Economic results for - AŽD Praha, sro

azd.cz

Economic results for - AŽD Praha, sro

REPORT ON BUSINESS ACTIVITIESAND RESULTS OF THE COMPANYAŽD PRAHA s.r.o.FOR THE FISCAL YEAR 2010/20111. 10. 2010–30. 9. 2011


CONTENTSGENERAL MANAGER’S FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5MANAGING BODIES AND ORGANISATIONAL UNITS . . . . . . . . . . . . . . . . . . . . . . . 9WHO WE ARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17SCOPE OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19ANTICIPATED ACTIVITY DEVELOPMET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22INTEGRATED MAGEMENT SYSTEM AND ENVIRONMENTAL PROTECTION . . . . . 25RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31INSTALLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35DST BRNO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41DIVISION OF TELECOMMUNICTION AND SIGNALLING TECHNOLOGY SERVICE . . . 43LOGISTIC PLANT OLOMOUC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45AŽD PRAHA, EU AND INTERNATIONAL COOPERATION . . . . . . . . . . . . . . . . . . . . . 47FINANCIAL PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51AUDITOR’S REPORT AND SUPERVISORY BOARD’S ANNUAL REPORT . . . . . . . . 66


GENERAL MANAGER’S FOREWORD5


Dear Business Partners,Associates and Co-Workers,Dear Friends,in the introduction to our company’s annualreport for the past period, I would liketo thank all our employees for their excellentwork, our associates for their support,our business partners for their trust andour friends and supporters for promotingthe good name of AŽD Praha.The 2010/2011 financial year was definitelynot an easy one. In the beginningof his period there were certain doubts anduncertainties – how can we fulfil our plans,how many contracts will we secure and whatis the future outlook. Looking back at thisperiod, I am pleased to state that we fulfilledour main tasks in the economic, technicaland business areas. We fulfilled them despitethe commencing recession and the consequentreduction in transportation infrastructureinvestments, and despite a situationwhen success abroad has never been moredifficult. We are even more proud of our resultsbecause of the above conditions. Wehave maintained and strengthened the goodname of our company on the domestic mar-6


ket as well as abroad. Professionalism, flexibilityand our efforts to meet all our customers’requirements have been and will continue tobe the main principles of our policy.We continued with the implementation ofdomestic projects involving the backbonenetworks of the 3rd and 4th national transitcorridors, secondary railway lines and junctions,such as the Beroun – Zbiroh, MariánskéLázně – Cheb and Benešov – Votice sections,commencement of work at the StaráPaka junction and other projects. We continuedthe implementation of telecommunicationsystems, road telematics systems andother technologies. We strived to be flexiblewhen responding to emergencies, the recommendationsof our customers and traindrivers by initiating and implementing ourown improvement proposals. However, it isclear that the times of full capacity utilization,which we remember from five yearsago, are not coming back. Hence we havecontinued to reduce company costs notonly by reducing our operating costs but,unfortunately, also by reducing numberof our employees and by implementingthe very much needed reorganization. Thatresulted, among other things, in reductionin our production capacities in Prague. Nevertheless,we should also remember that wehelped many people to find new jobs withinthe company.Abroad, we extended the positive resultsof the previous years. One should notoverlook our important contracts in Belarus,Lithuania, Serbia and Montenegro andthe deliveries of our products to Malaysia,Turkey, Greece and the United States. Unfortunately,due to in particular politicalchanges, we have not been successful inEgypt and Syria and our results in Bulgariaalso lagged behind our expectations. Wecarried out very important contracts inSlovakia – for example, the construction ofthe Žilina – Teplička large railway marshallingyard. Company revenues from foreigncontracts amount to approximately 20% ofour overall revenues, a fact that is very importantfor the future. Other important factorsinclude the development of telecommunicationand information technologies,a new public address system networks, localand railway radio network systems andour participation in building the GSM-R andCAB radio system. All of this was accomplishedlast year.Among our other activities, I would like toemphasize here our deliveries for the PragueMetro and our activities in the area of roadtelematics for cities and municipalities inboth the Czech Republic as well as abroad.Our revenues in these areas have been alsogrowing and have partially compensatedthe losses in the railway sector.Technological development played a veryimportant role in the past period. The significantfinancial resources that we have investedthis year (as we do every year) into technologicaldevelopment are at least comparableto our European and international competitors.Some of these projects, which we havealready put or will soon put into trial operation,include the ESA 44 electronic interlocking,the new PZZ-J level crossing system,the RBA-10 radio-block for secondary lines,the LS 06/07 automatic train protection, newGTN systems, new EZS and VNPN functionalitiesreacting to accidents (registering lossof shunt and warning against trains illegallypassing through signals), diagnostic systems,devices for Metro and many other systemsand their applications. We consider as a veryimportant step the completion of the ETCSpilot project, where we applied our own solutionsand subsystems.Another very positive step was the consolidationof our subsidiaries, a process that hasprovided positive results not only in terms ofeconomy but also in education, production,development and other areas. It is necessary7


