Yearly Report Metrostav a.s. 2015

Contents

4 Company profile 6 Introduction of the Chairman of the Board of Directors 8 2015 in figures and pictures 10 Highlights of 2015 12 Strategic targets of the Company 18 Business development of Metrostav Group 24 Social responsibility priorities 30 Corporate governance 32 Metrostav Group chart 33 Key consolidated figures of Metrostav Group in 2011–2015 34 Contact information Company profile

Metrostav, the leading company of the Metrostav Group, in 2015 reaffirmed its position of number one on the Czech construction market and maintained the second place in this field among the countries of Central and Eastern Europe. The Company bores tunnels, builds the metro, bridges, motorways and roads, as well as residential houses and industrial buildings, power plants and wastewater treatment plants. In addition, it renovates historical structures. Its activities

4 account for almost half of domestic underground construction; Metrostav is one of the few companies in the that employ highly specialized, traditional mining methods of construction. Metrostav is well aware that evidence of genuine stability and sustainable business of each company is not just financial results, but also corporate conduct demonstrating their social responsibility.

5 Introduction of the Chairman of the Board of Directors

2015 was another successful year railway tunnels in Ejpovice and we would like The Environmental Impact Assessment (EIA) to use it abroad as well. Act may bury not only new projects under for the Metrostav Group. The preparation, but also the project that are ready Group’s external turnover and Construction of the Blanka tunnel was difficult for tenders. The construction sector in the for us because the tunnel complex became Czech Republic lacks a transparent concept, profit again moderately increased a battleground for politicians and a target for rules and regulations, which makes it difficult year-on-year. I am pleased that we criticism by the media and the public. However, for investors to contract projects and for the criticism turned out to be unfounded and building companies like ours to compete in continue to embody our shared unjustified. I appreciate that Blanka has proved tenders and implement the projects. values for our shareholders and to be a useful, solid and well executed project. It has eased traffic in some parts of , Over the past twenty years, seventeen partners, notably professionalism, as we expected. On the other hand, it has also ministers took office at the Ministry of credibility and stability. Also, last confirmed what we had repeatedly pointed Transport. And I have long considered it out: the tunnel complex lacks connections to a gross mistake to have no construction year was key for us on two counts: the traffic system. To substantially improve ministry at all. Our two largest contracts for the traffic situation in the capital, Prague has to complete the outer and inner ringroads. Compared to other sectors, our industry has the domestic public sector were Blanka has always been and will be an long operated on low margins that often do not completed and Metrostav Group’s extraordinary reference project for Metrostav outweigh the risks entailed in this field. Yet and I am pleased that the Troja Bridge, which many people are convinced that the building production abroad exceeded is part of the Blanka complex, has won several industry has great potential for corruption. 30 percent of total performance. prestigious awards. The Czech Republic has endorsed the law on criminal liability of legal entities, under which I highly value the work of our teams abroad. companies are responsible for the conduct After six years of construction, the extended The shortage of large projects on the domestic of their employees. The Metrostav Group has A metro line from Dejvická to Motol was put market prompted the Metrostav Group to move implemented zero tolerance for any breach into operation in April. Metrostav’s paramount some of its production capacity to foreign of ethical norms and unfair practices. At the project, the Blanka tunnel complex, was put markets. In the Czech Republic, the Metrostav beginning of 2015, we updated the corporate into operation on 19 September after a number Group boasted the largest construction Code of Ethics that must be observed by all of setbacks and obstacles. A day later, we production volume for the fourth year, but in our employees and business partners. In handed over to ’s public investor the foreign countries we still rank among smaller September, we also approved the Group’s modernized S8 ringroad in Warsaw, which companies that must compete with local and criminal prevention standard incorporating was a great success, and on 25 September we often stronger competitors. I deeply respect in our organizational and management celebrated the end of boring the Norðfjörður our partners who are capable of winning documentation a program to protect the Group tunnel in . We continued to work on foreign contracts and then timely execute companies against liability risks pursuant to international projects in , , them in good quality despite the harsh climatic the law on criminal liability of legal entities. Serbia, Hungary and other countries. Even conditions, especially in the Scandinavian though we began to bore a railway tunnel in countries. We have also been successful in I look forward to celebrating this year 45 years Ejpovice near Plzeň at the beginning of the Poland, where a month before the contracted since founding Metrostav. I am convinced year, our project portfolio has been changing deadline we handed over the renovated city that we can build upon our past achievements as large-scale projects for public investors in expressway S8 and subsequently we signed both in the Czech Republic and abroad and the Czech Republic are being replaced with a contract for construction of the S7 motorway overcome all setbacks facing the Company now smaller regional projects and foreign contracts. in Gdansk. or in the future, as we have always managed before. Construction of the has always To succeed in foreign markets also been a matter of prestige for the Company means to get to know and comply with I wish all shareholders, colleagues and and a flagship project valued by both industry local building legislation and regulations partners good luck and professional success. professionals and the general public. I am glad governing the construction industry. We that we have completed the construction of the have been getting better and better at that. V.A metro line in excellent quality and to the Conversely, the situation in Czech legislation satisfaction of all parties. Thanks to Metrostav’s is still unsatisfactory. This year we expect Division 5 team we were able to demonstrate amendments to key laws that badly need fixing. the effectiveness of the TBM method and I previously described the Public Contracts Act incorporate it in our core technologies. This as flawed and at the moment it doesn’t look Jiří Bělohlav technology is currently deployed for boring like it might be turned into a quality product. Chairman of the Board of Directors

6 7 2015 in figures and pictures Metrostav a.s.

Production 19.2 CZK bill.

