001
Prague, 28 February 2002 – LLP Group,
supplier of business and financial software
solutions, today reported revenue of 6.48
million USD for the year ending December
31, 2001; and a net profit of 255k USD for
the same period. LLP Prague, the group’s
headquarters, accounted for 42% of the
group’s total revenue.
“LLP Group’s growth in revenues
stems mainly from the core business
activity of SunSystems licence sales and
implementation. Substantial implementation
consulting projects (such as for large
corporate clients in the entire region of
CEE) contributed to this growth. Staff
levels rose from around 100 to 130. The
Group’s profits reflect our continued
investment in Ariba, Pivotal and time@work,
all of which saw signs of return during the
second half of the year with sales of licences
both within and outside the region,” adds
Adam Bager.
2002 should bring growth in both
new and established business areas (and
especially with the launch of SunSystems
5). It is unlikely that the group will invest
in any further subsidiaries during 2002.
The Intercontinental
lifts the curtain
After 5 months of tearing up the old and
fitting in the new, we are very excited to
provide you with even more comfort, luxury
and elegance during your stay in our hotel.
All 364 guestrooms and suites were
completely refurbished, as well as our guest
corridors and our exclusive Club Inter-
Continental Floor and Lounge for the
travellers seeking more exclusivity. While
we created, (with interior designer firm
RPW) a cozier guest room environment
using mostly warm colour schemes and
fabrics of the highest quality, we also
attempted to improve the comfort of your
stay by equipping all rooms with new light
fixtures, goosedown duvets, full black-out
curtains and additional bed-side two line
telephones and data ports. In addition, our
Club Inter-Continental rooms and suites
continue to offer direct internet access, fax
machines, cd and hifi systems, in-room tea
and coffee making facilities, twice daily maid
service and complimentary newspapers as
well as access to our own Club Inter-
Continental Lounge for you to relax serving
breakfast, light snacks during the day and
warm and cold canapés during cocktail
hour. The Club Lounge also provides you
with private check-in and check-out, a
library with CD selection, a business centre
with PC and Internet as well as secretarial
services and a meeting room for up to 8
people. We have also added 7 new guestrooms
increasing our room count from 364
to 371. We are looking forward to your visit.
Czech Republic is £rst
choice for investors
into Central Europe,
PricewaterhouseCoopers
survey shows
• 41% of the investors surveyed in the 2002
Investment Incentives Survey said the
Czech Republic was the only country
they considered for their new investment
in 2001. This represents a substantial
increase from the previous year’s 26%.
• 36% of the investors considered Hungary
and Poland as their investment area (down
from 38% and 44%, respectively, in 2000).
• Most new investors in the past year already
had experience in investing in the CR:
on average most companies had almost 3
prior investments in the CR. Altogether,
73% of investors said this was not their
first investment in the country.
These are some of the key findings of the
2002 Investment Incentives Survey that
was commissioned by Pricewaterhouse-
Coopers in association with CzechInvest to
investigate the attitudes and experience of
companies investing in the Czech Republic
over the past year. The second run of this
independent survey was again carried out by
Opinion Window/Research International
agency.
Low manufacturing costs were again
the most important factor for companies
when deciding to make an investment
in the country. While in 2000 it was
especially the Czech Republic’s qualified,
yet inexpensive, workforce that appealed
to investors, last year they appreciated
specifically the high quality and skills of
the Czech labour force in relation to its costs
even though they were not considered to
be that low. This is also reflected in why
investors recommend the Czech Republic
as a country in which to invest: the main
reason is good quality of labour, followed
by its comparatively low price.
Investment incentives were ranked
second among the country’s attractions,
and third was economic and political
stability, which were relevant factors for a
quarter of new investors. When investors
recommended the country for investment,
the importance of political and economic
stability exceeded the quality of the
investment incentives program. Compared
to the previous year, economic stability
was considered more vital in 2001 than
a favourable tax climate, qualified local
management or sufficiency of infrastructure.
Five-star launch with
gala dinners
On April 9 and 10, the Prague Hilton
organised two big parties for its clients. The
first evening was for meeting organisers
and the second for corporate clients.
The parties represented an opportunity
to inform all clients about improvements at
the Hilton as well as to thank them for their
support and co-operation.