to emphasize the importance of our service,logistics centre, foreign trade as well as assemblyand production activities.The importance and role of our companyis underlined by its integration into Europeanprojects, the participation of our specialistsin technical and legislative committees,the participation of our company in ACRI,UNIFE, UNISIG, the Interoperability TechnologicalPlatform and other associations andinstitutions. Our participation in the GalileoProject, the European Space Agency,the Chambers of Commerce of the CzechRepublic and Capital City of Prague – all ofthis highlights the possibilities for us to expertlyinfluence future decisions, strategiesand concepts in terms of transportation policiesnot only in the Czech Republic.Dear Friends,The last year was a very difficult one forour company, yet it was also a dynamic andinteresting year. I would like to direct yourattention to some other parts of this annualreport, where you will be able to seethe results of the previous financial year notonly in the form of figures, but also structuredinto individual chapters that describethe individual activities of our company indetail. Once again, let me thank all of youwho have contributed through their work tothe excellent results and good name of ourcompany.I would also like to thank our businesspartners and customers who have enabledus to exercise our capabilities and to utilizeour extensive potential. Their faith in us representsour greatest commitment for the futureand we will strive to maintain it throughour reliable and high quality work, makingsure that our technologies will safely fulfiltheir purpose for a long time to come.It is my desire that the name “AŽD Praha”comes to the mind of everybody who hearsthe words Professionalism, Quality, Correctnessand Top Czech Technologies.Ing. Zdeněk ChrdleCEO and General Manager8


MANAGING BODIES AND ORGANISATIONAL UNITS9


AŽD Praha s.r.o. (Identification No. 48029483) issolely a Czech Company owned by a long-timestable group of owners. It is a limited liabilityCompany established pursuant to the CzechCommercial Code. It is registered in the ommercialRegister administered by the MunicipalCourt in Prague, Section C, Entry No. 4616.From legislative and economic point of view itconstitutes a single legal entity.The Company is managed by a Boardof Directors consisting of three executive directors.The Company Head Office has beenestablished to ensure top management andco-ordination functions and it manages andcoordinates activities aimed at implementationof the Company‘s subject of business.The Company labour relations were fulfilledduring the fiscal period in compliancewith the legal regulations of the Czech Republicand a Corporate Collective Agreement.The Company’s bodies and representativesare mentioned in this Annual report accordingto the state as of September 30, 2011.COMPANY BODIESas at 30. 9. 2011GENERAL ASSEMBLYEXECUTIVESIng. Zdeněk CHRDLEMiroslav HORAIng. Alice DICKOVÁSUPERVISORY BOARDIng. Miroslav KOZÁKIng. Vladimír KETNERDaniela VESELÁ10


COMPANY HEAD OFFICE AND HEADQUARTERSAŽD Praha s.r.o.Žirovnická 2/3146, 106 17 Praha 10Phone: +420 267 287 111Fax: +420 272 650 831E-mail: info@azd.czInternet: www.azd.czGeneral DirectorIng. Zdeněk CHRDLEPhone: +420 267 287 201Fax: +420 272 656 142Commercial Directorfor Czech RepublicIng. Petr FALTUSPhone: +420 267 287 416Fax: +420 272 650 831Financial DirectorIng. Miroslav KOZÁKPhone: +420 267 287 190Fax: +420 272 650 864Technical DirectorIng. Roman JUŘÍKPhone: +420 267 287 361Fax: +420 272 650 851Installation & ProductionDirectorMiroslav HORAPhone: +420 267 287 444Fax: +420 272 656 150Director of EquityHoldingsIng. Jiří BAŤKAPhone: +420 267 287 203Fax: +420 272 656 139Commercial Directorfor Road TelematicsIng. Vladimír KETNERPhone: +420 267 287 284Fax: +420 267 287 674Commercial Export DirectorIng. Petr ŽATECKÝPhone: +420 267 287 263Fax: +420 272 656 159European Affairs DirectorIng. Vladimír KAMPÍKPhone: +420 267 287 437Fax: +420 272 656 142Personnel ManagerIng. Miloslav SOVÁKPhone: +420 267 287 754Fax: +420 272 650 830Operation DirectorIng. Radomír ŠÍMAPhone: +420 267 287 741Fax: +420 272 650 83111