Operating profit 409 CZK mill.

Employees 2,934

Operating in countries

8 7 Metrostav Group

Operating income 31.6 CZK bill.

Operating profit 922 CZK mill.

Employees 5,068

Operating in countries

17 9 Highlights of 2015

Acquisition of the Vögele Super 2100-3i finisher allowing to pave the width of 13 metres with the output of 13,000 m2/day for the Asphalt Paving Centre.

Inauguration of the Handover of the small tunnelling shield S-799 hydroelectric power plant Viktorie for boring the in Štětí on the Elbe to the Ejpovice tunnels, diameter non-profit organization 10 m, length 114 m and Energeia. weight 1,800 tonnes. II Handover of the Meteor Handover of the service administrative building zone at the Kozlovichi border in Prague 8 to investor terminal in to CPI Property Group. Approval of the updated investor Beltamožservis. Code of Ethics of the Metrostav Group by Opening of the InnoCrystal the Metrostav Board of I Innovation Centre in Directors. Zlatníky-Hodkovice near Prague. Completion ceremony for the reconstruction of the Central Military Archives Launch of the operation in Prague-Ruzyně. of a six-kilometre section of the V.A metro line from Laying the foundation Dejvice to Motol. stone of a production III facility for manufacture Incorporation of Metrostav of Busch vacuum pumps Polska Spolka Akcyjna in Liberec. based in Warsaw in the Polish commercial register.

Signing of the contract for the reconstruction of IV the National Museum Signing of the contract Historical Building in for the modernization Prague. of a 5-kilometre section of the D1 motorway between Hvězdonice and Signing of the contract Ostředek. for the construction of the Adoption of the Decathlon shopping centre Criminal Compliance in Košice for investor comprehensive White ouse s.r.o. programme and its Handover of the expanded implementation by wastewater treatment all Metrostav Group plant in Pelhřimov for use. V companies. Winning the title Czech Obtaining the Safe Transport Construction Company certification 2014 and two other (sixth) awarded by the VI professional awards State Labour Inspection for the “Pedestrian Office. bridge across the Elbe” in Čelákovice. 10 Signing of the contract for the reconstruction of rooms housing the irradiator at the Vinohrady Teaching Hospital in Prague. Completion of boring an Winning the tender for 860-metre-long Poľana the construction of the tunnel, which is part of Jobergtunnelen tunnel in the Slovak D3 motorway Norway (in association with near the border with the Bertelsen & Garpestad). Czech Republic.

Opening of the “N” pavilion Signing of the contract VII of internal medicine at the for the construction Silesian Hospital in Opava of the Jobergtunnelen six months in advance. tunnel in Norway. Incorporation of VIII Metrostav Ankara inşaat taahhüt sanayi ve ticaret Signing of the contract anonim şirketi in the for the construction of Turkish commercial the Bošilec‑Ševětín register. section of the D3 motorway.

Opening of the Blanka tunnel complex.

Opening of the modernized section Opening of the Seniors of the S8 expressway Home in Chválkovice in Warsaw, including near Olomouc after the General Stefan IX reconstruction. Signing of the contract Grot‑Rowecki Bridge. for the construction of Obtaining an occupancy a 20-kilometre section permit and handover of of the S7 expressway in the ELI Beamlines laser Gdansk (Poland) worth centre in Dolní Břežany CZK 9 billion. to investor, the Academy Opening ceremony for of Sciences of the Czech the ELI Beamlines laser Republic. centre in Dolní Břežany. XII Signing of the Signing of a Memorandum Collective Agreement Obtaining a patent for of Cooperation with of Metrostav a.s. and the method of handling J&K Petersen (Faroe other model documents X heavy technology Islands) regarding an offer of the Metrostav Group equipment operating in to build two undersea by representatives of enclosed spaces at the tunnels. Prunéřov power plant. the Group companies Handover of the Northeast and the trade union bypass road in Mladá organizations, effective Boleslav for use. for two years.

Handover of the optimized railway line between XI Bubeneč and Holešovice in Prague to investor Railway Infrastructure Administration (SŽDC). 11 Strategic targets

The 2015 results demonstrated highly versatile skills of Metrostav and its active business policy in all market segments and readiness to expand to neighbouring markets. In order to utilize all capacities and fulfil the production programme, Metrostav’s employees worked on large and smaller-scale important projects across the Czech Republic. The Company also used opportunities to deploy its specialized and long‑developed teams abroad.

