SRV Group Annual Report 2004

Annual review 2004

Photo: Viru Centre, Tallinn, Estonia

SRV GROUP LTD SRV VIITOSET LTD SRV TERÄSBETONI LTD SRV WESTERLUND LTD SRV INTERNATIONAL LTD Niittytaival 13 Niittytaival 13 Niittytaival 13 Niittytaival 13 Niittytaival 13 PO Box 500, 02201 Espoo PO Box 555, 02201 Espoo PO Box 505, 02201 Espoo PO Box 515, 02201 Espoo PO Box 525, 02201 Espoo FINLAND FINLAND FINLAND FINLAND FINLAND tel. +358 201 455 200 tel. +358 201 455 500 tel. +358 201 455 700 tel. +358 201 455 300 tel. +358 201 455 250 fax +358 201 455 245 fax +358 201 455 567 fax +358 201 455 750 fax +358 201 455 338 fax +358 201 455 278 [email protected] [email protected] [email protected] [email protected] [email protected] www.srv.fi www.srvviitoset.fi www.srvterasbetoni.fi www.srvwesterlund.fi www.srvinternational.fi Business idea Vision The SRV Group fulfils its The SRV Group will be the customers’ individual needs as leading developer and project users and owners of buildings in management contractor in its partnership with the customers. business area as well as a sought-after partner.

Contents Values In its business, the SRV Group applies President’s Review 4 the following key values: Corporate Management Group 5 Reliability Key Figures and Main Events 6 Open cooperation Project and Real Estate Development 8 Service-mindedness Commercial and Business Premises Construction 10 Efficiency and productivity Industrial, Logistical and Infrastructure Construction 12 Development and Housing Construction 14 personal improvement International Construction 16 SRV’s Regional Business 18 Safety 19 The SRV Group’s strategic targets are as follows: Environment 21 Strategy Enhancing competitiveness In operations, particular effort is deployed in the Personnel Report 22 development of customer-centredness and partnership as well as in personnel and Board of Directors 24 operating processes. Group Companies 25 Profitability The management of business foci, costs and risks will be concentrated on. Review by the Board of Directors 26 Growth Focusing on housing construction, regional business in Finland, and Russia and the Baltic countries. Key Figures 28 Internationalisation Russia and the new EU member states are the main subjects. Profit and Loss Accounts 31 Business diversification The main thrust is on augmenting and developing the Balance Sheet 32 construction value chain on the basis of the customers’ needs.

SRV in brief SRV Group Plc is Finland’s leading project management contractor, building commercial and business premises, housing, and industrial and logistical projects as well as developing properties. The SRV Group’s business area is Finland plus the Baltic countries and Russia. The main emphasis in and orientation of the services of the SRV Group are towards the innovative development of projects and project management contracting with the in-house SRV model. SRV carries out its projects in a broad-based partnership with a professionally skilled network of specialists and suppliers. Of key importance to the SRV model are network management and the reliable and customer-friendly implementation of the construction project process as well as professional total management.

2 Vision, mission, values and strategy 3 Business idea Vision The SRV Group fulfils its The SRV Group will be the customers’ individual needs as leading developer and project users and owners of buildings in management contractor in its partnership with the customers. business area as well as a sought-after partner.

2 Vision, mission, values and strategy 3 A successful year of growth and ”The key themes are the development of development service, expertise and innovativeness.”

For SRV, 2004 was marked by dynamic ing construction and initiated a number knowledge of the country’s business growth, a good net profit, and progress. of other projects in cooperation with its conditions will be strengthened. The Group’s net sales grew by almost 50 customers. A significant concern, in ad- The cyclic outlook for construction in per cent and the net profit improved by dition to enhancing profitability, is to 2005 is good. Construction of housing more than 40 per cent. A number of spread growth in operations more evenly and business premises will continue to development projects were launched in several market areas and segments. be brisk and office construction is during the year. The Viru Centre was This will promote the Group’s risk man- expected to recover. For industrial, lo- completed and the other big project, the agement and even out cyclic fluctua- gistical and infrastructure construction, Kamppi Centre, made positive progress. tions, facilitating strong growth also in the year ahead will also be filled with The SRV Group’s profit before taxes the future. work. In addition to the domestic mar- was MEUR 16,2. The Group improved A number of development projects ket, SRV seeks growth through interna- its profitability, particularly in respect of were carried out during 2004. The tionalisation. Growing business in Rus- housing construction and commercial Group’s management and incentive sys- sia is on the rise alongside operations in construction. The profitability of inter- tems were upgraded, and the personnel’s the Baltic countries. national business also remained good. career development and training systems A good market situation, the stream- Business also grew most dynamically in have been further augmented. The lining of operative functions in line with these same sectors. Return on equity was Group introduced a new key customer the strategy, and deployments in boost- 35.3 per cent and the equity ratio includ- system and continued training for the ing competitiveness, provide SRV with a ing the capital loan was 31.2 per cent. personnel in customer service. Develop- good basis to expect the growth and Orders in hand stood at MEUR 320.8 at ment work continued on environmental favourable trend in earnings to continue year-end. and safety matters, and at the same time in 2005. The Group’s biggest single project, efforts have been deployed in technical I express my thanks to all our partners the Kamppi Centre, made positive expertise in construction and project ma- and to SRV’s own personnel for a work- progress. Demand for the housing and nagement. These and numerous other filled year and for excellent results. business premises has outstripped actions on development have strength- expectations. Construction is ahead of ened SRV’s competitiveness, both as a Hannu Mikkonen schedule and the publicity that the service provider and as a sought-after President and Chief Executive Officer project has received has been positive. employer. The first part of Kamppi will be SRV will continue to invest strongly opened in spring 2005 and the entire in developing its operations in the futu- Management Group complex will be completed in spring re. The key themes will be the develop- 2006. During 2004, another big ment of service, expertise and innovati- The President, CEO Hannu Mikkonen is the chairman of the Group’s Corporate project, the Viru Centre in Tallinn, was veness. This will ensure the exploitation Management Group. The members of the Corporate Management Group are, completed and opened to the public in of the opportunities afforded by constant back row, from left Timo Nieminen (Executive Vice President, Project and Real the spring. The expertise and expe- changes in the business climate. The Estate Development), Marko Heino (SRV Westerlund), Risto Hiekka rience that these projects brought with operations of the Group’s subsidiaries (SRV International), Matti Ukkonen (Chief Financial Officer). Front row from left them form an excellent basis for SRV’s will be streamlined at the same time Matti Kärnä (Executive Director, Development Affairs), Arto Toikkanen future projects as a developer and builder with the goal of stronger focus on the (SRV Teräsbetoni), Juhani Väisänen (Executive Director, Regional Operations), of shopping centres. specific market segment and its special Hannu Mikkonen (President & CEO), Juha Pekka Ojala (SRV Viitoset), In addition to large projects, SRV has features. In international operations, lo- Virpi Ahonen (Manager, Corporate Communications). particularly increased its output in hous- cal organisations with excellent

4 President´s review Management group 5 A successful year of growth and ”The key themes are the development of development service, expertise and innovativeness.”

4 President´s review Management group 5 The inauguration of the Viru In September, SRV Teräsbetoni An extension to a retail facility Main events for Centre in Tallinn was held on 7 May started a significant rock excava- in the northwest of St Petersburg, 2004. The Viru Centre contains an tion project in the Vallila district contracted by SRV Russia Ltd, the SRV Group international-standard shopping of Helsinki. The Rock Vallila was completed in December. centre, restaurants, apartments, underground car park will be The shopping centre is well- in 2004 offices, and an underground bus competed by the end of 2006 and known in St Petersburg as the terminal and car park. The complex the facility will provide both first Western-style facility of also includes the Sokos Hotel Viru, long- and short-term parking. its kind. See a photo below. which was both renovated and extended. See a photo below.

SRV Viitoset Ltd and Restel Oy In the Tondi district of Tallinn, embarked on collaboration for the Estonia, the construction of a 15- completion of a hotel project in the storey apartment building was Ruoholahti district of Helsinki. started in October. The modern Key figures 2004 2003 Construction work began on the high-rise building Osten Tor will 250-room hotel in spring 2004 and have views over the whole of it will be ready to welcome visitors Tallinn. Osten Tor is being built to the World Championships in as a partnership project by Group Group net sales MEUR 403 MEUR 276 Athletics in summer 2005. companies and it will be completed in the beginning of 2006. Profit before taxes MEUR 16.2 MEUR 9.8

Equity ratio 31.2% 26.5%

-including capital loan SRV Viitoset won the occupational The topping-out ceremony was In November, SRV Viitoset safety competition held at Finland’s biggest building received an award of distinction between major building companies site, the Kamppi Centre, on 26 from the European Agency for Return on investment 25.4% 24.6% for the fourth consecutive time. May 2004. In terms of time, the Safety and Health at Work for its There were 22 corporate entrants project was in midstream – the excellent practical solutions. Return on equity 35.3% 29.2% from the building construction Kamppi Centre will be completed industry. SRV Teräsbetoni won the in spring 2006. Personnel (average) 603 524 challange cup in the series for building construction companies.