Organization UnitsTECHNIKA PLANTDirector of the PlantIng. Karel VIŠNOVSKÝAŽD Praha s.r.o., Technika PlantŽirovnická 2/3146, 106 17 Praha 10Phone: +420 267 287 223Fax: +420 272 650 823Deputy Director of Reseachand DevelopmentIng. Antonín DIVIŠPhone: +420 267 287 364Fax: +420 272 650 823Deputy Director of DesignIng. Josef BOREČEKPhone: +420 267 287 259Fax: +420 272 762 543PRODUCTION PLANT BRNODirector of the PlantIng. Jolana HORSÁKOVÁAŽD Praha s.r.o., Production Plant BrnoKřižíkova 32, 612 00 Brno – Královo PolePhone: +420 549 122 101Fax: +420 541 211 119PRODUCTION PLANT OLOMOUCDirector of the PlantIng. Stanislav SLAVÍČEKAŽD Praha s.r.o., Production Plant OlomoucRoháče z Dubé 6, P.O.Box č. 13,772 11 Olomouc 2Phone: +420 585 113 510Fax: +420 585 311 424INSTALLATION PLANT KOLÍNDirector of the PlantIng. Václav PAŘÍZEKAŽD Praha s.r.o., Installation Plant KolínPolepská 724, 280 02 Kolín IVPhone: +420 321 720 692Fax: +420 321 720 692INSTALLATION PLANT OLOMOUCDirector of the PlantIng. Zdeněk BÉBARAŽD Praha s.r.o., Installation Plant OlomoucJiráskova 5, 772 00 OlomoucPhone: +420 585 113 660Fax: +420 585 313 25012


LOGISTIC PLANT OLOMOUCDirector of the PlantDaniela VESELÁAŽD Praha s.r.o., Logistic Plant OlomoucŽelezniční 1, 772 10 OlomoucPhone: +420 585 113 210Fax: +420 585 311 270DIVISION TELEINFORMATICSDirector of the DivisionPavel ZÁLESKÝAŽD Praha s.r.o.,Division Teleinformatic PrahaUkrajinská 4, 101 28 Praha 10 – VršovicePhone: +420 274 012 612Fax: +420 274 012 611DIVISION OF SERVICE FORTELECOMMUNICATION AND SIGNALLINGTECHNOLOGYDirector of the DivisionIng. Václav BARTŮNĚKAŽD Praha s.r.o.,Division of Service for Telecommunicationand Signalling TechnologyŽirovnická 2/3146, 106 17 Praha 10Phone: +420 267 287 153Fax: +420 272 656 162DIVISION OF ROAD TECHNOLOGYAUTOMATIONDirector of the DivisionIng. Zdeněk GRUBLAŽD Praha s.r.o., Division of RoadTechnology AutomationKřižíkova 32, 612 00 Brno – Královo PolePhone: +420 541 421 540Fax: +420 549 210 074AŽD PRAHA S.R.O.,ORGANIZATION UNIT BRATISLAVADirector of the UnitIng. Miroslav REŠLAŽD Praha s.r.o.,Organization unit BratislavaPriemyselná 6, 821 09 BratislavaPhone: +421 258 282 301Fax: +421 253 412 04813