12 Strengthen the position on the Czech market

Metrostav maintained its market for construction of the planned D metro line to unique national cultural monument is scheduled Písnice. to take 42 months and will also connect the share on the highly competitive neo‑renaissance Historical Building with the New domestic market. The Company The second most important transport project in Building of the National Museum. Prague, completed in 2015, is the Blanka tunnel does not primarily focus on complex with a total length of 6,382 metres. Major regional projects in the Czech Republic extensive expansion and growth in Together with the Strahov, Mrázovka and Zlíchov A great emphasis is placed on the development tunnels it makes up the longest city tunnel in of activities in other regions of the Czech volumes, but on selecting efficient Europe measuring about nine kilometres. The Republic where Metrostav has boosted its construction projects with an project includes the Troja Bridge spanning regional offices. Consistent marketing and sales the Vltava River in an elegant and bold arch activities, good knowledge of local conditions acceptable risk level and adequate that has only a minimum impact on the city‘s and active engagement of Metrostav’s local economic results. The objective is skyline. The bridge has received a number of employees have resulted in winning and prestigious international awards, both in Europe launching a number of construction contracts. to sustain external turnover in the and worldwide. range of 4–5% of the construction Key projects launched in regions in 2015 include: At the beginning of last year, we began to bore n Construction of the D3 motorway in the market in the Czech Republic. the longest rail tunnel in the Czech Republic Bošilec–Ševětín section. on the Rokycany-Plzeň railway line by placing n Construction of the regional centre for waste Major projects in Prague the statuette of St. Barbara, the patron saint of recycling near Vintířov. The bulk of construction production was again miners, in the portal of the started tunnel and n Construction of the BUSCH production facility executed in Prague in 2015. inaugurating a more than 110-metre-long special in Liberec. tunnelling shield TBM S-799. The machine n Reconstruction of the Rokycany–Nezvěstice Since its inception in 1971, Metrostav has named Viktorie is equipped with the cutter head rail line section. been the general contractor of the metro with a diameter of almost 10 metres and weighs construction in the Czech capital and to date approximately 1,800 tonnes. The length of each Key projects completed in regions in 2015 has orchestrated building 61 metro stations and of the two tunnel tubes under the Homolka and include: three underground lines. Last Easter, another six Chlum hills exceeds four kilometres. n Construction of the R35 expressway in the kilometres of the V.A line from Dejvice to Motol Sedlice–Opatovice section. opened for passengers, extending the metro On 20 April 2015, Metrostav experts took n Construction of a small hydroelectric power network to a total of 65.5 kilometres. Boring over the Historical Building of the National plant in Štětí. the tunnels with two tunnelling shields named Museum in the capital city and now are n Reconstruction of a swimming pool in Ústí Tonda and Adéla helped prove the effectiveness restoring it to its former beauty within the nad Labem. of deploying the TBM (tunnel boring machine) scope of the M-P-I Association. The much n Reconstruction of the A1 building of the VUT technology, which Metrostav intends to use also needed and anticipated renovation of this campus in Brně.

13 Strategic targets

Develop IS foreign projects

Metrostav continued to Metrostav Group members help gain diversify its activities and experience on foreign markets. distribute business risks in Major foreign projects In September 2015, builders Metrostav multiple territories. When completed a 26-month ambitious project choosing foreign contracts worth CZK 5 billion, consisting of the modernization of a section of the S8 ringroad and participation in tenders, and of General Stefan Grot‑Rowecki Bridge the Company paid increased across the Vistula River in Warsaw. Since this was not the only construction project attention to the credibility of the executed in the country of our northern neighbours (Metrostav had previously built, investor and its ability to secure GB inter alia, a bridge in Chelmek, currently is sufficient funding. Metrostav finishing a flood control system in Eastern preferred projects funded by Neisse, and has won the tender for the modernization of the Marsa -Żołnierska the European Union, especially regional road in the amount of roughly one those allowing to deploy in-house billion crowns), the Company has founded a subsidiary, Metrostav Polska Spolka technologies. Akcyjna, which will represent the parent company’s interests in Poland. and Poland offer the greatest potential as they have the most similar Last year Metrostav also worked on two legislation and there is no significant motorway tunnels in Poľana and Žilina in language barrier. Another important and Slovakia, and on the longest road tunnel promising territory is northern Europe, Norðfjörður in Iceland. In addition, boring of including Iceland where we have already two underground projects was underway in gained ample experience and could use Bjørnebakkane and Joberg in Norway. in‑house technology, notably in tunnelling. The latest result of the Company’s expansion With regard to the priority goal of to foreign countries is establishing of maintaining the leading position on the Metrostav Ankara inşaat taahhüt sanayi Czech construction market, it goes without ve ticaret anonim şirketi, which is the full saying that foreign activities have been name of a joint venture founded by Metrostav developed with caution and with acceptable in with the local company Ankara risk. In many cases, cooperation with local Insaat. partners and utilization of synergies between

14 Map of Metrostav’s foreign activities

Metrostav a.s.

The Group Metrostav outside Metrostav a.s. + USA and Canada

FI

NO SE

BY

PL

DE

CZ

SK

AT HU

HR

RS

TR

15 Strategic targets Improve construction skills

Metrostav is a high-tech company n In addition to the top prize in the building sites in Scandinavia and Iceland, and Excellence Awards 2015 competition in the TBM technology used for boring railway that systematically develops the Infrastructure category, the pedestrian tunnels at Ejpovice. The implementation in-house core technologies bridge over the Elbe River in Čelákovice of the latter project managed by Division 5 also received a prestigious award of the is noteworthy due to the deployment of and strives for continuous American Concrete Institute (ACI). the largest mechanized hybrid tunnelling improvement of skills in the field shield capable of a 10-metre excavation The awards received by Metrostav reflect its diameter. In 2015 the shield bored the total of construction production. At capabilities to efficiently manage large and length of nearly 2,600 metres. Another the same time, it has repeatedly complex projects. The actual execution of innovative feature of this project is that the construction contracts is managed by seven final single-layer lining is assembled from demonstrated that construction production divisions. Their scope of operations pre-cast segments that are for the first time projects executed by Metrostav varies both professionally and regionally. manufactured in the Czech Republic from concrete reinforced with dispersed steel rank among the most praised both Metrostav deploys in-house core technologies wires. [2] in the Czech Republic and abroad. for the bulk of projects, comprising technology for the construction of underground structures A new, dynamically developing technology (TBM, NATM and Drill & Blast), earth-moving used by the Company is cement-concrete Top awards 2015 technology, reinforced concrete structures, paving of motorways and expressways steel structures and bridge construction managed by Division 4. Since the introduction n Troja Bridge was declared the best European technology. To stay competitive, the Company of this core technology in 2013, more steel bridge construction of the year and has invested millions of crowns into purchases than 31 km of layered road pavement was received an Award of Excellence from the of modern machinery and equipment. completed until the end of 2015. [3] European Convention for Constructional Steelwork in the European Steel Design Similarly to previous years, deployment of The steel structures operation of Division 3 Awards 2015. in‑house core technologies accounted for is also a rapidly developing segment. about one-quarter of Metrostav’s overall An important test of this production segment n Optimalization of the Bubeneč – Holešovice production in 2015. in 2015 was the supply and installation railway line, performed jointly by Metrostav of a high‑performance steel structure and Subterra, received the State Transport In the underground construction segment, (1,700 tonnes of steel), which doubly Infrastructure Fund Award. the Company traditionally deployed mainly the traverses the tube of the Strahov automobile Drill & Blast excavation technology used on tunnel in Prague 5, designed to create a solid