During both events, the General
Manager of the Hilton presented the projects
and changes that the hotel has undergone
and is undergoing throughout this year:
• Hilton Grand Ballroom
• Cybex Health Club & Spa
• Congress Hall complete renovation
• Guest rooms and Presidential Suite
upgrade
• Lobby Bar and Clubroom upgrade, new
Hilton Breakfast room
At the end of the speech, the fifth star was
revealed – as the Hilton Prague recently
received it from the National Federation of
Hotels and Restaurants. On the second
night, the fifth star was unveiled by the
Mayor of Prague Mr Jan Kasl.
Both parties were a big success due in
part to a delicious five-course dinner as well
as a great raffle with prizes for vouchers for
stays at Hiltons abroad with flight tickets
from ČSA.
24
F O C U S M A Y 2 0 0 2

Dining Out With ... Robin Dubow
Morgan State
University Choir
returns to Czech
Republic
This summer the Morgan State University
choir will return to the Czech Republic for
a concert tour of the country. Covering 14
towns and cities over a three week-plus
period, the centerpiece of the choir’s visit
will be their two evening performances
of “Porgy and Bess”, with the Czech
Philharmonic Orchestra. These concerts
will be in Dvořák Hall of the Rudolfinum,
on the 3rd and 4th of July.
The tour organizer will make group
seating available for Chamber members,
depending on ticket availability. Specific
requests for tickets should be made to the
Chamber for coordination, and will be
processed on a ‘first come first serve’ basis.
Additional information on the Morgan
State choir concert tour may be obtained
through the website www.cabarrus.cz
Representatives from
the Czech Republic
have won the Euromanager
Contest
Students from the University of Economics
comprising Leo Crlík, Míla Holba, Jana
Novotná, Patrik Vyroubal and Petr
Macalík (VŠE), Prague, managed to win
the International Finale of the Global
Management Challenge EUROMANA-
GER contest. The final was held in Paris
on 3 and 4 April 2002. Second place was
taken by representatives from France, while
third place belonged to Spain.
The organizer of the competition in the
Czech Republic is Recruitment International,
a HR agency that has been operating in
our market since 1990. The main partners
of the competition are Accenture,
Carrefour and Microsoft. The consulting
company Accenture not only supported
the competition as the main partner,
however, but also bet directly on the winner
– as the Czech branch of this multinational
company sponsored the winning team
from the University of Economics.
Global Management Challenge EURO-
MANAGER (GMC) is a true-to-life
simulation of business operations based on
the computer processing of a fictitious
market in which the model trade companies
compete with the objective of winning the
highest price per share and the best market
position on the basis of generated profit.
Hliněná Bašta Restaurant
Újezdská ul. 169
Průhonice
Tel.: 02/7269 0700, Fax: 02/7269 0531
Open daily from 11.30 to 01.00
If you are looking for good food in a
pleasant, and different setting, I can
strongly recommend taking a trip a few
kilometres from the centre of town, to
Hliněná Bašta Restaurant in Průhonice.
This lovely and unusual restaurant beside
a pond is a pleasant change from the city. It
is an ecological oasis as well as a culinary
one. It is a modern building (1996) and
built of un-burnt bricks, constructed from
soil from the local public refuse dump,
which was no longer in use. From the quiet
road, it appears to be a single rural tower,
most of the restaurant being built into a
grassy hill. (A search of the Internet for
“Hliněná Bašta Restaurant” will reveal
plenty of sites devoted to its architecture,
but unfortunately not the menu). The
name means “Earthen Bastion”. At the end
of its useful life (in the distant future), the
building can be completely returned to
the fields.
The interior reflects the earthen colours
of its origin. It is very peaceful and calm.
There is a pleasant terrace beside the
pond, or a spacious, bright and cool
dining area, plus several smaller dining
areas in the tower section on 3 levels. The
area is very rural, despite being close to
the city and gives an air of calm and peace.
The staff speaks English and the menu is
also available in English although most of
the clientele seem to be Czech. It is well
off the tourist trail.
The food was excellent, perhaps the
best we had tasted in Prague, and the
service was friendly and efficient without
being intrusive. The prices were very
reasonable and the menu and wine-list
extensive for a small restaurant.