ORGANIZATION SCHEMEas at 30. 9. 2011GENERAL ASSEMBLYSUPERVISORY BOARDEXECUTIVESGeneral DirectorAdvisorsTechnical Inspections& Tests of STEDepartmentof Special TechnologyThe Representativeof IMSStaff & AdministrativeDepartmentChecking DepartmentLegal DepartmentEuropean AffairsDirectorOperations Director Technical Director Commercial DirectorInstallation & ProductionFinancial DirectorDirectorDirector of EquityHoldingsCommercial ExportDirectorCommercial Directorfor Road TelematicsOSBratislavaZOZOlomoucMZKolínMZOlomoucDTIPrahaZTEPrahaDSEPrahaForeignRepresentationEngineeringof foreignprojectsDSTBrnoVZBrnoVZOlomoucPRJ VAV UZZKey:VZ – Production PlantMZ – Production PlantZOZ – Logistic PlantZTE – Technika PlanPRJ – Design DepartmentVAV – Reseach and DevelopmentDSE – Service of Signalling and TelecommunicationTechnology DepartmentDTI – Division of TeleinformaticsDST – Division of Road Technology AutomationOS – AŽD Praha s.r.o. – Organization Unit BratislavaIMS – Integrated Management SystemUTZ – Specific Technical EquipmentUZZ – Foreign Trade Supportive Department14


Comments on the changes ofthe organizational structureDuring the fiscal year 2010/2011 the followingorganizational changes were madeeffective from 1st March 2010.Following decrease of investments intransport infrastructure in the Czech Republicand reduction of the scope of trafficconstructions on railways the companymanagement has taken principal measuresaimed at trouble-free solution of the difficultsituation.By Decision of the General ManagerNo. RSP-RZ-41/38 the activities of the ProductionPlant Praha had been graduallyscaled down in several phases and finallythe production plant was dissolved. Inthe first phase production activities werereorganised, a part of the production programhad been transferred to the productionplants in Olomouc and Brno, and effectivefrom 1 February, 2011 a ProductionWorkplace Praha was established and locatedin the Company premises in Prague10, Žirovnická 2/3146 under control ofLogistic Plant Olomouc. Selected employeesof the Production Plant Praha, mainlyfrom the Production technical preparation,Testing facility, and Tool shop departments15


were transferred to the newly establishedfacility. Other selected employees weretransferred to work positions at the Companyheadquarters and to several other organisationalunits.The remaining part of employees wasdismissed gradually from employmentwith the company by 30 June, 2011.By the Decision of the General ManagerRSP-RZ-41/39 other organisational changeswere made effective from 1 February, 2011.Separate units for installation activitiesand for production activities managementincluding managerial positions were dissolved.The activities were merged intoa single Installation and Production sectionand a managerial Installation and ProductionDirector position was established.The Installation Plants in Kolín and Olomouc,DTI Prague, Logistic Plant Olomoucand Production Plants in Brno and Olomoucshall report to the Installation andProduction Manager.Further, effective from 1 February 2011Operational Section and Operations Directormanagerial position were established.The purpose of the newly created organisationalunit is to realise orders and fulfil tasksrelated to maintenance and repairs of railwaytelecommunication and signaling equipment.During the first quarter of 2011 alsothe permanent office of the AŽD Praha s.r.orepresentation to the European Union inBrussels was closed down. However, activitiesof the representation and cooperationwith European railway institutions havecontinued to be maintained by the EuropeanAffairs Director on an ongoing basis.16


17WHO WE ARE


AŽD Praha Company is the major Czechsupplier of control/command, signalling,information and telecommunication systemsand technologies particularly for railand road transport.Owing to comprehensiveness of ouractivities ranging from need analyses anddevelopment of new systems, throughthe design, production and installationto long-term servicing AŽD Praha offers efficientsolutions tailored to the particularneeds of its customers.In addition to its stable position onthe domestic market, AŽD Praha Companyis also successful abroad where it alsobroadens its activities to non-Europeanmarkets.18