16 2

3

1 foundation for the construction of six-storey 4 luxury residential buildings Sacre Couer 2. [4]

The proven quality and capabilities of the reinforced concrete structures technology operation of Division 6 were in 2015 demonstrated in several projects for the construction of large-scale and complex residential compounds. This type of construction is extremely demanding in terms of the speed of building, which places ever greater demands on the professionalism of all Division employees. [1]

The focus of Division 8 on the implementation 5 of complex projects with a predominance of technological part over the building part has scored successes in the fields of chemistry, petro chemistry and energy. An example of such project executed in 2015 is the construction of tanks for the storage and handling of sulphuric acid and nitric acid in the fully operational Lovochemia compound in Lovosice. [5]

17 Business development of Metrostav Group

Metrostav a.s. is the leader of the Metrostav Group, consisting of a total of 35 entities operating primarily in construction, trade and development. The Group’s key members include a consortium of firms led by Subterra a.s., which besides the Czech market operates on the Swedish, Hungarian and German markets, and Austria’s BeMo Tunnelling GmbH with a portfolio of entities operating in Germany, Sweden and the United Kingdom.

18 Other Group members comprise Metrostav Development, Pragis, BES, Metrostav Slovakia, PK Doprastav, Doprastav Asfalt and other specialized companies working on construction sites in all regions of the country and abroad.

19 Business development of Metrostav Group Continuous strengthening of capacities and expansion of activities of Metrostav Group

The Metrostav Group invests in Metrostav Group capacities are represented across the board in selected construction Specialized activities the development of the Group’s segments and supporting activities: n Testing (incl. state-of-the-art equipment for capacities in the whole chain of camera and pressure testing, exploratory and diagnostic projects). construction activities. In the Technology and n Surveying (incl. new technologies of past year, the Group upgraded close-range photogrammetry and laser machinery interferometry). equipment mainly in the segment n Tunnel boring using TBM and NRTM n Development. of construction of asphalt and technology. n Property management. n Collector boring. cement-concrete surfaces n Steel and reinforced concrete structures. and acquired new testing n Foundation engineering. n Bridge construction. equipment. The implementation n Asphalt and concrete pavements. of a large‑scale residential n Railways. development project commenced in Slovakia, and conditions were Building materials n Asphalt suppliers (incl. new technologies of created for launching major silent asphalt production). commercial development projects n Quarries. n Concrete plants. in the Czech Republic. In addition, n Sales of construction materials. a new structural engineering division was set up in Germany.

20 Some of a number of major construction projects implemented in 2015 by Metrostav Group’s companies include: n Reconstruction of the Alter Kaiser-Wilhelm railway tunnel by Subterra a.s. n Construction of the double-track railway tunnel for light rail line in Karlsruhe by BeMo Tunneling GmbH. n Implementation of the CityPark Ružinov residential housing project in Bratislava by Metrostav Slovakia a.s. n Rehabilitation of flood damage at Pankrácká štola, Prague 4 by Pragis a.s. n Modernization of the weir and construction of the Hněvkovice lock by Zakládání staveb a.s. n Implementation of the Na Vackově residential housing project in Prague by Metrostav Development a.s.

21 Business development of Metrostav Group

A total of 4,600 metres of tunnels were bored using the TBM method.

So far laid 152 km of railway superstructure.

Production capacity of new BES asphalt plant: tonnes of bituminous mixtures 200 per hour.

Produced in 2015: 1,612,000 tonnes of aggregate.

22 600,000 tonnes of asphalt.

261,000 m3 of ready-mix concrete.

Construction projects offering a total of residential apartments and commercial premises. 1,067

m2 545,555of managed properties.

23 Social responsibility priorities

In its business operations the Company has been committed to the principles of sustainable development in that it ties meeting its strategic targets to adherence to social responsibility priorities. Metrostav has formulated six key social responsibility priorities. These priorities pertain to the areas in which the Company’s operations have significant environmental, social and economic impacts on the relevant locations.