Net sales per company

8.4% 6.5% 55.6% SRV Teräsbetoni’s WISA 800 In August, SRV Westerlund SRV Russia signed an SRV Viitoset was selected in project for UPM Kymmene in began building the Puu-Ylästö agreement in October for the November as the subcontractor Pietarsaari was completed. The housing area in Vantaa in partner- construction of the first Park Inn for IdeaPark, a shopping tourism lye recovery line was one of the ship with VVO. The Puu-Ylästö hotel in Yekaterinburg, Russia. facility in Lempäälä. The biggest contracts in the history of district will have 123 modern The 160-room hotel will be construction project will have 14.4% SRV Teräsbetoni. detached and semidetached opened in autumn 2005. 10 hectares of floor area. houses made of wood. The earthwork on the 30-hectare SRV Viitoset ■ site began in January 2005. SRV Westerlund ■ SRV Teräsbetoni ■ SRV International ■ 15% Other companies ■

6 Main events Key figures 7 The inauguration of the Viru In September, SRV Teräsbetoni An extension to a retail facility Main events for Centre in Tallinn was held on 7 May started a significant rock excava- in the northwest of St Petersburg, 2004. The Viru Centre contains an tion project in the Vallila district contracted by SRV Russia Ltd, the SRV Group international-standard shopping of Helsinki. The Rock Vallila was completed in December. centre, restaurants, apartments, underground car park will be The shopping centre is well- in 2004 offices, and an underground bus competed by the end of 2006 and known in St Petersburg as the terminal and car park. The complex the facility will provide both first Western-style facility of also includes the Sokos Hotel Viru, long- and short-term parking. its kind. See a photo below. which was both renovated and extended. See a photo below.

Equity ratio 31.2% 26.5%

Net sales per company

6 Main events Key figures 7 Solutions for all requirements for premises

The SRV Group’s project and real estate on the same concept has been completed development serves building users, own- in Lahti. An HTC-project is also being ers and investors in the construction of planned for Espoo. The first STC-proj- new building projects and in upgrading ects are being implemented in Espoo, existing properties. Project and real es- Nummela and Vantaa. tate development is led by Executive SRV’s project and real estate develop- Vice President Timo Nieminen. ment also carries out various types of The operations include checking out the area development projects, in which the needs related to the project as well as de- aim is to develop an extensive, separate veloping the main attributes of the con- area or an entire city district. Projects of struction to make it a functioning unit. this kind include the K2 urban develop- The developed project is then built to ment project in Vantaa, a development completion using the SRV project man- scheme for the area between Tikkurila agement contracting model. and Helsinki-Vantaa airport, and a de- Project and real estate development velopment project for the Kuninkaan- carries out the tasks related to properties portti district of Porvoo. and their development on a demand-con- trolled basis in partnership with the customer. The development of land use, property strategies, business idea plans and various life cycle solutions are among the basic services of SRV’s project and real estate development. On many projects, the work also includes arranging ”We carry out projects investors and financing as well as handling contacts with officials. on a needs basis Project development’s innovative output also includes state-of-the-art commercial facility concepts: High Tech Centers in partnership (HTC) and Smart Tech Centers (STC) are modern retail and office facility solutions with the customer.” embracing broad arrays of services to match the customer’s intended usage. Solutions can be developed for both international high-tech companies and for medium-sized operators who appreciate technically and functionally high-quality business premises. Two projects on the HTC model have been completed in Photo: WM-Data´s office building Helsinki. The first phase of a facility built in the Pitäjänmäki district of Helsinki.

8 Project and Real Estate Development 9 Solutions for all requirements for premises

8 Project and Real Estate Development 9 Customised solutions for

business needs I have worked for SRV Viitoset since 1990. I have worked as a site foreman and site manager on different jobs. Building process itself has not changed much in 15 years, I believe. However, SRV Viitoset is the leading project man- contracts at present, including the reno- projects are more tightly scheduled and agement contractor in the commercial vation of the main post office building’s they demand more planning in advance and business premises construction sector tallest section, a major renovation of the and process management than before. in Finland. The company`s President is Graniittitalo building, and the renova- At the moment, I am at the Kamppi Juha Pekka Ojala. SRV Viitoset creates tion of Ratakatu 6. Centre site, in charge of the completion office premises, shopping centres, hotels In the Voutila district of Vantaa, con- of the long-distance coach terminal, the and individualised packages based on the tracting for Finland Post’s logistics Espoo bus terminal, the cargo station STC- and HTC-concept using its open buildings continued in 2004 and in and a parking facility. This section of the project management model, according to Kaivoksela the construction of Lidl’s Kamppi Centre is scheduled for comple- the needs of companies. The cornerstones head office began. tion by 15 April. At the same time, a new of SRV Viitoset’s operation are its ability In the Kanta-Häme area, SRV Viitoset eastern entrance to the metro will be to create new-style, original and innova- was chosen as a contractor for the Idea- opened. The other SRV Viitoset site tive solutions for construction projects. Park in Lempäälä. The shopping city managers’ spheres of responsibility in The Kamppi Centre is the largest indi- construction project will have 10 Kamppi have been divided into the de- vidual project for SRV Viitoset and the hectares of floor area. The earthwork on partment store area, office and residen- entire SRV Group. The topping-out of the 30-hectare site began in January tial buildings, and streets and plazas. Finland’s biggest building site, in Helsin- 2005. Other projects include the The entire Kamppi Centre will be com-

ki city centre, was held on 26 May 2004. Kuninkanportti in Porvoo and Keravan- SRV Viitoset Site manager Jukka Nikkola, pleted in spring 2006. The Kamppi Centre is scheduled for portti area projects, where construction In my opinion, the most interesting completion in spring 2006. The complex work is to commence in 2005. technical aspects of the site were related will be comprised of 37,000 square Business premises in accordance with to the rock excavation and in-situ con- metres of commercial space, 12,500 the STC (Smart Tech Center) concept crete work in the early stage of the proj- square metres of offices, 5,700 square are being designed for Nummela and Es- ect. The collaboration between the dif- metres of apartments, parking facilities poo in addition to Vantaa. An HTC ferent parties in the project has been re- and a passenger terminal. The highest- (High Tech Center) project in Espoo is warding. The publicity that the site has profile new building in the Kamppi Cen- under development. An HTC facility in got and the ongoing interest in the envi- tre will be a 6-storey commercial centre. Helsinki was completed in the Ruoho- ronment have added an extra dimension Among the other main projects in lahti district in 2001. to the work. The most surprising things Helsinki was the head office of WM- Construction of commercial and busi- have been the di- Data in the Pitäjänmäki district, compris- ness premises in 2005 is forecast to be on versity and variety ing a modern office building for 900 em- a par with the 2004 level. Due to the large that the large num- ployees. Two large office buildings for amount of vacant existing office space ”An unbiased approach ber of personnel TietoEnator were completed in Lassila. there is no great demand for new office has brought to daily The construction of office building 3 will facilities, but companies are willing to management. be completed before the end of 2005. improve the quality of their office prem- and innovative In Ruoholahti, a hotel project was ises and to consolidate their operations in started in partnership with Restel Oy. more efficient units. The occupancy rate solutions are The construction of the 250-room hotel for commercial premises is currently fair- began in the spring and the hotel will be ly high, but the major commercial proper- the cornerstones completed to accommodate visitors for ty projects scheduled for construction in the World Championships in Athletics in the next few years are likely to affect the of our operations.” summer 2005. SRV Viitoset is also un- market to some degree. dertaking a number of major renovation

10 SRV Viitoset 11 Customised solutions for business needs I have worked for SRV Viitoset since 1990. I have worked as a site foreman and site manager on different jobs. Building process itself has not changed much in 15 years, I believe. However, SRV Viitoset is the leading project man- contracts at present, including the reno- projects are more tightly scheduled and agement contractor in the commercial vation of the main post office building’s they demand more planning in advance and business premises construction sector tallest section, a major renovation of the and process management than before. in Finland. The company`s President is Graniittitalo building, and the renova- At the moment, I am at the Kamppi Juha Pekka Ojala. SRV Viitoset creates tion of Ratakatu 6. Centre site, in charge of the completion office premises, shopping centres, hotels In the Voutila district of Vantaa, con- of the long-distance coach terminal, the and individualised packages based on the tracting for Finland Post’s logistics Espoo bus terminal, the cargo station STC- and HTC-concept using its open buildings continued in 2004 and in and a parking facility. This section of the project management model, according to Kaivoksela the construction of Lidl’s Kamppi Centre is scheduled for comple- the needs of companies. The cornerstones head office began. tion by 15 April. At the same time, a new of SRV Viitoset’s operation are its ability In the Kanta-Häme area, SRV Viitoset eastern entrance to the metro will be to create new-style, original and innova- was chosen as a contractor for the Idea- opened. The other SRV Viitoset site tive solutions for construction projects. Park in Lempäälä. The shopping city managers’ spheres of responsibility in The Kamppi Centre is the largest indi- construction project will have 10 Kamppi have been divided into the de- vidual project for SRV Viitoset and the hectares of floor area. The earthwork on partment store area, office and residen- entire SRV Group. The topping-out of the 30-hectare site began in January tial buildings, and streets and plazas. Finland’s biggest building site, in Helsin- 2005. Other projects include the The entire Kamppi Centre will be com-