SCOPE OF BUSINESS19


COMMERCIAL SECTIONThroughout the long-term presence onthe transport infrastructure market AŽDPraha Company has reached a leadingposition in control/command, signallingand communication technologies in railways.It has become obvious in the recentperiod that the company is able to copesuccessfully with complex tasks resultingfrom the orders implemented withinthe company’s scope of business. AŽDPraha Company is able to ensure preparationof project documentation, its owninstallations and deliveries, provide necessaryservicing and warranty and postwarrantyrepairs.The company disposes of all certificatesauthorising the company to perform activitiesin railways and it disposes with capacitiescapable not only to completely installand put equipment into operation but alsoto equip the installations with requireddocumentation in accordance with relevantstandards and regulations. The activitiesof the company are not only focusedon direct orders, but also on design, development,research and production of signalling,control and communication systemsand their components.All these activities are performed withinan environment ensuring quality controlof production, installation and other worksincluding protection of environment andoccupational safety and health. Qualityof products and services, environment protectionand occupational safety and healthis guaranteed by fulfilling the requirementsof ISO 9001, ISO 14001 and OHSAS 18001standards. Compliance with these standardsis confirmed by certificates issued bythe IQNet certifying body.FOREIGN MARKETING ANDTRADE DEPARTMENTIncrease of orders from abroad belongs atpresent among the most successful attributesof AŽD Praha Company. As one of indicatorsshowing the growth of the exportbalance it can be mentioned that in 2010our company established another two subsidiariesabroad – AŽD Signalling Inc. inthe U.S.A. developing marketing and salesactivities on the local market, and MPCService company in Belarus, which will bein charge of all service activities connectedwith supplies of AŽD Praha systems to Belorussianrailways. Thus in addition to Serbiaand Bulgaria, AŽD Praha has now twomore direct representations abroad. Equallypromising are successful business negotiationsheld in other countries like Turkey,Greece, USA and India.COMMERCIAL SECTION FORROAD TELEMATICSThe commercial section for road telematics(OBU STM) offers and delivers advancedsystems and technologies meant forincreasing traffic flow and safety of roadtransportation. As an important milestonein the company’s activities successfulentry in the Asian market in the fiscalyear 2010/2011 may be mentioned, wherethe first phase of the highway line managementand information system installationin Azerbaijan has been completed. Further,OBU STM has successfully enhanced theiractivities, especially in the Czech Republic.The section offers and delivers to their customersa large product portfolio. The highwayand main road transport line managementsystem may be considered the mostsignificant product of these days. Also deliveriesof information systems, electronic systemsand management and signalling sys-20


tems for motorway and main road tunnelsare related to the system. No less importantproducts are the municipal command andcontrol centres, state-of-the-art system fortraffic light management on crossroads andpedestrian crosswalks, controlled parkingmanagement and tie-in guidance systemsto parking places. Monitoring systems, intelligenttraffic camera systems based on identificationand automatic recognition of car licencenumbers and identification of variousdriving offences rank among other products.OBU STM provides installations, repair,administration, maintenance and operationof public lighting for cities and towns.OBU STM offers complete solutions tailoredto the needs of customers startingwith project documentation and engineeringactivities, production and installation tomaintenance and servicing of the technologiesdelivered. Last year the section extendedtheir service offer with land communicationsafety audits.In addition to commercial activities the sectionalso concentrates on their “Production,repair and installation of measuring instruments”business including speed measuringsystems, tunnel physical quantity measurementsystems, and vehicles physical quantitymeasurement systems (height, weight etc.).The commercial section for road telematicsbelongs among long-time active membersof SDT CR (Road Telematics Association).It organises lectures and provides consultingservices and participates in project andgrant solutions of the Ministry of Transportsof the CR and the Ministry of Education,Youth and Sports of the CR.SPECIAL TECHNOLOGIESSpecial Technologies section is focusedon the activities lying beyond the mainscope of business of the company.It provides complex solutions of the systemsprotecting safety of persons andproperty, e.g. electronic safeguardingsystem, electronic fire system, camerasystem, access system, mechanical protections.The aforementioned technologiescan be connected to an integrationplatform. Based on the customer needsanalysis, the most appropriate solutionis proposed in form of a study andproject documentation can be prepared.Consequently our team carries out realizationof the project including suppliesof equipment, testing, staff training andsubsequent servicing.21