24 and continuous improvement of quality and In cooperation with the three largest civil Transparent business labour efficiency. Metrostav’s key certified engineering faculties in the Czech Republic, Metrostav ranks among the leading technologies are covered by the quality Metrostav has also participated in the CESTI businesses in the Czech Republic and is management certificate for general contracting research projects (Centre for Effective and committed to responsible conduct. The that fully complies with the ČSN EN ISO 9001 Sustainable Transport Infrastructure). The Company is aware of the benefits and impacts standard. Company has been involved in research of its operations as an entity affecting the related to bridges and tunnels. The bridge market environment, as well as its importance development focuses primarily on the as an employer that instils behavioural Innovations in the application of advanced materials and patterns and the code of ethics in its staff. technologies. Research and development in construction industry the segment of tunnel construction is focused Criminal compliance programme The Company strives to make a significant on progressive designs of tunnel lining - The Company has declared zero contribution to a better environment in especially waterproof concrete lining and tolerance for any unethical behaviour. the construction industry by developing use of fibre-reinforced concrete for pre-cast In June 2015 the Company’s bodies adopted innovative products and solutions that create lining. In 2015, Metrostav spent approximately a comprehensive criminal compliance added value and help build quality and energy CZK 2.4 million on developing solutions for programme concerning rules of ethical and efficient structures. CESTI. The centre’s activities are scheduled legal conduct of the Company. It defines until 2019. clear rules of dealing with employees, Cooperation with universities business partners and third parties. Research and development in the field of The corporate governance bodies have paid new building technologies and materials is increased attention to the fulfilment of the carried on in cooperation with universities In 2015 we spent more criminal compliance programme. and major subcontractors. In June 2015, a five-year Science and Research project than CZK 3.7 million Code of Ethics and Ethics Hotline was completed with a successful peer The Metrostav Group has published an review. The project, aimed at increasing the on research updated Code of Ethics stipulating rules of durability of concrete structures exposed behaviour and conduct for Group companies, to extreme load, was co‑funded by the anddevelopment. their employees, members of company Ministry of Industry and Trade and was bodies and collaborating third parties. At the implemented in cooperation with the Faculty same time, an Ethics Hotline was launched of Civil Engineering of Czech Technical Expert activities of employees for reporting suspected unethical conduct by University Prague (ČVUT). The Company’s Metrostav encourages the development of employees, members of the Company bodies staff engaged in core technologies also expert activities; the Company’s employees and collaborating third parties. participated in the programme, as well have carried out independent research for the as other experts specializing in concrete purpose of advancing construction technology. Quality Management System Certificate structures within the Metrostav Group. The Most significant examples include expertise ISO 9001 total cost of the five‑year project amounted in the field of building physics and building The Company is committed to improving the to CZK 16.9 million, of which Metrostav diagnostics, expertise in the development quality of risk management, development contributed about CZK 1.3 million in 2015. and testing of new building materials and of process-oriented company management technologies, and expertise in the development

25 Priority společenské odpovědnosti

of technologies pertaining to waterproof Metrostav Senior Club reinforced concrete structures – “white Our employees Metrostav’s Senior Club continued its tubs”. In 2015, Metrostav worked on dozens activities in 2015. The club has been helping of projects to which this expertise could be Support for employees retired former employees for thirteen years. applied. Metrostav considers care for its employees The Senior Club is a unique project of its a substantial part of its sustainable kind in the Czech Republic and represents The benefits of the research and development development. The Company has demonstrated an important pillar of Metrostav. Currently activities are evidenced by 10 registered the quality of working conditions of employees it has 300 members who participate in utility models and 6 patents of the Company by continuously meeting the requirements regular events organized by the club, such as covering a broad range of construction of the SA 8000 international standard discussions and excursions. segments, such as bridge construction, and the Collective Agreement obligations. industrial buildings, tunnels and installation of In December 2015, the Model Collective technology equipment. Agreement for 2016 and 2017 was entered into between Metrostav Group bodies and In 2015 the Training Most important examples for 2015 include the Coordination Trade Union Committee two patent-protected technical solutions, one of the Metrostav Group, and Model Internal Centre ensured applied in the construction of segmental lining Regulations for 2016 and 2017 were for the TBM method, and the other in handling drafted for companies with no trade union 574 professional heavy technology equipment in enclosed organizations. Within the framework of the spaces. Model Collective Agreement, the Collective courses for Agreement for Metrostav, a.s. for 2016 and Metrostav also supports progressive 2017 was concluded. 6,170 trainees. technology in design - BIM (Building Information Modeling/Management). It is Metrostav Social Fund a modern and in many ways revolutionary Employees who faced difficult life situations Metrostav Group Training Centre approach to the implementation of projects in 2015 could turn for help to Metrostav’s Metrostav has continuously paid increased in the field of construction production. Social Fund established in 1994. Emergency attention to employee training and improving It facilitates the ability to control the project assistance was provided to 156 employees knowledge and skills of all employee groups. documentation in order to detect and eliminate in 2015, amounting to CZK 1.8 million. Training programmes attended by nearly 6,000 errors at an early stage. An integral part of BIM employees annually are prepared by Metrostav is the relationship between construction and Group’s Training Centre. the environment and the pursuit of sustainable development construction. In the event The Social Fund helps In 2015, a training system for a technical clients are interested in obtaining higher-level staff group through professional technical international environmental certificates LEED nearly 160 Metrostav seminars was developed with the goal to and BREEAM, the relevant projects must be improve their preparedness to respond prepared in high quality using the BIM system. employees a year. effectively to the current conditions of the construction market in the Czech Republic and new trends in construction materials and technological processes. These training events