10 SRV Viitoset 11 Efficient and economical construction

I am responsible for the project manage- SRV Teräsbetoni provides industrial, lo- nomical operations and high quality, it is ment on the construction of a parking fa- gistical and infrastructural construction essential to have systematic quality cility for Koy Rock Vallila. I have been services. The company`s Managing Di- assurance, and for this purpose SRV responsible for similar excavation proj- rector is Arto Toikkanen. SRV Teräsbe- Teräsbetoni Ltd has developed the ects in the Helsinki area for about 18 toni has as its sphere of operations the constantly updated Teräsbetoni Way years, spending the last year and a half whole of Finland but with the main operating system. The system specifies with SRV Teräsbetoni Oy. I consider my thrust on the Helsinki Metropolitan Area in detail the tasks, actions and responsi- present workplace as very dynamic. The and the major concentrations of industry. bilities for projects. Characteristic of lean organisation structure makes it pos- The customers are mainly large industri- SRV Teräsbetoni projects are rapid sible to decide things independently and al corporations. timetables, with equipment installation to make decisions rapidly. In industrial construction, last year’s taking place side by side with construc- When completed, the 700 parking most important job was the Wisa 800 tion. Systematic project management is places in the Rock Vallila underground project. The lye recovery line at the pulp the surest guarantee that deadlines will car park will do much to facilitate park- mill built for UPM Kymmene in hold. ing in the business area of Vallila. Work Pietarsaari was one of the biggest con- is done on the excavation site in Vallila struction projects in the history of SRV in two shifts. On each shift there are six Teräsbetoni. A module factory was built operatives plus subcontractors. There in Hartola for Finnforest. Its almost are also two shift foremen, a site engi- 20,000 square metres of facilities were neer and a site manager. The excavated completed on an accelerated timetable in stone is loaded and removed by a sub- half a year. contractor. We perform the actual tun- In logistics construction, the main nelling excavation ourselves. SRV project was an office building completed Teräsbetoni Oy has invested a great deal in Vantaa for Oy Beweship AB. In spite in rock excavation machinery. of the tight schedule, the project was brought to completion in just over eight months. Extensions to sheds 1 and 6 in Mustola were completed in the harbour zone in Lappeenranta.

Construction manager Jukka Luojus, SRV Teräsbetoni SRV Luojus, Jukka manager Construction The biggest project in infrastructure construction was the start-up of excavation for an underground car park in the ”Quality assurance Vallila district of Helsinki. The project, which is being built for Kiinteistö Oy enables us Rock Vallila, is a spec project by SRV Teräsbetoni and it is located centrally among the workplaces of Vallila. It will to guarantee have 700 parking spaces on two levels and the project will be completed in firm timetables.” 2006. A major investment was made in infrastructure construction with the procurement of two Jumbo drills for tunnel excavation. To attain efficient and eco-

12 SRV Teräsbetoni 13 Efficient and economical construction

Construction manager Jukka Luojus, SRV Teräsbetoni The biggest project in infrastructure construction was the start-up of excavation for an underground car park in the ”Quality assurance Vallila district of Helsinki. The project, which is being built for Kiinteistö Oy enables us Rock Vallila, is a spec project by SRV Teräsbetoni and it is located centrally among the workplaces of Vallila. It will to guarantee have 700 parking spaces on two levels and the project will be completed in firm timetables.” 2006. A major investment was made in infrastructure construction with the procurement of two Jumbo drills for tunnel excavation. To attain efficient and eco-

12 SRV Teräsbetoni 13 I am construction manager responsible Homes for the city centre for the Puu-Ylästö housing project. In addition to Puu-Ylästö, I have three and for the peace of housing developments under my super- vision in Kirkkonummi, Vihti and Rii- himäki. the countryside A total of 123 homes are being built in the Ylästö neighbourhood in three phas- es. Detached and semidetached houses, small and large homes, and single- and two-storey houses are being built here. SRV Westerlund is responsible for hous- large, contiguous pedestrian area and a The areas under construction in phase I ing construction within the SRV Group. park plaza. The apartments will have a have been named after berries. The company`s Managing Director is direct lift connection to the shopping Puu-Ylästö is being built under a part- Marko Heino. SRV Westerlund’s sectors centre and to the car park and passenger nership contract agreement, meaning of business include both construction terminal areas. SRV Westerlund is responsible for the and renovation. Construction services Demand for low-rise house areas of project management contract, VVO acts include partnership construction, hous- houses in particular is growing constant- as the client, and Finnforest supplies the ing development and competitive con- ly. In 2004, SRV Westerlund started ma- prefabricated wooden panels to the site. tracting. SRV Westerlund’s sphere of op- jor house projects in Vantaa, Porvoo and Construction is done in the form of an erations is the Helsinki Metropolitan other places. In Vantaa, the first phase of open partnership, making it possible to Area and the surrounding municipalities. the Puu-Ylästö low-rise area, a partner- figure in specific features of an individ- The Group’s internal collaboration on ship project with the city of Vantaa, ual project and the residents’ needs and area development projects and interna- VVO and Finnforest, is reaching com- wishes for things like floor plans and tional projects has been extremely pro- pletion. The three-stage construction materials at the design stage and to add ductive. project will comprise a total of 123 to them during the construction period. The company enjoyed a year of homes representing a new, modern I have worked for SRV for seven years. growth in 2004 in terms of both net sales house architecture. In Porvoo, a house I started with Tehorakentajat Oy as a site and net profit. The largest projects were project has been started in Jokineito – foreman, from which I was promoted the start of housing construction in the nine detached houses, one semidetached through various building sites and corpo- Kamppi Centre in the heart of Helsinki house and two rows of terraced housing. rate mergers to site manager and later to and the Puu-Ylästö area development in The location is unique, offering city- Oy SRV Westerlund Construction manager Ari Kalliomaa, my present post. My varied earlier practi- Vantaa. Among the major new openings centre homes by the Porvoo River next cal experience of work is still useful to were the start-up of housing develop- to Engel Park. me in doing my present job. There are ment in the municipalities surrounding SRV Westerlund is carrying out a joint many things about building that you can the Helsinki Metropolitan Area and the project with SRV International and SRV only learn through experience. The pass- joint project Osten Tor in Tallinn. Kinnisvara AS in the form of a housing ing on of information from one profes- SRV Westerlund provides its cus- project in Tallinn. The Osten Tor apart- sional to another is crucial. tomers with a comprehensive package of ment building will have 158 apartments partnership construction services. This on 15 storeys, with impressive views includes land procurement, planning, across Tallinn to the Gulf of Finland. project control, handling official mat- Housing construction continues in the ters, and construction. In partnership centres of population and the number of construction, the know-how and re- housing starts is forecast to be on a par ”We provide a sources of the client, builder and design- with the figure for 2004. Repairs and ers are pooled at an early stage of the maintenance business continues to grow comprehensive construction project. This ensures the dynamically. In accordance with its best possible expertise and common growth strategy, SRV Westerlund Oy package of services goals throughout the project. will aim for significant growth in its net Among the projects in hand, the sales and net profit in 2005. for partnership biggest are high-quality apartment buildings with a total of 99 apartments, construction.” forming part of the Kamppi Centre. The apartments will be located beside a

14 SRV Westerlund 15 I am construction manager responsible Homes for the city centre for the Puu-Ylästö housing project. In addition to Puu-Ylästö, I have three and for the peace of housing developments under my super- vision in Kirkkonummi, Vihti and Rii- himäki. the countryside A total of 123 homes are being built in the Ylästö neighbourhood in three phas- es. Detached and semidetached houses, small and large homes, and single- and two-storey houses are being built here. SRV Westerlund is responsible for hous- large, contiguous pedestrian area and a The areas under construction in phase I ing construction within the SRV Group. park plaza. The apartments will have a have been named after berries. The company`s Managing Director is direct lift connection to the shopping Puu-Ylästö is being built under a part- Marko Heino. SRV Westerlund’s sectors centre and to the car park and passenger nership contract agreement, meaning of business include both construction terminal areas. SRV Westerlund is responsible for the and renovation. Construction services Demand for low-rise house areas of project management contract, VVO acts include partnership construction, hous- houses in particular is growing constant- as the client, and Finnforest supplies the ing development and competitive con- ly. In 2004, SRV Westerlund started ma- prefabricated wooden panels to the site. tracting. SRV Westerlund’s sphere of op- jor house projects in Vantaa, Porvoo and Construction is done in the form of an erations is the Helsinki Metropolitan other places. In Vantaa, the first phase of open partnership, making it possible to Area and the surrounding municipalities. the Puu-Ylästö low-rise area, a partner- figure in specific features of an individ- The Group’s internal collaboration on ship project with the city of Vantaa, ual project and the residents’ needs and area development projects and interna- VVO and Finnforest, is reaching com- wishes for things like floor plans and tional projects has been extremely pro- pletion. The three-stage construction materials at the design stage and to add ductive. project will comprise a total of 123 to them during the construction period. The company enjoyed a year of homes representing a new, modern I have worked for SRV for seven years. growth in 2004 in terms of both net sales house architecture. In Porvoo, a house I started with Tehorakentajat Oy as a site and net profit. The largest projects were project has been started in Jokineito – foreman, from which I was promoted the start of housing construction in the nine detached houses, one semidetached through various building sites and corpo- Kamppi Centre in the heart of Helsinki house and two rows of terraced housing. rate mergers to site manager and later to and the Puu-Ylästö area development in The location is unique, offering city- Oy SRV Westerlund Kalliomaa, Construction manager Ari my present post. My varied earlier practi- Vantaa. Among the major new openings centre homes by the Porvoo River next cal experience of work is still useful to were the start-up of housing develop- to Engel Park. me in doing my present job. There are ment in the municipalities surrounding SRV Westerlund is carrying out a joint many things about building that you can the Helsinki Metropolitan Area and the project with SRV International and SRV only learn through experience. The pass- joint project Osten Tor in Tallinn. Kinnisvara AS in the form of a housing ing on of information from one profes- SRV Westerlund provides its cus- project in Tallinn. The Osten Tor apart- sional to another is crucial. tomers with a comprehensive package of ment building will have 158 apartments partnership construction services. This on 15 storeys, with impressive views includes land procurement, planning, across Tallinn to the Gulf of Finland. project control, handling official mat- Housing construction continues in the ters, and construction. In partnership centres of population and the number of construction, the know-how and re- housing starts is forecast to be on a par ”We provide a sources of the client, builder and design- with the figure for 2004. Repairs and ers are pooled at an early stage of the maintenance business continues to grow comprehensive construction project. This ensures the dynamically. In accordance with its best possible expertise and common growth strategy, SRV Westerlund Oy package of services goals throughout the project. will aim for significant growth in its net Among the projects in hand, the sales and net profit in 2005. for partnership biggest are high-quality apartment buildings with a total of 99 apartments, construction.” forming part of the Kamppi Centre. The apartments will be located beside a