ANTICIPATED ACTIVITY DEVELOPMENT22


BUSINESSDifficulties caused by a decline in the globaleconomy are becoming evident atthis moment. The problems are reflectedin the national economic environment,where this situation makes difficult to meetthe state budget. It was for these reasonsthat cost-cutting budget measures wereadopted, including a drop in investmentsin the transport infrastructure and subsequentlya drop in the number of investmentprojects.In the situation which has recently arisen,AŽD Praha will have to focus on economicaland cost-saving solutions in its main activities.In the main area of control, signallingand communication systems, the potential ofthe production programme must be used insuch way so as to achieve the most effectiveutilisation for customer requirements. The efficiencyof the process must be supported byrelated service programmes and equipmentmaintenance orders. This course of actionwill allow AŽD Praha to maintain its key positionon the domestic market by gaining ashare in large transportation investments.The company’s professional level, itstechnical potential and long-term experiencealso allow the company to gaina greater share on foreign markets. With anappropriate pricing policy, foreign ordersshould compensate the certain fall in domesticinvestments and ensure successfuldevelopment of AŽD Praha.FOREIGN ACTIVITIESDespite continuing negative effects ofthe world economic crises the foreign ordersto the Company showed a dynamicprogress. Centralisation of foreign tradeoperation is a key aspect of the AŽD Prahaforeign activities. Individual destinations,called field of operation, are administeredby task groups of employees. These areteams usually put together when an importantcontract is acquired or a significantposition in the foreign market is achieved.These teams are centralised under one organisationof the Foreign Marketing andTrade department, allowing better controlover the foreign activities and coordinationof implementation of contracts withinthe company.Under the auspice of Foreign Marketingand Trade department, a new „Engineeringof foreign orders“ section responsible forproject management of foreign orders wasestablished.Priority foreign markets of AŽD Prahaare Belarus, Serbia, Montenegro, Lithuania,Bulgaria, Turkey, Greece, Egypt and USA.Newly the company strives to penetratethe territories of Latvia, Croatia, Taiwan andJordan.LithuaniaAŽD Praha as a member of the consortiumtogether with the Lithuanian companyUAB FIMA provides supplies of the signallingequipment for 100 km line sectionKaunas – Kybartai. Completing of the entirecontract is scheduled for August 2012.The supply includes ESA 11-LG electronicinterlocking and ABE-1-LG electronic automaticblock systems.BelarusDuring 2012 implementation of safeguardingsystem of approx. 100 km Polock – Vitebskline section shall be completed where AŽDPraha is to deliver ESA 11-BC electronic interlockingequipment, ABE-1-BC electronicautomatic block and universal power supplysources of the UNZ-BC-3 type. In December2011 deliveries of the systems ABE-1 andESA 11-BC for the Severnyj – Ždanoviči linesection were started. The project is scheduledto be completed in the 2nd quarter23


of 2012. Further AŽD Praha is completingpreparation of the project documentationfor construction of Mogilev, Lida, Kalinkovičilarge railway junctions and Baranoviči –Luninec and Osičopoviči – Žlobin line sections.The project documentation shallbe ready in the first quarter of 2012.SerbiaInterlocking systems for 5 level crossingswere installed in Serbia during 2011 financedby the Czech Development Aid. During2012 the company anticipates startingof project activities related to installation ofsignalling equipment for the Niš – Dimitrovgradline section.MontenegroIn Montenegro the 3rd phase of implementationof the Podgorica – Nikšič railway linewas completed and the final 4th phase isscheduled for 2012.TurkeyIn 2012 AŽD Praha shall terminate the warrantyservice of the PZZ-EA level crossingsystem on the Söke – Ortaklar line sectionand shall evaluate the accident rate comparedto the situation prior installation.The company plans starting the delivery ofa signalling system for Hasanbey depot inthe 1st quarter 2012.GreeceIn Greece, AŽD Praha has completed the deliveryand installation of 15 (fifteen) levelcrossing systems. Three level crossing systemshave been installed on the Thessaloniki– Alexandroupolis line and twelve levelcrossings in the premises of Thriassio Pediologistics centre near Athens. In 2012 evaluationof a public tender for installation of ThriassioII level crossing systems, in which AŽDPraha has submitted the economically mostadvantageous offer, is anticipated.USAIn 2011, AŽD Praha revised successfullythe level crossing system for the NashvilleEastern Railroad company (NERR) installedon the Waretown – Lebanon line section.AŽD Signaling Inc. subsidiary is planningtrial operation of the PZZ-US3 level crossingsystem on the Union Pacific lines andour inclusion in the vendor list.BulgariaAnother key territory for AŽD Praha is Bulgariawhere its Balkan SAST subsidiary has been establishedand operated since 2004. Since thenthe Balkan SAST has concluded a four year contractwith the Bulgarian Railways for deliveries oflevel crossing systems and has performed deliveriesof other railway signalling elements (pointmachines, signals). The key strategy on this marketis also based on the transfer of productionfrom the parent company with the objective toreduce costs and to support the local market.IndiaThe company has been finishing recertificationof the station interlocking systemof ESA 11-IR type in Lucknow conditioningparticipation in other commercial projects.ROAD TELEMATICSThe Commercial Section of Road Telematicstogether with the division of Road TechnologyAutomation plan to focus its activitiesin the following period mainly on the developmentand acquisition of other longtermcontracts and will seek to promoteour technology to other foreign markets.In the area of technological developmentthey will pursue the developmentand the expansion of advanced Telematicstechnologies and increase their competitivenesson foreign markets.24


