Investor Presentaiton

Corporate transactions have become an im- portant feature of the Czech legal environment, making it possible for entrepreneurs to expand or restructure their business activities in the Czech Republic. The process of mergers and acquisitions is primarily regulated by the Civil Code, the Act on Business Corporations, the Act on Takeover Bids, the Act on Transformations of Business Companies and Co-operatives, ac- counting and tax laws, anti-monopoly regula- tions, and a number of special regulations ap- plicable to specific sectors, such as banking, insurance and other financial al services. Privatisation Although it is not currently a hot topic, a num- ber of enterprises in sectors such as electricity and transport may still be subject to potential privatisation by sale to strategic investors. The privatisation process is initiated by gov- ernment decision. All transactions are subse- quently carried out by the relevant ministry, generally through a tender. Ownership of real estate The Czech Republic does not place any restric- tions on real estate ownership. Acquisition and disposal of czech legal entities For foreign individuals and legal entities, no restrictions apply to owning abusiness or hold- ing shares in companies, and they may acquire and sell up to 100 percent of the share capi- tal of a limited liability or joint-stock company. Likewise, foreign individuals and legal entities can also participate in companies with other legal forms. The transfer of an ownership interest in a lim- ited liability company must be recorded in the Commercial Register. The shares of certain joint-stock companies are registered with the Central Securities Depository Prague or depos ited in escrow at the Central Securities Deposi- tory Prague, a bank or other entity entitled to maintain records of investment instruments. In the case of shares traded on the regulated securities market in the Czech Republic or an- other EU member state, the acquirer is obliged to notify the company (the issuer) and the Czech National Bank if their share of the com- pany's voting rights exceeds a certain level. In addition, if shareholders acquire a minimum of 30 percent of voting rights and actually control the company, they are obliged to bid for the shares of the remaining shareholders. 84

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