14 SRV Westerlund 15 I came to work for SRV Russia Ltd in Large-scale projects June 2004. SRV Russia is in charge of the Group’s Russian operations under in the Baltic countries the aegis of SRV International. The company currently has about 30 employees, including the representative and Russia offices and subsidiaries operating in Russia. The Russian economy has developed dynamically in the early 21st century, resulting particularly in the expansion of the Russian middle class, thus sub- SRV International Ltd operates in the An intresting construction project un- stantially boosting purchasing power. Baltic countries and Russia as a property der way in Estonia is the Estonian Golf Positive economic indicators therefore developer and project manager. Each & Country Club 20 kilometers east of create good future prospects also for our country has its own business unit with a Tallinn. business in Russia. local organisation to ensure a high level In Latvia and Lithuania, output con- SRV Russia’s strategy is to be in- of local knowledge combined with ex- centrates on trade and logistics. The volved in developing and upgrading pertise in the market and conditions. customers are mainly international property in Russia. Our main sphere of The experience of the market in the companies expanding into the Baltic business is hotels, offices, shopping Baltic countries and Russia accumulated countries which SRV International centres and logistical centres. In the in the past few years has provided SRV serves according to their specific needs. next three years we also intend to International with a solid basis for SRV’s role includes land acquisition launch housing construction. SRV Rus- growth. The expertise of the entire SRV and when necessary its planning, proj- sia’s operations in Russia are based on Group as a developer of both large and ect planning, and arrangement and im- collaboration with local partners. We smaller combined retail, transport and plementation of finance on a project carry out all projects in compliance with residential centres in Finland and other management basis. SRV project management model, using countries is based on solid experience. The operations of SRV Russia Ltd fo- local contractors. Among the major events in 2004 was cus on property and project develop- Ltd SRV Russia Kullas, Managing Director Veli-Matti The development of projects and the completion of the Viru Centre in ment for Western companies and local project management is performed with Tallinn in April. The Viru Centre con- Russian customers. SRV’s experience Finnish resources. The development of centrates on fashion and leisure activi- of property development in Finland and projects is based primarily on in-house ties. The complex also includes Sokos the Baltic countries and the know-how concept planning and expertise with fi- Hotel Viru, which has been both reno- this has earned it, combined with excel- nancing. The SRV Group’s excellent vated and extended. lent networks of investors, tenants and references and partners, both in Finland During 2004, housing construction financing, provide an excellent opening and in the Baltic countries, have con- and renovation projects also got under for the Russian market. vinced our customers in Russia that our way in Estonia. Business in Russia has focused on St expertise creates a clear added value for In the autumn, the construction began Petersburg, regional centres, and on a their business. of the 15-storey Osten Tor apartment project-specific basis also Moscow. The building in Tallinn. The top storeys of customers have mainly been Western the building will open up a unique view users and property investors. over the whole city. The building will In 2004, the construction of a new have a total of 158 apartments and 2,000 Park Inn hotel in Yekaterinburg began, square metres of commercial facilities. and in St Petersburg a shopping centre ”Our country-specific Osten Tor will be completed in 2006. extension was completed. In the future, SRV will deploy greater In the immediate vicinity of St Pe- business units efforts in housing construction in Esto- tersburg city centre, on the Neva River nia. Advantageous financing terms and banks, the international shopping centre interest on loans have given consumers District 700 is under development and the design of the project was started. On guarantee the best more opportunities to buy homes as the concept planning and market the whole, the prospects for business and owner-occupiers or investors. Interna- research for this were completed. The construction are expected to continue to local knowledge.” tional property investors are also active lease agreement for an office building improve in the future, both in the Baltic in the housing market. to be built in Moscow was signed and countries and in Russia.

16 SRV International 17 I came to work for SRV Russia Ltd in Large-scale projects June 2004. SRV Russia is in charge of the Group’s Russian operations under in the Baltic countries the aegis of SRV International. The company currently has about 30 employees, including the representative and Russia offices and subsidiaries operating in Russia. The Russian economy has developed dynamically in the early 21st century, resulting particularly in the expansion of the Russian middle class, thus sub- SRV International Ltd operates in the An intresting construction project un- stantially boosting purchasing power. Baltic countries and Russia as a property der way in Estonia is the Estonian Golf Positive economic indicators therefore developer and project manager. Each & Country Club 20 kilometers east of create good future prospects also for our country has its own business unit with a Tallinn. business in Russia. local organisation to ensure a high level In Latvia and Lithuania, output con- SRV Russia’s strategy is to be in- of local knowledge combined with ex- centrates on trade and logistics. The volved in developing and upgrading pertise in the market and conditions. customers are mainly international property in Russia. Our main sphere of The experience of the market in the companies expanding into the Baltic business is hotels, offices, shopping Baltic countries and Russia accumulated countries which SRV International centres and logistical centres. In the in the past few years has provided SRV serves according to their specific needs. next three years we also intend to International with a solid basis for SRV’s role includes land acquisition launch housing construction. SRV Rus- growth. The expertise of the entire SRV and when necessary its planning, proj- sia’s operations in Russia are based on Group as a developer of both large and ect planning, and arrangement and im- collaboration with local partners. We smaller combined retail, transport and plementation of finance on a project carry out all projects in compliance with residential centres in Finland and other management basis. SRV project management model, using countries is based on solid experience. The operations of SRV Russia Ltd fo- local contractors. Among the major events in 2004 was cus on property and project develop- Ltd SRV Russia Kullas, Managing Director Veli-Matti The development of projects and the completion of the Viru Centre in ment for Western companies and local project management is performed with Tallinn in April. The Viru Centre con- Russian customers. SRV’s experience Finnish resources. The development of centrates on fashion and leisure activi- of property development in Finland and projects is based primarily on in-house ties. The complex also includes Sokos the Baltic countries and the know-how concept planning and expertise with fi- Hotel Viru, which has been both reno- this has earned it, combined with excel- nancing. The SRV Group’s excellent vated and extended. lent networks of investors, tenants and references and partners, both in Finland During 2004, housing construction financing, provide an excellent opening and in the Baltic countries, have con- and renovation projects also got under for the Russian market. vinced our customers in Russia that our way in Estonia. Business in Russia has focused on St expertise creates a clear added value for In the autumn, the construction began Petersburg, regional centres, and on a their business. of the 15-storey Osten Tor apartment project-specific basis also Moscow. The building in Tallinn. The top storeys of customers have mainly been Western the building will open up a unique view users and property investors. over the whole city. The building will In 2004, the construction of a new have a total of 158 apartments and 2,000 Park Inn hotel in Yekaterinburg began, square metres of commercial facilities. and in St Petersburg a shopping centre ”Our country-specific Osten Tor will be completed in 2006. extension was completed. In the future, SRV will deploy greater In the immediate vicinity of St Pe- business units efforts in housing construction in Esto- tersburg city centre, on the Neva River nia. Advantageous financing terms and banks, the international shopping centre interest on loans have given consumers District 700 is under development and the design of the project was started. On guarantee the best more opportunities to buy homes as the concept planning and market the whole, the prospects for business and owner-occupiers or investors. Interna- research for this were completed. The construction are expected to continue to local knowledge.” tional property investors are also active lease agreement for an office building improve in the future, both in the Baltic in the housing market. to be built in Moscow was signed and countries and in Russia.