Starters range from about 85 to 145
CZK, with a couple of specialties (such as
marinated skewered king prawns with
baked tomatoes, basil oil and yoghurt at
295 CZK). Amongst the starters, we can
recommend the sautéed poultry liver in
red wine with fresh salad (85 CZK) and
the piquant mussels au gratin grilled (145
CZK).
The house specialises in seafood and
international dishes, mostly in the price
range 150 to 400 CZK, with a few extraspecial
dishes costing more. Most of the
dishes were at the lower end of this range.
Surprisingly there is no pork on the menu,
but plenty of different fish and game
dishes. We can recommend the leg of
lamb (both Provencal and Morocco style)
at 235 CZK. The succulent chicken steak
stuffed with white cheese and walnuts
served in a delicate sauce with grapes and
olives (CZK 175) and the devil rump-steak
(CZK 285) were also first-class. We can’t
comment on the deserts, as after the
generous entrées and main courses there
was just no room (for even a wafer thin
after-dinner mint). Vegetarians are well
catered for as well.
There is a 10 CZK per person cover
charge, and the nuts, which are on the
table when you arrive, are charged at 120
CZK, whether you eat them or not.
There is a varied wine list with Czech
wines starting at 161 CZK (Rulandské
Modré) and several other wines up to
520 CZK for a Ryzlink Rýnský (výběr).
We had a very good Rulandské Modré
(výběr – 1996) for 280 CZK. Most of these
are also available by the glass. There is also
a selection of French Wines/Champagnes
ranging up to Gevrey-Chambertin 1er cru
for 4,200 CZK or a Dom Perignon for
6,500. We did not try these (but maybe
next time …). There were of course many
French wines in a lower price range. 500 ml
of good Czech beer will cost you 30 CZK
The restaurant is open daily from
11.30 to 01.00 at Újezdská ul. 169 but I
would recommend making a reservation.
The Sunday lunchtime we were there had
almost every table reserved, especially
those on the terrace. Reservations are
suggested, and can be made by telephone
on (420 2) 7269 0700 or fax 7269 0531.
Dr Robin Dubow
Medical Director, American Medical Centers, Prague.
I have worked (and eaten) in some strange places, including both the Arctic
and Antarctic (where I was also a cook), on ships and small boats, in deserts and
rainforests, tropical islands, high mountains, big cities and small villages. If
I could afford it, I would include the space station (I did actually do some work
for NASA at one time). However Prague is one of my favourite cities, and there
is plenty of excellent dining to be had here if you keep looking. Never be afraid to
try something new.
F O C U S M A Y 2 0 0 2
25

BCC Members in the Czech Republic
* New Members are listed in bold
600 International Ltd.
A.M.T. Group s.r.o.
Accenture
Accord Group Ceska, s.r.o.
Ahold
Aimtec a.s.
Allen & Overy Praha
Allied Domecq s.r.o.
Allied Pickfords
Alpha Management Consultants s.r.o.
Alstanet
Alstom Czech s.r.o.
Altheimer & Gray
American Dental Associates
American Express, spol. s r.o.
American Medical Centers s.r.o.
AMI Communications
andel’s hotel Prague
Andersen
Anglian Water
APSTEC
Arcon Machinery a.s.
Artane Solutions, s.r.o.
Arthur Hunt s.r.o.
AstraZeneca Czech Republic s.r.o.
ATC (Czech Republic) Ltd.
Atelijeur Půda, s.r.o.
Aukční síň Naxos
Aukett s.r.o.
BAE SYSTEMS
Baker, Helena
Baker & McKenzie v.o.s.
Balcarek & Rekova, spol. s r.o.
Ballymore Properties Czech Republic s.r.o.
Barbara Day
Barclays Bank PLC
Bates Praha
BDO CS s.r.o.
BDS Bohemia
Beck & Pollitzer Czech s.r.o.
Becker & Poliakoff, v.o.s.
BEROX Machine Tool Co Ltd OS
Best Communications Group
BLYTH Praha, spol. s r.o.
Boots Healthcare C&E Europe Ltd.
Bovis Lend Lease a.s.
Brastan s.r.o.
Brichta, Irena
British Airways PLC
British American Tobacco (CR), s.r.o.