INTEGRATED MANAGEMENT SYSTEMAND ENVIRONMENTAL PROTECTION25


The Integrated Management System (IMS)is an integral part of company managementmeeting all requirements of ISO 9001:2008,ISO 14001:2004 and OHSAS 18001:2007.It concerns an entire complex of interconnectedrequirements regarding qualitystandards, environmental protection andoccupational safety and health at work,which is incorporated into the overall corporatemanagement system. This modern integratedmanagement system manages QMS,EMS and OHSAS standards as a platform forimproving business performance, supportedby the objectives stated in the document“POLICY OF INTEGRATED MANAGEMENT SYS-TEM AZD PRAHA S. R. O.”The company in line with IMS and management‘sobjectives, all that with the supportof the staff, focuses its business activitiesto meet entirely the requirements,wishes and expectations of customers andother concerned partners. The active cooperationwith customers on matters ofquality and reliability of AZD Praha enablesthe company to reach top positions inthe competitive environment in the area ofits business.ENVIRONMENTALPROTECTIONWe minimize the impacts of the companyactivities on the environment.Consistent legal analysis of legislation inrelation to particular activities is an integralpart of the company success and its applicationto the management system throughspecific organizational standards ensuresthe legislation fulfillment. A responsiblecompany‘s approach to the environment isthen reflected in all business segments:Integrated Management System: IMSguarantees the quality, safety and environmentalperformance of AŽD Praha widerange activities. The company‘s managementsystem is introduced in the area ofenvironmental protection, incl. certificateaccording to DIN EN ISO 14001 and is regularlycertificated by re-certification and supervisoryaudits.Education: Continuing education of AŽDPrague staff in the field of individual environmentalparts (water, air, waste, nature,chemical substances and mixtures, energysavings) is the company‘s contribution tosustainable development in the environmentalarea, including mastery of environmentallyfriendly technologies.Marketing: Knowledge of the marketneeds in segment of signalling equipmentincluding environmental parameters isvery important for the success of our ownproducts and technologies with customers.Research and development: Responsibleapproach to developing of new productsand signalling systems will minimize impactson the environment. We are solvingcrucial stages of the life cycle of a new productwith regard to material inputs, analyzingits energy intensity and also the fate atthe end its useful life - the possibility of itsrecyclability.Design activities: High quality designpreparation of projects, including meetingall requirements stipulated by the state administrationbodies in the area of the environmentensures the compliance and alsothe cost optimization with the project implementation.Business: Selection of responsible subcontractorsand a contract signed to fullsatisfaction of all parties involved guaran-26


tees the quality, safety and environmentalefficiency of the work carried out underthe contract.Production: Modern machining centers inengineering production contribute to itsenvironmental performance and masteryof high technology in the electronics sector- in the PCB assembly it is the basis ofthe quality of products and componentsand the subsequent customer satisfaction.Assembly: Assembly work on line constructionsites in the countryside requirescareful and responsible approach tothe surroundings. Respecting of all decisionsof state administrative bodies inthe area of water, nature and landscapeprotection is the responsibility of all managersat various levels of management andemployees on construction sites and is anessential prerequisite for environmentalprotection.Service: Decreasing number of servicemissions for operating systems in the areaof telecommunication and signalling technologyis a reflection of AZD Praha productquality. For the service area it also pays credo„Not only fast, safely, but also ecologically.“The real ability to protect the environmentis reflected in the annually discussed„Environmental Profile of AZD Praha s.r.o.,“analyzing in detail the trends in individualareas of the environment. It summarizesthe analysis of the environment individualareas, evaluates the economic aspects andon the basis of these results it can be assumedthat the ongoing restructuring activities,including optimization of paint shopswill have also a beneficial impact on the environmentand besides reducing waste andair emissions it will result in energy savings.Logistics: Our modern fleet meetingthe required emission limits economicallysecures the supply of both the manufacturingand also assembly plants of the companyand also of our customers.27