26 were accredited by ČKAIT (Czech Chamber of Skilled Apprentices project We are committed to a comprehensive Certified Engineers and Technicians Active in Cooperation with secondary technical schools apprenticeship system Construction) for life-long training of certified has been further expanded in the Skilled Metrostav is the only construction technicians and engineers. Apprentices project. The goal of the project, company in the Czech Republic that implemented for eight years already, is to maintains a comprehensive system of Similarly to previous years, Metrostav also increase primary school children‘s interest training apprentices. The Company actively invested in training of future employees by in construction industries and transfer of participates in drafting specific proposals supporting technical secondary schools and know‑how to young craftsmen. related to innovation of the school education universities. The Company organizes lectures programme for construction fields. Metrostav after classes delivered by its employees, as The project collaborates with schools in employees take part in student examinations, well as field trips, practice and internships, and Prague, Brno and Ustí nad Labem. In 2015, discuss the quality of apprenticeships at the also helps with writing theses. Another form the Company selected new schools for Ministry of Education, Youth and Physical of support is sponsorship; for example, in the cooperation and added five regional technical Training of the Czech Republic, and are past year the Company provided partnering secondary schools to the previous three co‑authors of the Draft Systemic Measures for secondary schools with materials needed contracted schools. Metrostav financially the Improvement of the Quality of Secondary for practical training (cement, gravel, steel supports the students during their studies and Technical Education. A pilot model of mesh) and supported a photo competition arranges practice for them at its workplaces. a different structure of theory and practice is titled Through Your Eyes, organized by Czech to be launched in the 2016/2017 school year. Technical University in Prague. Metrostav Approximately 9,000 hours of professional hired a total of 59 university graduates and training is organized at the Company’s Teaching activities and employee engagement 32 graduates of secondary schools in 2015. workplaces each year and annual costs Many employees are engaged outside of supporting students amount roughly Metrostav. They are, due to their professional to CZK 3 million. Last year, a total of expertise, respected educators, members 82 contracted students were trained for of specialized associations and authors of 50–60 university the jobs of bricklayer, carpenter, mechanic, scientific publications. Teaching fields in locksmith and electrician. 26 apprentices which Company employees actively participate graduates join started employment with the Company. include e.g. geotechnics, underground structures and thermal insulation of buildings. Metrostav teams each In addition, Company employees are active members of fifteen Czech and international year. Our company The Skilled Apprentices professional associations. ranks among the project has supported Professional conferences also received Metrostav’s support in 2015. The Company most sought-after 330 students was a partner to a round table discussion on FIDIC Standards in the Czech Republic, employers in the Czech since 2008. organized by the Association for Infrastructure Development, as well as the celebration of Republic. World Water Day 2015, the conference “Small nuclear reactors for the power sector and their

27 Priority společenské odpovědnosti

potential use in the Czech Republic” and the the occupational health and safety (OHS) awards. In addition, the programme is Žofín Forums. It also sponsored the Czech management system in compliance with the regularly used for more thorough training of Construction Academy of the ABF Foundation ČSN OHSAS 18001:2008 national standard. employees and for stepped-up inspections and and supported the Watercourses 2015 Under the OHS system, OHS specialists oversee feedback in the OHS area. conference. the construction process and documentation control and they also monitor the processes Safe Company title performed by subcontractors with an emphasis The proof of quality of OHS management Construction site on compliance with all occupational health and is winning the sixth Safe Company title safety regulations. sponsored by the State Labour Inspection safety Office. The award demonstrates that the One of the Company’s top priorities is to ensure Safe Workplace programme Company consistently meets the implemented conditions for safe work for everyone working The Company annually organizes an internal safety policy and uses it to promote its at construction sites or engaged in Metrostav’s motivational programme Safe Workplace approaches and intentions related to operations. The Company is committed to high- aimed at motivating teams working at occupational health and safety issues. quality execution of construction projects while building sites and other workplaces to ensuring maximum levels of occupational health engage in occupational safety issues. The The Company has managed to keep the and safety. programme also rewards the teams that excel occupational accident rate at considerably in professional occupational safety and record lower levels than is the statistical average Occupational health and safety management zero accidents. in the mining and construction industries system in the Czech Republic. The implementation As part of the Integrated Management System, Over the six years of the motivational of new technology, such as the deployment Metrostav has implemented and certified programme, a total of 69 teams have received of full-profile tunnelling shields for boring railway tunnels in Ejpovice, has contributed to reducing work and health risks. Chart of occupational accident rates per 100 Metrostav employees*

2.5 Environmental 2 protection Part of Metrostav management is 1.5 a responsible approach to environmental 1 protection and its implementation through the environmental management system 0.5 EMAS No. 1221/2009.

0 It is a tool allowing the Company to actively 2010 2011 2012 2013 2014 2015 monitor, manage and assess its operations in mining CZ relation to the environment. The environmental Building CZ management system has been significantly Metrostav a.s. *Statistical data on the construction and mining industries for 2015 are not available. enhanced by its certification within the scope