British Council, The
British International School of Prague, The
Brooks, s.r.o.
BT Česká republika s.r.o.
BUSINESS LEASE s.r.o.
Casimaty, Peter
CATRO s.r.o.
CB Richard Ellis s.r.o.
CEC Government Relations s.r.o.
Central Europe Trust Co. Ltd.
Chapman Taylor International Services Ltd.
Chem Resist Europe s. r.o.
Chemelek spol. s r.o.
Clifford Chance Pünder
CMS Cameron McKenna v.o.s.
Coca-Cola Beverages Česká republika
Colliers International s.r.o.
comma
Commercial Union
Commerzbank AG, Prague Branch
Concept Training
Contactel s.r.o.
Contract Administration s.r.o.
CORE Computer s.r.o.
Corus Central Europe, s.r.o.
Crowne Plaza Prague
CTP Project Invest, spol. s r.o.
Czipin & Proudfoot
ČESKÝ TELECOM, a.s.
Český Web, a.s.
Dawe Geddes Architects, s.r.o.
Deloitte & Touche
Denis Wilson Partnership, s.r.o.
Dewey Ballantine v.o.s.
DHL International (CR), s.r.o.
Diners Club Czech s.r.o.
DR Steel s.r.o.
DTZ Zadelhoff Tie Leung s.r.o.
E.C. Harris
E.P.R. Consulting
EBO
Egon Zehnder International
Elok-Opava spol. s r.o.
English College in Prague, o.p.s., The
English International School, Prague, The
Enviros s.r.o.
Ernst & Young s.r.o.
Erste Bank Specialised Finance
ET NETERA, spol. s r.o.
Eurest/Compass Group Plc
EUROGATE Bohemia spol. s r.o.
EUROSOFT s.r.o.
EuroSystems a.s.
Eurotel Praha, spol. s r.o.
EXi Telecommunications s.r.o.
Flow East a.s.
Fox, Stephen
Four Seasons Hotel Prague
French-rest
Fujitsu Services s.r.o.
Fujitsu Siemens Computers s.r.o.
Galileo C.E.E. service ČR s.r.o.
Gambit Factory s.r.o.
GEAC Enterprise Solutions, s.r.o.
GE Capital Golub Europe c/o Charles Square Center s.r.o.
Genesis Capital s.r.o.
Gifab s.r.o.
Gist Czech Republic s.r.o.
GJW Government Relations Ltd.
Glaxo Smith Kline s.r.o.
Gleeds Česká republika s.r.o.
Global Express Travel Services s.r.o.
Go
GO WEST Ltd.
Grafton Recruitment
GrandOptical
Group 4 Securitas a.s.
GTS
Haarman, Hemmelrath & Partner Consulting s.r.o.
Hanácké cukrovary, a.s.
Hanex Group
Hays Czech Republic, s.r.o.
Healey & Baker spol. s r.o.
Heidrick & Struggles
Helmut Neumann International s.r.o.
Herald Communications s.r.o.
Hifab Project Management s.r.o.
Hilton Prague
Holiday Inn Prague Congress Centre
Hotel Diplomat
Hotel Inter-Continental Praha
Hotel Le Palais Prague
Hotel Palace
Hotel Savoy
HSBC Bank plc - pobočka Praha
Ian Bryan Architects (IBA)
IB Grant Thornton Consulting s.r.o.
ICI (CZ) s.r.o.
ICT PRAGUE, spol. s r.o.
ICV s.r.o.
Identity Ltd., s.r.o.
IMI International, s.r.o.
Inexco Argosy s.r.o.
ING Bank N.V. pobočka Praha
Interface Heuga CZ s.r.o.
Interfax
International Power
International School of Prague
International Study Programs
ITE GROUP plc
JANÁK ZEITHAML & spol.
Jeakins, Robert
John Crane Sigma a.s.
JOKL APPRAISAL
Jones Lang LaSalle
JWA Prague s.r.o.
Kaiser Engineers & Constructors
Kensington s.r.o.
King Sturge
Kinnarps a.s.
Klein Šubrt Došková advokátní kancelář, v.o.s.
Koncept Praha s.r.o.
Korn Ferry International
KPMG s.r.o.