16 SRV International 17 Regional business Occupational safety growing profitably guiding activities

Entrepreneur-driven regional business zone in 2003. The main project com- One of the most important values guid- well. The Viisari guide is distributed to and health and quality must be clear. has proved itself a workable model for pleted in 2004 was the Kauriala Upper ing SRV’s operations is worksite safety, all employees of contractors collaborat- When a construction project is divided SRV. The SRV Group´s regional busi- Secondary School. which is factored into all activities. A ing with SRV who have been famil- into parts, it is important for a single or- ness is headed by Juhani Väisänen. Re- good standard of occupational safety iarised with the building sites. ganisation, which has quality and safety gional business yielded growth for the Renovating the old and comes from systematic management and It is SRV’s aim to step up collabora- systems verified as practicable, to be Group in 2004, and future years the in- building the new in Tampere from commitment by all employees and tion on matters of occupational safety clearly responsible for the whole. tention is to expand it further to other ur- The largest project of 2004 for Pirkan- subcontractors to common ground rules. and to promote the formation of a har- ban growth centres in Finland. maan Projektitoimi Oy, which operates SRV Viitoset has won numerous occupa- monised safety culture in the construc- Business will be added in housing in the Tampere region, was the renova- tional safety awards and last year it also tion industry. SRV both guides and sup- construction, commercial and office tion and supplementary construction of received recognition in a national com- ports its subcontractors’ safety actions construction, and in industrial and infra- the Pyynikki brewery, a building listed petition embracing the entire EU. by monitoring and inspecting equipment structure construction. for preservation. Most of the building The SRV Group has worked systemat- and working methods At SRV, we believe in the entrepreneur- was converted into housing and an activ- ically over the years to improve safety as well as by arranging driven business model and in local know- ities centre for the Sopimusvuori Associ- on building sites. One indication of this occupational safety ledge and partner networks. ation. The renovation section was excep- is many safety awards. In 2004, SRV training on an inde- SRV has a majority shareholding in the tional as the old production facilities Viitonen’s Työmaavinkki (‘Site Tips’) pendent basis in coop- regional companies and a local entrepre- were converted into activity premises CD-ROM and the Viisari guidelines eration with an insurer Health and safety neur always owns part of the company. and stairwells to accommodate the new case Kamppi Centre received an award and other parties. The The regional companies benefit from applications. The total scope of the proj- of distinction in a nationwide competi- goal is zero tolerance in the workplace the Group’s centralised supporting servic- ect was 13,000 square metres of gross tion held by the European Agency for for accidents on all es as the biggest projects can be handled floor area. Safety and Health at Work. SRV also building sites. SRV’s in the form of consortiums with the parent During 2004, a privately financed 29- won the occupational safety competition philosophy of occupa- come from company. apartment project for Sato-Rakennuttajat for the Uusimaa region for the fourth tional safety and health The most important contract complet- Oy and a 14-home semidetached house consecutive time. emphasises commit- commitment to ed by the Joensuu-based Rakennusliike development for YH-Asumisoikeus Oy The Työmaavinkki CD-ROM and Vii- ment on the part of the Purmonen Oy was the ABC Marjala were also completed. sari guidelines developed by SRV start- personnel and the man- common ground rules service station. Rakennusliike Erkki During the business year, the con- ed from the practical need to guide peo- agement. No less than Huhdanpää Oy of Tampere completed a struction of several new housing areas ple working on sites in matters related to 95 per cent of SRV Vii- terraced house project for As Oy Ylöjär- was begun in Kangasala and Pirkkala. A safety, the environment and quality. SRV toset’s employees have ven Niittykumpu. privately financed 19-home semi- wanted to make sure that all the employ- received an occupation- A project comprising two apartment detached house development and a 44- ees at Finland’s biggest worksite in the al safety and health buildings with 40 apartments owned by apartment part-ownership apartment Kamppi district of Helsinki get the same card and training continues. the holding company As Oy Kaarinan building were started in the Mannaniitty and adequately comprehensive informa- Good implementation of occupational Aurinko was completed by SRV Teräs- district of Kangasala. When it is com- tion also about safety and about standard safety and health has helped to strength- betoni Ltds Turku regional office. SRV pleted, the area will have roughly 200 procedures supporting operations. When en the entire SRV as a reliable project Teräsbetoni Ltd’s regional unit for dwellings. The construction of 23 homes the additional material was being devel- management contractor, as occupational Lappeenranta completed the modular in semidetached and terraced houses for oped, ease of use was the main criterion. safety and health are closely linked to building factory in Hartola as a project a property holding company began in the The Työmaavinkki site tips are cur- work quality and timetables. As a variety management contract. Takamaa district of Pirkkala. When com- rently in use at the sites for the Kamppi of project management models become Rakennus Pirttimaa Oy went into pleted, the housing area will have about Centre and IdeaPark, and in the future widespread, the client’s and main con- business in the Hämeenlinna economic 100 dwellings. its use will be extended to other sites as tractor’s liability for occupational safety

18 Regional business YmpäristöSafety 1921 Regional business Occupational safety growing profitably guiding activities

18 Regional business YmpäristöSafety 1921 Taking care of the environment is part of profitable business

The SRV Group is aware of the compa- officers appointed for the subsidiary. It is readied for pilot use in June 2004 and ny’s social responsibility and the goal is the committee’s duty to oversee the came on stream in production in the be- to be a front-rank company also in envi- Group’s environmental activities, to ginning of 2005. ronmental management. Systematic ef- monitor ongoing environmental proj- A vacuum waste disposal system to fort is devoted to the wellbeing of the ects and to generate ideas for new improve the handling and recycling of environment and related operational de- improvement measures linked to the wastes was designed for the buildings in velopment work. environment. the Kamppi Centre. The system enables On building sites, environmental work the monitoring of waste production on a Environmental goals is done by environmental officers ap- user-specific basis. The Kamppi Centre SRV’s objective is to reduce the envi- pointed for the site on a project-specific worksite also yielded good results from ronmental impacts of the buildings’ total basis. It is their duty to oversee and con- the open and active development of life cycle. From SRV’s perspective, en- trol the site’s waste disposal, energy communications. The operating model vironmental impacts can be divided into economy, and the operations of subcon- implemented at Kamppi will be applied the effects of actual construction opera- tractors. in the future to the Group’s other work- tions and effects after the building is oc- sites. cupied. Good results from A key goal for SRV is to minimise en- environmental activities Constant improvement vironmental disturbance from the com- Development projects related to the en- The improvement of the worksites’ pany’s actions during the construction vironment are carried out at SRV in co- waste disposal together with partner stage. Worksite energy consumption and operation with customers and other companies is the most important single wastes formed on the sites cause the stakeholders. Development work done environmental project continuing in Group’s major environmental impacts. through partnerships yields better 2005. It main goals are to streamline the Another significant environmental prospects for the application of broader- sorting and reuse of wastes, to increase goal is to contribute during the construc- based expertise also in environmental environmental awareness and to reduce tion stage to reducing the environmental matters. the environmental impacts of transport- degradation resulting from the use of The improvement of worksites’ waste ing waste. buildings, from the properties of con- disposal in cooperation with Kuusakoski Environmental training and in-house struction materials and in the demolition Oy in 2004 met expectations; the sorting communications will be upgraded dy- stage. These actions are accordingly tar- of worksite wastes was made more effi- namically in 2005. Training for person- geted primarily on the management of cient on the test sites through training, nel and suppliers, together with increas- buildings’ energy consumption and the guidelines and detailed planning. The ing environmental knowledge, is a key environment impacts of building com- application of the project’s excellent re- component of SRV’s environmental ponents. sults will be extended to all of the work. Group’s worksites. The development of environmental Work for the To supervise the implementation of reporting continues. The aim of the proj- environment in all units the Group’s environmental targets and to ect is to expand the annual disclosure of The mission of the SRV Group’s envi- monitor the results of development ac- environmental matters. ronmental manager is to supervise the tions, an internet-based environmental SRV actively monitors and adopts the Group’s actions and development work reporting system for the sites was intro- results of environmental development related to environmental matters. duced. The system covers the sites’ ener- done elsewhere. For example, the The Group’s environmental commit- gy economy and waste disposal and it PromisE environmental classification tee convenes four times a year. In addi- can also be used to generate real-time system for buildings will be tested in tion to the environmental manager, the data on the situation at the sites for cus- 2005 in cooperation with customers. committee includes the environmental tomers and authorities. The system was