28 of the requirements of the EN ISO 14001 the second (silver) certification level, but due Volunteerism standard awarded to the Company in 2001. to the excellent work of Metrostav engineers Under the umbrella of corporate volunteerism, The Company strictly meets all regulations the building was awarded the highest LEED a volunteer day for students and graduates and conditions of the published decisions Platinum certification as the first production was organized in 2015 as part of an adaptation in all areas of environmental protection and plant in Central and Eastern Europe. course aimed at inter-connecting new young creation. Maintaining data records (emissions, employees. Students helped non-profit waste, fees, etc.) is conducted to the extent organizations with building modifications, e.g required by Czech legislation and summary Corporate citizenship in a nursery school. year reports are submitted to the public Metrostav and its employees are aware of their administration authorities of the Czech responsibility towards the regions where the Increased attention was also paid to health Republic within statutory timeframes. Company operates and the people who live education. For example, an educational project in them. The Company has been committed for prevention of cancer of the colon and rectum Metrostav’s consistent endeavours to being a good and responsible neighbor took place directly in the lobby of Palmovka Park demonstrate that the Company has fulfilled all receptive to the needs of the locals. To this II under the name Střevo Tour (Intestine Tour). obligations stipulated by Czech environmental end, the Company has long funded a number The event was organized by the civic association legislation, as well as its readiness to meet of educational, health and other non-profit OnkoMaják. global requirements in this field. organizations and their projects. Employees themselves join in corporate We recycle 75 % of our waste Donate Your Blood with Metrostav project charitable activities, as evidenced by a great Metrostav has determined that waste is the Metrostav’s employees donate blood within the number of single and standing payment orders most significant environmental aspect of scope of the regular drive “Donate Your Blood for contributions to SOS Children‘s Villages, construction production, in particular hazardous with Metrostav”. More than 100 employees the UNICEF Children‘s Fund, the BARRIERS waste. In 2015, we succeeded in reusing 75% donated nearly 40 litres of blood to the Central Account, the Clown Doctor, the Firefly event of the waste produced by Metrostav divisions. Military Hospital in Prague in 2015. Over of the Czech Radio Foundation Fund and other the decade of the project’s existence, the charitable projects. Sustainable construction Company’s employees donated in excess of Environmental sustainability of the completed 500 litres of blood. Metrostav is proud of the completed project for projects is important for Metrostav. For this the construction of a small hydroelectric power reason, the Company’s goal is to increase the plant in Štětí on the river Elbe, which was put proportion of green buildings. In total, the into full operation in early 2015. Metrostav built Company has completed six buildings that Metrostav employees the plant jointly with Zakládání staveb, a.s. as were awarded LEED, BREEAM and SBToolCZ a turnkey project for the non-profit organization international environmental certification, have donated over Energeia and also secured its funding. The Štětí and three additionally certified construction plant’s operation will provide a constant source projects according to the BREEAM and DGNB 500 litres of blood of revenue for Energeia’s non-profit activities guidelines. (primarily hospice care for children) pursued in since 2005. partnership with the Klíček Foundation Fund. An example of success in this field is a new production plant built for SKF Lubricon in Chodov near Karlovy Vary. The project required

29 Bodies of the Company as at 31/12/2015

Board of Directors Ing. Jiří Bělohlav Chairman of the Board of Directors Member since 11 October 2000 Vice-Chairman since 11 May 2007 Chairman since 1 July 2009 Ing. Zdeněk Šinovský Vice-Chairman of the Board of Directors Member since 31 December 1990 Vice-Chairman since 1 July 2009 Ing. Ján Dudáš Member of the Board of Directors Member since 11 October 2000 Ing. Daniel Knotek Member of the Board of Directors Member since 11 May 2007 Ing. František Kočí Member of the Board of Directors Member since 10 May 2010 Ing. Viliam Turanský Member of the Board of Directors Member since 7 May 2014 Ing. Ivan Šesták Member of the Board of Directors Member since 11 October 2000

Supervisory Board Ing. Jindřich Hess Chairman of the Supervisory Board Member since 11 May 2007 Chairman since 11 May 2007 Ing. František Klepetko Vice-Chairman of the Supervisory Board Member since 7 May 2014 Vice-Chairman since 24 June 2014 Ing. Viktor Karel Member of the Supervisory Board Member since 11 October 2000 Ing. Jiří Karnet Member of the Supervisory Board Member since 23 July 2010 Head of Accounting of Metrostav a.s. Pavel Meyer Member of the Supervisory Board Member since 20 July 1993 Chairman of the Stavba trade union organization of Metrostav a. s. Ing. František Potisk Member of the Supervisory Board Member since 11 May 2007

Audit Committee Ing. Tomáš Brumovský Chairman Member since 29 September 2009 Auditor Ing. Jiří Karnet Member Member since 29 September 2009 Head of Accounting of Metrostav a.s. Ing. Lukáš Kvapil Member Member since 7 May 2015 Auditor

30 Top Management as at 31/12/2015

Presidium Ing. Jiří Bělohlav President Ing. František Kočí Vice-President Chief Executive Officer Ing. Pavel Pilát Chief Executive Officer Chief Officers Ing. Ivan Hrdina Chief Production and Technology Officer Ing. Miroslav Pánek Chief Financial Officer Ing. Milan Veselský Chief Sales Officer Mgr. Tomáš Zámečník Chief Human Resources Officer Division Directors Ing. Jaroslav Heran Director, Division 1 Ing. Martin Plch Director, Division 3 Ing. Josef Neuwirth Director, Division 4 Ing. Roman Fuksa Director, Division 5 Ing. Jan Cuc Director, Division 6 Ing. Ivo Vrbka Director, Division 8 Ing. Petr Zábský Director, Division 9 Ing. Zdeněk Ševčík Director, Division 11

31 Metrostav Group Structure

Metrostav a.s. Subterra a.s. Building production TERRAFIN GROUP, a.s. STAVEBNÍ OBNOVA ŽELEZNIC a.s. Subterra - Raab Kft. SBT SVERIGE AB Metrostav Slovakia a.s. PRAGIS a.s. Metrostav Ísland ehf. Metrostav Deutschland GmbH BES s.r.o. DSH - Dopravní stavby, a.s. BeMo Tunnelling GmbH BeMo Tunnelling GmbH, Deutschland Beton- und Monierbau USA, Inc. ALPINE BeMo Tunnelling Canada Inc. Morgan Beton- and Monierbau Limited Metrostav Polska S.A. METROSTAV ANKARA İNŞAAT TAAHHÜT SANAYİ VE TİCARET ANONİM ŞİRKETİ

SQZ, s.r.o. Services Metrostav stavebniny, s.r.o. PRO Asfalt, s.r.o. TBG METROSTAV s.r.o. Pražské betonpumpy a doprava s.r.o. TBG Pražské malty, s.r.o. CCE Praha, spol. s r.o. CCE Bratislava, spol. s r. o. PK Doprastav, a.s. Doprastav Asfalt, a.s. Industrial Property services, s.r.o. Metrostav Facility s.r.o.