Kraus, Jan
Language Centre David Holiš
Leadership Trust (Training) Limited, The
Lease Plan Czech Republic, s.r.o.
Lemieux, Georges
Lewis & Hickey Praha spol. s r.o.
LEXXUS a.s.
LICOM Systems Ltd.
Linklaters, v.o.s.
Linstram, spol. s r.o.
Lloyd’s Register of Shipping
LLP
Logica s.r.o.
Lordship Estates s.r.o.
Lovells
Lunt, Susie
M.I.P.A. s.r.o.
MAI Insurance Brokers, s.r.o.
Madsen & Tailor Consulting a.s.
Marketing Solutions s.r.o.
Marsh, s.r.o.
Mayfield Management s.r.o.
Mazars
McNulty, Craig
Mediatronic Ltd.
Menhart Design Agency
Metrostav a.s.
Millward Brown Czech Republic s.r.o.
Mmd Public Relations, Czech Republic
Moores Rowland / Levey & Jung s.r.o.
Mövenpick Hotel Prague
Mozaic Group, a.s.
Mráz, Jan
Nečas, Jan
New Day Activity Marketing
New Europe Promotions
Nicholson International CR, s.r.o.
NS Group a.s.
OLYMP Communications
ORCO Property Group
P&O Trans European Praha s.r.o.
PA Consulting Group
Parnhams a.s.
Pedersen & Partners - Executive Search
Pegasus s.r.o.
Peterka & Leuchterová, v.o.s.
Phillip & partner
Portland Trust, s.r.o.
PPF a.s.
Pragoimport-Adam a.s.
Prague Diamond 2000, s.r.o.
Prague Marriott Hotel
Pražské pivovary, a.s.
PricewaterhouseCoopers
PrintSoft Česká republika, s.r.o.
Priority Ltd.
Property Advisory Group, The
Property International s.r.o.
Protexin
Provident Financial s.r.o.
R.I. Consultancy Services s.r.o.
Radvan & Co.
RANNÝ ARCHITECTS s.r.o.
Rawlence, Simon Edward Fitzgerald
Real CDC Praha
Renaissance Prague Hotel
Ricardo Prague Branch
Rigips a.s.
Riverside School
RNR Solutions, s.r.o.
Robinco Leasing spol. s r.o.
Rolls-Royce International Ltd.
Ronia spol., s.r.o.
Royal Selection
Sá-Ga Foods
Samba Digital Media
Sauter Consulting Group
SAWBAC s.r.o.
Science Systems (CR) a.s.
S. C. S. Business Travel s.r.o.
Seddons Solicitors
Skanska Property Czech Republic, s.r.o.
Stirling Acroyd s.r.o.
St. James International
Stolte, Halgard
Strategy Plus
Synergo Suisse CZ a.s.
TARMAC SEVEROKÁMEN, a.s.
Taylor Nelson Sofres Media, s.r.o.
Teamconsult
Techo, a.s.
Tesco Stores CR a.s.
Thomas Cook, a.s.
Tiskárna Imperia s.r.o.
Tibbett&Britten
TMF Czech s.r.o.
TMP Worldwide
Top Spirit - Corinthia Hotels International
Total Solutions
Trelleborg Stanton
TriStannifer Management, a.s.
Tuckett, Andrew
U Modré Kachničky
UNICARE Medical Center
Unilever CR, s.r.o.
Union-Transport CZ s.r.o.
United Distillers & Vintners CR
Value Added
Větrovská, Anna
Volvo Auto Czech
Weinhold Andersen Legal v.o.s.
White & Case, Feddersen
Willis
Woodcote Developments s.r.o.
Wrightson Urquhart spol. s r.o.
Xerox CR s.r.o.
Zátiší Group
Zlatý Lihovar, a.s.
Copyright: British Chamber of Commerce in the Czech Republic 2002 | Copy editor: Neil Smith | Advertising: Lucie Smith, tel.: 24 83 51 65, fax: 24 83 51 62
E-mail: publications@britcham.cz | ISSN 1212-5156 | Production: Atelijeur Půda/ Břitva Print, tel.- fax: 7196 1788, tel.: 0602 383 555 | E-mail: puda@iol.cz
Focus is registered with the Ministry of Culture, MK ČR E 13335
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F O C U S M A Y 2 0 0 2