20 Environment TyöturvallisuusEnvironment 21 Taking care of the environment is part of profitable business

20 Environment TyöturvallisuusEnvironment 21 Standardised working methods throughout the Group

The personnel in figures SRV made a further major deployment porting is being improved systematically the personnel and the company supports The SRV had an average of 603 employees in 2004. Women accounted for SRV Group ■ in standardised working methods in and the personnel report will be expand- the personnel’s exercise hobbies on a 15 per cent of the total. The average age in 2004 was 43 years. SRV Viitoset ■ 2004 for matters concerning human re- ed in the future to cover all the Group broad front. ■ sources. The cornerstone of this work is companies. The personnel report has In June, the annual personnel outing SRV Westerlund SRV’s values, which have been har- shown itself to be a useful tool in mat- was held in Tallinn, where a visit was SRV Teräsbetoni ■ monised Group-wide. The foundation of ters related to personnel development paid to the Viru Centre built by SRV In- SRV International ■ SRV’s success is its skilled and moti- and on-the-job wellbeing, for example. ternational. Type of employment Men/women Regional companies ■ vated personnel, and employees’ leisure In collaboration with stu- permanent employees Foreign subsidiaries ■ pursuits and recreation are supported in dents, efforts were de- a variety of ways. ployed, for example, in at- SRV’s values Salaried Women 15% 12% 6% 28% In 2004, the SRV Group standardised tending events aimed at 28% its procedures for progress interviews. students of construction Supervisors were trained in the new and by arranging site visits reliability progress interview system, in assessing and sauna evenings for stu- skills and in giving feedback. All dents. Class mentoring was open cooperation 10% salaried staff were given personal targets also started. and their performance is assessed at service-mindedness 4% least once a year by a progress interview. A boost for on- efficiency and productivity 11% Fixed-term Also, a progress plan is made for each the-job wellbeing salaried staff member in connection with and fitness development and Clerical employees 61% Men 85% 23% 17% the interview. The Group’s keep-fit activ- personal improvement The incentive bonus system was ex- ities were consolidated in tended to include office staff. The per- the hands of a single com- Toimihenkilöitä 34% sonal input of office staff into improving mittee. The committee con- their own and the company’s functions venes at least twice a year Age distribution of the entire personnel 31.12.2004 is rewarded. Building sites have project- to consider the entire Group personnel’s In addition to the holiday home in specific incentive bonus systems in common concerns related to on-the-job Saariselkä, a holiday home for the per- 40 place. wellbeing. A particularly strong focus sonnel was purchased in Siuntio, close A Group networking committee was during the business year was on main- to the Pickala golf course. 35 formed and its first meeting was held in taining the ageing workforce’s job moti- The personnel are informed of com- the autumn. The committee convenes vation and fitness. Efforts were also mon Group concerns by means of a 30 twice a year and its mission is to create a made to improve on-the-job wellbeing weekly bulletin and other media. The 25 basis for developing the Group’s opera- with a talk held for the employees enti- personnel also gets information and an tions, for enhancing working relations, tled “Where Does a Good Atmosphere opportunity to discuss matters with the 20 and for better corporate morale. The per- in the Workplace Come from?”. Fitness management four times a year at SRV sonnel are given a greater say, particu- course activities were also continued. Morning Coffee events as well as at 15 larly in decisions affecting them, by im- Twelve people took part in the week- briefings and training session held for the 10 proving the information flow and by dis- long fitness course. Previous course companies by the Managing Directors. seminating the personnel’s opinions and attendees took part in follow-up week- 5 positions more widely to serve the plan- ends. Clerical employees ■ 0 ning and decision-making process. The Group’s common personnel club ■ The SRV Group’s first personnel re- SRV Viihdytys actively arranged a vari- Salaried % ‹25 25-29 30-39 40-49 50-59 60v. port was completed for internal use. Re- ety of exercise and cultural events for Total ■

22 Personnel report 23 Standardised working methods throughout the Group

22 Personnel report 23 The Board of Directors Group companies

SRV Group Plc SRV Group

Group Group Parent company´s Parent company´s 31.12.2004 31.12.2003 31.12.2004 31.12.2003 Group companies Domicile holding % holding % holding % holding %

HTC Espoo Oy Espoo 100.0 100.0 - - HTC Jyväskylä Oy Jyväskylä 100.0 100.0 - - HTC Vantaa Oy Vantaa 100.0 100.0 - - Kampin Keskus Oy Helsinki 100.0 100.0 - - Kiinteistö Oy Ahvenniska Espoo 82.0 82.0 82.0 82.0 Kiinteistö Oy Nummelanrinne Vihti 100.0 100.0 - - Kiinteistö Oy Turun Europortti Turku 100.0 100.0 100.0 100.0 Kiinteistöviitonen Oy Helsinki 100.0 100.0 100.0 100.0 OOO SRV-Stroi Moscow 75.0 100.0 - - Pirkanmaan Projektitoimi Oy Tampere 65.0 65.0 65.0 65.0 Porvoon Puurakennus Oy Porvoo 100.0 100.0 - SRV’s governing bodies are the Rkl Erkki Huhdanpää Oy Tampere 70.0 70.0 - - annual general meeting, the Board Rakennus Pirttimaa Oy Hämeenlinna 90.0 75.0 - - of Directors and the President. Rakennusliike Purmonen Oy Joensuu 65.0 65.0 65.0 65.0 The annual general meeting was Rempro Oy Espoo disbanded 70.0 - - held on 27 April 2004. The Board of Directors convened on 17 Rubertus UAB Vilnius 51.0 51.0 - - occasions in 2004. SRV Develita UAB Vilnius 100.0 100.0 - - SRV Ehituse AS Tallinn 100.0 100.0 - - SRV International Oy Espoo 100.0 100.0 100.0 100.0 SRV Kinnisvara AS Tallinn 65.0 - - - SRV Russia Oy Espoo 100.0 100.0 - - SRV Statyba UAB Vilnius 51.0 51.0 - - SRV Terbe Lat SIA Riga 100.0 100.0 - - The members of the Board are SRV Teräsbetoni Oy Espoo 100.0 100.0 100.0 100.0 (from left) Eero Nuutinen, SRV Westerlund Oy Helsinki 100.0 95.0 95.0 95.0 Jorma Haapamäki, Kari Filppula SRV Viitoset Oy Espoo 100.0 100.0 100.0 100.0 and Ilpo Kokkila (chairman). TBE-Construction Oy Espoo 100.0 100.0 - - The adviser to the Board is Markku Sarkamies and the secretary to the Board is Marja Associated companies Sarnela, Director, Legal Affairs. Klavciems SIA Riga 18.1 18.1 - - Litbara Minsk 50.5 36.0 - - OOO SRV Okhta St Petersburg 50.0 - - - ZAO ASK-Hotel Yekaterinburg 50.0 50.0 - -

24 The Board of Directors Group companies 25 The Board of Directors Group companies

SRV Group Plc SRV Group

Group Group Parent company´s Parent company´s 31.12.2004 31.12.2003 31.12.2004 31.12.2003 Group companies Domicile holding % holding % holding % holding %