Metrostav Development a.s. Property development Metrostav Rezident a.s. Metrostav Alfa s.r.o. Vilapark Klamovka s.r.o. Metrostav Vackov a.s. Metrostav Epsilon s.r.o. Nad Belárií s.r.o. Apartmány Rokytnice a.s. IMU, a.s. Na Vackově, s.r.o. Bytový dom Nejedlého, s.r.o. PRO TP 06 s. r. o.

Metrostav Nemovitostní, investiční fond s proměnným základním kapitálem, a.s. Other MVE Štětí a.s.

Metrostav Group Other Metrostav Group companies in which Metrostav a.s. holds direct or indirect interests

32 Key consolidated figures of Metrostav Group in 2011–2015

2011 2012 2013 2014 2015 operating income CZK thousand 26,113,858 26,674,821 27,631,473 30,531,704 31,627,141 operating expenses CZK thousand 25,082,790 25,238,122 26,378,193 29,769,362 30,704,977 profit from operations CZK thousand 1,031,068 1,436,699 1,253,280 762,342 922,163 profit before tax CZK thousand 1,130,361 740,644 560,737 774,670 852,310 net profit CZK thousand 867,394 434,772 358,425 538,782 590,288 total assets CZK thousand 23,642,219 23,314,292 26,370,312 26,514,587 25,945,561 total non-current assets CZK thousand 6,506,395 6,411,918 6,692,153 7,454,341 5,946,634 total current assets CZK thousand 17,135,824 16,902,374 19,678,159 19,060,246 19,998,927 total equity CZK thousand 7,786,246 8,016,619 8,179,645 8,574,242 8,936,364 total non-current liabilities CZK thousand 2,233,102 3,047,609 2,893,456 3,389,396 2,792,317 total current liabilities CZK thousand 13,622,871 12,250,064 15,297,211 14,550,949 14,216,880

FTE employees people 4,428 4,686 4,904 5,011 5,068

Operating income

CZK thousand 35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 2011 2012 2013 2014 2015

Profit before taxes CZK thousand

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0 2011 2012 2013 2014 2015

33 Contact information

Head office Koželužská 2450/4 180 00 Prague 8 – Libeň tel. +420 266 019 000, +420 266 018 000 www.metrostav.cz

Division 1 Division 5 n Regional office Koželužská 2450/4, 180 00 Prague 8 Koželužská 2450/4, 180 00 Prague 8 for the Ústí nad Labem region tel. +420 266 018 102 tel. +420 266 018 511 Dělnická 7, 400 04 Trmice n Regional office for the Plzeň region n Metrostav a.s., sivuliike Suomessa tel. +420 475 620 099 Domažlická 172, 318 00 Plzeň Pormestarinrinne 8B, n Представительство Компании tel. +420 377 306 011 00160 Helsinki, «Metrostav a.s.» n Regional office for the South Moravia region tel. +358 456 524 960 Улица Ю. Фучика, 17/19, 115127 г. Москва Vídeňská 121, 619 00 Brno n Metrostav a.s. útibu á Íslandi Российская Федерация tel. +420 530 506 480 Ármúli 24,108 Reykjavik, Iceland n Regional office for the North Moravia region tel. +354 840 13 12 Zámostní 1238/39, 710 00 Ostrava n Metrostav a.s., filial Norge Division 9 tel. +420 595 620 964 tel. +420 606 705 473 Koželužská 2450/4, 180 00 Prague 8 tel. +420 266 018 913 n Regional office for the East Bohemia Division 3 Division 6 region – Hradec Králové Koželužská 2450/4, 180 00 Prague 8 Koželužská 2450/4, 180 00 Prague 8 Eliščino nábřeží 304, tel. +420 266 018 302 tel. +420 266 018 612 500 03 Hradec Králové n Regional office for the Košice and n Regional office for the South Bohemia tel. +420 602 156 299 Prešov regions region n Regional office for the East Bohemia Levočská 2, Prešov, 081 89 Slovakia Kněžská 20, 370 26 České Budějovice region – Pardubice tel. +421 512 861 495 tel. +420 386 351 774 K Vinici 1605, n Представительство АО «Metrostav a.s.» n Regional office for the Vysočina region 530 02 Pardubice в Республике Беларусь Fibichova 939/4, 586 01 Jihlava tel. +420 464 601 843 220002 Республика Беларусь, г. Минск tel. +420 567 589 120 n Regional office for the Karlovy Vary Ул. Киселева 55 n Metrostav a.s., podružnica Zagreb Závodní 278, Тел./факс +375 445 959 543 Tuškanac 79,10000 Zagreb, 360 01 Karlovy Vary tel. +385 914 814 584 tel. +420 353 564 062 Division 4 Koželužská 2450/4, 180 00 Prague 8 Division 8 Division 11 tel.+420 266 018 411 Koželužská 2450/4, 180 00 Prague 8 Bystrá 2243, n Metrostav S.A., oddział w Polsce tel. +420 266 018 811 193 00 Prague 9 – Horní Počernice ul. Strażacka 81, n Regional office for the Liberec region tel. +420 266 011 163 43-382 Bielsko-Biała, Poland Třída Generála Svobody 45/27, tel. +48 338 196 321 460 01, Liberec 13 tel. +420 485 111 002

34 This report is not published as an Annual Report pursuant to applicable legislation.

The Company’s financial statements for 2015 and consolidated financial statements for 2015 were audited by PricewaterhouseCoopers Audit, s.r.o., which expressed its unreserved opinion.

© 2016 Metrostav a.s. Design Side2 Consultancy and production ENTRE s.r.o. 36 III