24 The Board of Directors Group companies 25 ment continued of the D700 shopping Administration Annual report of the board, centre in St Petersburg and the Rezidor Hannu Mikkonen served as President of SAS Park Inn hotel projects in Russia. SRV Group Plc since 17 January 2004. 1 January – 31 December 2004 Towards the end of the year, an agree- The Executive Vice President is Timo ment was signed for the construction of a Nieminen. The chairman of the Board of Park Inn Hotel in Yekaterinburg. Directors is Ilpo Kokkila. The members of the Board of Directors were Kari Orders in hand Filppula, Jorma Haapamäki and Eero The Group’s orders in hand – i.e., the Nuutinen. uninvoiced portion of construction con- The auditors are Authorised Public SRV Group Plc is the Group’s parent fice buildings for TietoEnator, in Vantaa SRV Westerlund Ltd’s net sales were tract agreements – were MEUR 320.8 Accountant Jarmo Lohi with the APA company and it is responsible for mat- the garden retailer Plantage and in MEUR 61.4 (MEUR 41.5). The compa- (MEUR 301.7) at year-end. Foreign firm of Ernst & Young Oy as deputy, ters related to the Group’s management, Jyväskylä a Citymarket retail outlet. Of ny’s profit before extraordinary items business accounted for MEUR 20.0 with Mikko Rytilahti, APA, as the audi- strategic planning, project development, the projects under construction, the main was good. The company has responsibil- (MEUR 13.4) of this. tor in charge. financing and financial administration items in Helsinki are the Kamppi Cen- ity for the Group’s housing construction. services. The company is domiciled in tre, the renovation of commercial and The biggest projects handed over during Personnel Post balance sheet events Espoo. office space in the Graniittitalo building, the financial year were HOAS 149 in The Group had an average of 603 (524) SRV Viitoset Ltd has signed agreements In accordance with the strategy, busi- Hotel Ruoholahti, repairs to the school Viikki, As Oy Vantaan Kisatie and employees, of which 396 (347) were for a postal terminal in Jyväskylä for ness operations have been organised un- building at Ratakatu 6, the conversion Lintupuisto, and Jahtipuisto in Espoo. salaried staff. The parent company had Finland Post Corporation and for car der four business areas, the main compa- into offices of a residential building at The most notable projects under con- an average of 34 (33) salaried staff. At showrooms in Kerava for Autosalpa Oy. nies of which are SRV Viitoset Ltd, SRV Tukholmankatu 8, in Vantaa an exten- struction are apartments in the Kamppi year-end, the Group had 591 (522) em- Teräsbetoni Ltd, SRV Westerlund Ltd sion to Finland Post’s service ware- Centre, and the Ulrikanpuisto and Puu- ployees, of which the parent company Environmental issues and SRV International Ltd. house, a transport station for Teboil and Ylästö areas in Vantaa. had 34 (32). The development of the environmental a head office for Lidl, and in Lempäälä The Group also includes construction reporting system started within the Net sales and profit the Ideapark shopping centre. companies operating outside the Helsin- Financing and Group was continued in 2004. The sys- for the financial year SRV Viitoset Ltd’s main project is the ki Metropolitan Area. The most signifi- financial status tem plays a key part in the Group’s on- The SRV Group’s net sales were MEUR Kamppi Centre in the heart of Helsinki. cant of these is Pirkanmaan Projektitoi- The Group’s interest-bearing liabilities going environmental and social respon- 403.2 (MEUR 275.5 in 2003). Construc- The construction work on the project has mi Oy, which operates in the Tampere were MEUR 27.2 at year-end. The short- sibility project. tion in Finland contributed MEUR 368.9 proceeded according to plan and on region and had net sales of MEUR 18.6 term liabilities for the financial year in- (MEUR 229.3) and foreign business schedule. The first sections to be handed (MEUR 11.1). clude MEUR 11.6 of debt for the acqui- Proposal for the generated MEUR 34.3 (MEUR 46.2). over will be the terminals serving the The SRV International Ltd Group is re- sition of plots in Kamppi, which will be distribution of profit Profit before taxes was MEUR 16.2 city of Espoo and long-distance trans- sponsible for foreign business. Its net settled with the contract instalments for The Board of Directors propose that a (MEUR 9.8). port, in April 2005. The terminals will sales were MEUR 34.3 (MEUR 46.2) the construction of the terminal. Net fi- dividend be paid of 84 cents per share, enter into service in the beginning of and its net profit was satisfactory. During nancing expenses were MEUR 1.0. The or a total of EUR 1,094,688.00, and that Company operations June. The entire project will be complet- the financial year, the Viru Centre and equity ratio was 22.6 per cent (17.3) or the remainder of the profit for the finan- SRV Group Plc’s net sales came from ed in spring 2006. Viru Square projects were completed, as 31.2 per cent (26.5) with the capital loan cial year, being EUR 4,166,568.98, be administrative and financing services SRV Teräsbetoni Ltd’s net sales were were the renovation and extension of the included. The Group’s liquid assets were posted to shareholders’ equity. and rental income from the Group com- MEUR 58.4 (MEUR 46.8). The net profit Viru Hotel. In the Old Town of Tallinn, MEUR 25.0 (MEUR 22.6) at year-end. panies. The parent company’s net sales for the financial year fell short of the tar- the renovation and extension of an histor- The company plans to pay off a Outlook for 2005 were MEUR 8.0 (MEUR 5.3) and profit get. The company concentrates on indus- ical building for residential use contin- MEUR 15 quasi-equity loan maturing in Construction in Finland will grow in pace before taxes MEUR 5.4 (MEUR 0.7). trial construction and logistical construc- ued. The construction of a 15-storey 2007 ahead of schedule and to refinance with economic growth and is forecast to SRV Viitoset Ltd’s net sales were tion. The main projects completed during apartment building was also started in it with long-term liabilities. be in the order of two per cent. Building MEUR 224.1 (MEUR 133.5), which is the financial year were stage 1 of a new Tallinn. In Latvia, two grocery outlets for construction is forecast to grow even 61 per cent of the Group’s net sales from building of Helsinki Business Polytech- Kesko, a logistical centre for Onninen on Investments faster than this, particularly in the hous- construction in Finland. The company’s nic (Helia), an office building for the Fed- Riga, and a residential building project The Group’s investments amounted to ing and commercial construction sectors. profit before extraordinary items was eration of Espoo Parishes, and a modular were completed. An extension to a corru- MEUR 3.0 (MEUR 1.5). During the fi- Business premises construction is begin- good. SRV Viitoset Ltd’s field of busi- house plant for Finnforest Corporation in gated board mill was completed for Stora nancial year, the company acquired a 5 ning to recover and renovation is still ness is commercial and office construc- Hartola. The biggest projects still under Enso and an office building was complet- per cent minority holding in SRV West- growing. Growth in civil engineering will tion. The main construction projects construction are stage 2 of Helia, the ed for Seesam in Riga. In Lithuania, a re- erlund Ltd as well as 65 per cent of the slow. Growth in construction will contin- completed in Helsinki during the finan- KOy Rock Vallila underground car park, tail outlet was built for Kesko Agro in issued stock in the Estonian construction ue in the Baltic countries and Russia. cial year were stage 2 of the Department a retail outlet for Datateema, an extension Kaunas, and concrete frame work was and property development company The Group’s net sales will grow of Veterinary Medicine and Food Sci- to Orient Occident’s office building, and completed in Vilnius. In Russia, two SRV Kinnisvara AS. The Estonian com- slightly compared with the previous year ence Institute, an office building and an a training station for the Coastguard in projects were built for the LDS church. pany owns a number of apartment and and the profit before extraordinary items indoor car park for the Novo Group, of- Porkkala. During the financial year, the develop- building holding companies. is forecast to improve.

26 Review by the Board of Directors 27 ment continued of the D700 shopping Administration Annual report of the board, centre in St Petersburg and the Rezidor Hannu Mikkonen served as President of SAS Park Inn hotel projects in Russia. SRV Group Plc since 17 January 2004. 1 January – 31 December 2004 Towards the end of the year, an agree- The Executive Vice President is Timo ment was signed for the construction of a Nieminen. The chairman of the Board of Park Inn Hotel in Yekaterinburg. Directors is Ilpo Kokkila. The members of the Board of Directors were Kari Orders in hand Filppula, Jorma Haapamäki and Eero The Group’s orders in hand – i.e., the Nuutinen. uninvoiced portion of construction con- The auditors are Authorised Public SRV Group Plc is the Group’s parent fice buildings for TietoEnator, in Vantaa SRV Westerlund Ltd’s net sales were tract agreements – were MEUR 320.8 Accountant Jarmo Lohi with the APA company and it is responsible for mat- the garden retailer Plantage and in MEUR 61.4 (MEUR 41.5). The compa- (MEUR 301.7) at year-end. Foreign firm of Ernst & Young Oy as deputy, ters related to the Group’s management, Jyväskylä a Citymarket retail outlet. Of ny’s profit before extraordinary items business accounted for MEUR 20.0 with Mikko Rytilahti, APA, as the audi- strategic planning, project development, the projects under construction, the main was good. The company has responsibil- (MEUR 13.4) of this. tor in charge. financing and financial administration items in Helsinki are the Kamppi Cen- ity for the Group’s housing construction. services. The company is domiciled in tre, the renovation of commercial and The biggest projects handed over during Personnel Post balance sheet events Espoo. office space in the Graniittitalo building, the financial year were HOAS 149 in The Group had an average of 603 (524) SRV Viitoset Ltd has signed agreements In accordance with the strategy, busi- Hotel Ruoholahti, repairs to the school Viikki, As Oy Vantaan Kisatie and employees, of which 396 (347) were for a postal terminal in Jyväskylä for ness operations have been organised un- building at Ratakatu 6, the conversion Lintupuisto, and Jahtipuisto in Espoo. salaried staff. The parent company had Finland Post Corporation and for car der four business areas, the main compa- into offices of a residential building at The most notable projects under con- an average of 34 (33) salaried staff. At showrooms in Kerava for Autosalpa Oy. nies of which are SRV Viitoset Ltd, SRV Tukholmankatu 8, in Vantaa an exten- struction are apartments in the Kamppi year-end, the Group had 591 (522) em- Teräsbetoni Ltd, SRV Westerlund Ltd sion to Finland Post’s service ware- Centre, and the Ulrikanpuisto and Puu- ployees, of which the parent company Environmental issues and SRV International Ltd. house, a transport station for Teboil and Ylästö areas in Vantaa. had 34 (32). The development of the environmental a head office for Lidl, and in Lempäälä The Group also includes construction reporting system started within the Net sales and profit the Ideapark shopping centre. companies operating outside the Helsin- Financing and Group was continued in 2004. The sys- for the financial year SRV Viitoset Ltd’s main project is the ki Metropolitan Area. The most signifi- financial status tem plays a key part in the Group’s on- The SRV Group’s net sales were MEUR Kamppi Centre in the heart of Helsinki. cant of these is Pirkanmaan Projektitoi- The Group’s interest-bearing liabilities going environmental and social respon- 403.2 (MEUR 275.5 in 2003). Construc- The construction work on the project has mi Oy, which operates in the Tampere were MEUR 27.2 at year-end. The short- sibility project. tion in Finland contributed MEUR 368.9 proceeded according to plan and on region and had net sales of MEUR 18.6 term liabilities for the financial year in- (MEUR 229.3) and foreign business schedule. The first sections to be handed (MEUR 11.1). clude MEUR 11.6 of debt for the acqui- Proposal for the generated MEUR 34.3 (MEUR 46.2). over will be the terminals serving the The SRV International Ltd Group is re- sition of plots in Kamppi, which will be distribution of profit Profit before taxes was MEUR 16.2 city of Espoo and long-distance trans- sponsible for foreign business. Its net settled with the contract instalments for The Board of Directors propose that a (MEUR 9.8). port, in April 2005. The terminals will sales were MEUR 34.3 (MEUR 46.2) the construction of the terminal. Net fi- dividend be paid of 84 cents per share, enter into service in the beginning of and its net profit was satisfactory. During nancing expenses were MEUR 1.0. The or a total of EUR 1,094,688.00, and that Company operations June. The entire project will be complet- the financial year, the Viru Centre and equity ratio was 22.6 per cent (17.3) or the remainder of the profit for the finan- SRV Group Plc’s net sales came from ed in spring 2006. Viru Square projects were completed, as 31.2 per cent (26.5) with the capital loan cial year, being EUR 4,166,568.98, be administrative and financing services SRV Teräsbetoni Ltd’s net sales were were the renovation and extension of the included. The Group’s liquid assets were posted to shareholders’ equity. and rental income from the Group com- MEUR 58.4 (MEUR 46.8). The net profit Viru Hotel. In the Old Town of Tallinn, MEUR 25.0 (MEUR 22.6) at year-end. panies. The parent company’s net sales for the financial year fell short of the tar- the renovation and extension of an histor- The company plans to pay off a Outlook for 2005 were MEUR 8.0 (MEUR 5.3) and profit get. The company concentrates on indus- ical building for residential use contin- MEUR 15 quasi-equity loan maturing in Construction in Finland will grow in pace before taxes MEUR 5.4 (MEUR 0.7). trial construction and logistical construc- ued. The construction of a 15-storey 2007 ahead of schedule and to refinance with economic growth and is forecast to SRV Viitoset Ltd’s net sales were tion. The main projects completed during apartment building was also started in it with long-term liabilities. be in the order of two per cent. Building MEUR 224.1 (MEUR 133.5), which is the financial year were stage 1 of a new Tallinn. In Latvia, two grocery outlets for construction is forecast to grow even 61 per cent of the Group’s net sales from building of Helsinki Business Polytech- Kesko, a logistical centre for Onninen on Investments faster than this, particularly in the hous- construction in Finland. The company’s nic (Helia), an office building for the Fed- Riga, and a residential building project The Group’s investments amounted to ing and commercial construction sectors. profit before extraordinary items was eration of Espoo Parishes, and a modular were completed. An extension to a corru- MEUR 3.0 (MEUR 1.5). During the fi- Business premises construction is begin- good. SRV Viitoset Ltd’s field of busi- house plant for Finnforest Corporation in gated board mill was completed for Stora nancial year, the company acquired a 5 ning to recover and renovation is still ness is commercial and office construc- Hartola. The biggest projects still under Enso and an office building was complet- per cent minority holding in SRV West- growing. Growth in civil engineering will tion. The main construction projects construction are stage 2 of Helia, the ed for Seesam in Riga. In Lithuania, a re- erlund Ltd as well as 65 per cent of the slow. Growth in construction will contin- completed in Helsinki during the finan- KOy Rock Vallila underground car park, tail outlet was built for Kesko Agro in issued stock in the Estonian construction ue in the Baltic countries and Russia. cial year were stage 2 of the Department a retail outlet for Datateema, an extension Kaunas, and concrete frame work was and property development company The Group’s net sales will grow of Veterinary Medicine and Food Sci- to Orient Occident’s office building, and completed in Vilnius. In Russia, two SRV Kinnisvara AS. The Estonian com- slightly compared with the previous year ence Institute, an office building and an a training station for the Coastguard in projects were built for the LDS church. pany owns a number of apartment and and the profit before extraordinary items indoor car park for the Novo Group, of- Porkkala. During the financial year, the develop- building holding companies. is forecast to improve.

26 Review by the Board of Directors 27 Key figures

SRV Group

2004 2003

Return on investment, % 25.4 24.6 Return on equity, % 35.3 29.2

Equity ratio, % 22.6 17.3 -including capital loan, % 31.2 26.5

Gearing, % 3.9 7.6

Uninvoiced orders held, 31 Dec. 2004, MEUR 320.8 301.7

Personnel (average) 603 524

Formulas for key figures

Profit before extraordinary items and taxes + interest and other financial expenses Return on investment, % Balance sheet total – non-interest-bearing debts (average)

Profit before extraordinary items – income taxes Return on equity, % Shareholders’ equity + minority interest (average)

Shareholders’ equity (incl. capital loan) + minority interest Equity ratio, % Balance sheet total – advances received

Gearing, % Interest-bearing debts – cash in bank and at hand Shareholders’ equity + minority interest

28 Key figures 29 Key figures

SRV Group

2004 2003

Return on investment, % 25.4 24.6 Return on equity, % 35.3 29.2

Equity ratio, % 22.6 17.3 -including capital loan, % 31.2 26.5

Gearing, % 3.9 7.6

Uninvoiced orders held, 31 Dec. 2004, MEUR 320.8 301.7

Personnel (average) 603 524

Formulas for key figures

Profit before extraordinary items and taxes + interest and other financial expenses Return on investment, % Balance sheet total – non-interest-bearing debts (average)

Profit before extraordinary items – income taxes Return on equity, % Shareholders’ equity + minority interest (average)

Shareholders’ equity (incl. capital loan) + minority interest Equity ratio, % Balance sheet total – advances received

Gearing, % Interest-bearing debts – cash in bank and at hand Shareholders’ equity + minority interest

28 Key figures 29 Consolidated profit and loss account

(EUR 1,000) 1.1.–31.12. 1.1.– 31.12. 2004 2003

Net sales 403,246 275,521

Change in inventories of completed products and work in progress -15,520 -7,943

Production for own use 8 3

Other operating income 60 44

Materials and services 312,424 210,098

Personnel costs 28,741 24,490

Depreciation and write-downs 2,157 2,155

Other operating expenses 27,276 18,138

370,598 254,881

Operating profit 17,196 12,744

Financial income and expenses -969 -2,901

Profit before taxes 16,227 9,843

Income taxes -4,287 -2,437

Minority interest -336 - 286

Net profit for the year 11,604 7,120

HOAS, Viikki, Helsinki

30 Consolidated profit and loss account 31 Consolidated profit and loss account

(EUR 1,000) 1.1.–31.12. 1.1.– 31.12. 2004 2003

Net sales 403,246 275,521

Change in inventories of completed products and work in progress -15,520 -7,943

Production for own use 8 3

Other operating income 60 44

Materials and services 312,424 210,098

Personnel costs 28,741 24,490

Depreciation and write-downs 2,157 2,155

Other operating expenses 27,276 18,138

370,598 254,881

Operating profit 17,196 12,744

Financial income and expenses -969 -2,901

Profit before taxes 16,227 9,843

Income taxes -4,287 -2,437

Minority interest -336 - 286

Net profit for the year 11,604 7,120

HOAS, Viikki, Helsinki

30 Consolidated profit and loss account 31 Consolidated balance sheet

(EUR 1,000) 31.12.2004 31.12.2003 (EUR 1,000) 31.12.2004 31.12.2003

ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY

Fixed assets Shareholders’ equity Intangible assets Share capital 1,303 1,303 Consolidation goodwill 645 905 Share premium account 1,759 1,759 Other long-term expenditure 547 616 Retained earnings 22,741 16,351 1,192 1,521 Net profit for the year 11,604 7,120 Capital loan 15,048 15,000 Tangible assets Land and water areas 307 307 Shareholders’ equity, total 52,455 41,533 Buildings and structures 2,820 3,037 Machinery and equipment 4,102 2,697 Minority interest 2,204 1,462 Other tangible assets 175 168 7 404 6,209 Provisions Investments Other provisions 3,028 1,966 Other stocks and shares 589 660 Other receivables - 154 589 814

Fixed assets, total 9,185 8,544 Liabilities Long-term liabilities Current assets Loans from financial institutions 26, 297 15,737 Inventories Pension loans - 116 Materials and supplies 31 33 Other liabilities 87 67 Work in progress 11,054 20,838 26,384 Land areas 3,854 63,333 15, 920 Other inventories 27,882 7,972 Advance payments 3,413 1,788 46,234 93,964 Current liabilities Loans from financial institutions 742 9,537 Receivables Pension loans 116 420 Long-term Advances received 30,799 34,234 Loan receivables 49 775 2 122 Accounts payable 26,519 29,405 Other receivables 191 - Other liabilities 34 327 51,111 Current Accrued expenses and prepaid income 29,292 10,742 Accounts receivable 29,780 19,621 121,795 Loan receivables 6,398 3,818 135,449 Other receivables 4,814 23,548 Prepaid expenses and accrued income 34,449 22,093 125,407 71,202

Cash in bank and at hand 25,039 22,621

Current assets, total 196,681 187,787 Liabilities, total 148,179 151,369

Assets, total 205,867 196,331 Liabilities and shareholders’ equity, total 205,867 196,331

32 Consolitated balance sheet 33 Consolidated balance sheet

(EUR 1,000) 31.12.2004 31.12.2003 (EUR 1,000) 31.12.2004 31.12.2003

ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY

Cash in bank and at hand 25,039 22,621

Current assets, total 196,681 187,787 Liabilities, total 148,179 151,369

Assets, total 205,867 196,331 Liabilities and shareholders’ equity, total 205,867 196,331

32 Consolitated balance sheet 33 TietoEnator, Pitäjänmäki, Helsinki TietoEnator, Pitäjänmäki, Helsinki