RESEARCH AND DEVELOPMENT28


RAILWAY TRAFFICTraditionally AŽD Praha pays great attentionand the considerable financial resourcesto ensure quality outputs its owntechnology development. AZD Praha employshigh-quality and highly skilled developersand thanks to their superior resultsthe own in house research of the portfolioof key products is ensured.Besides the products for road telematicsand other activities, the decisive volumeof company production is formedby modern electronic systems to controland secure the railway traffic. In additionto the gradual electronization of the usualcategories of equipment, such as line signalling,station interlocking and level crossingsystems, the increasing attention is paidto brand new technologies, such as the useof satellite navigation in railway signallingtechnology. In addition, new approachesto improve railway safety are sought anddeveloped. The most widely known exampleis the development of Radioblok, whichwas launched into training operation onthe Číčenice – Volary track, and which isdesigned so as to increase the safety levelon lines of the D3 category with the lowestinvestment costs.Another important step is the completionof the pilot project of ETCS onPoříčany – Kolín line section where AŽDPrague contributed significantly in supplyof this modern European Automatic TrainControl System.An important part of railway signalingsystems form systems for its remote control.These systems (including systems andother subsystems) are also involved in trafficmanagement and they form an importantand effective tool for railway workers.A significant representative of these systemsfor the management of the railwaytransport there is the Graphic-technologicaloverlay of the signalling systems, whosemain function is providing an overview ofthe current and future traffic situation andalso automatic management of traffic documentation.Currently AŽD Praha is workingon important technological innovationof Graphic-technological overlay. This isa development of entirely new functionalityof Automatic train route setting, whoseintroduction will further enhance the workcomfort of traffic employees.The technical development, largelyprovided by our own research and developmentemployees, is also supportedby cooperation of several professionalcompanies, and some colleges and universities.Quality results of our own house technologicaldevelopment and research is a necessaryprecondition for successful applicationof our products in foreign markets and is alsoreflected into the international cooperation(e.g. within CENELEC, UNISIG and UNIFE).The AŽD own technological developmentalso enables use of its products inthe Prague’s Metro and the road signallingtechnology (both at home and abroad).ROAD TELEMATICSResearch and development for road telematicsis provided by a separate R & D centre.New types of controller development,the MR-11 (designed to control all typesof intersections) and MR-22 (designed tocontrol pedestrian crossings and small intersections)with integrated interface forthe OCIT communication protocol, werecompleted last year. These controllers usestandard components which guaranteetheir high quality. Their competitiveness isensured also by meeting the high requirementsof European Standards for operation29


safety when part of the system fails. Theyalready conform to current trend for use ofLED diode signals.The final certification of ČMI successfullycompleted a newer version for measuringsection speed, the MUR-07, and then startedinnovation of other camera systems.The development centre also devoteda great deal of attention to the extension offunctions of the EDAPTIVA urban traffic controlcentre. This control centre provides supervisionand control of traffic control withinsmall and large urban agglomerations,including connection to other telematicstechnologies installed in the monitoredarea (strategic detectors, variable trafficsigns, traffic continuous control, informationsystems for drivers, meteorological announcingpoints, camera systems, etc.).30


31PRODUCTION


A significant part of AŽD Praha is its ownindustrial production, which contributesto supply of the signalling and telecommunicationtechnology of our productionplants.Production plants perform the taskof the main manufacturers for buildingof the signalling and telecommunicationssystem projects implemented by AŽDassembly plants on railway projects inthe Czech Republic and abroad.Production plants significantly contributedto the ongoing restructuring of the Company.During this fiscal year the activitythe Production Plant Praha ended andthe newly established Production WorkplacePraha and its staff was transferred toLogistic Plant Olomouc.Within the specialization of productionplants the Production Plant Olomouc ismainly focused on engineering production.The plant is equipped with modernprogram-controlled CNC machining centers.Within restructuring of the productionplants, modern machines for sheet metalforming were moved from Prague to ProductionPlant Olomouc, where the productionof the cabinet program for needs ofour company and for external customerswas launched during the last year.The Production Plant Brno is specializedfor the production of electronic and electro-technicalconfigurations.Within restructuring of the productionplants the products of electronic and electro-technicalcharacter were taken fromthe production program of the ProductionPlant Praha and simultaneously the productsof an engineering character weretransferred into the Production Plant Olomouc.Cooperation production of electronicconfigurations for the external customers,especially the production of electron microscopesfor the FEI Company, has a largeshare in the production volumes.The high technical level of AŽD productionbase is designed to modern technologycorresponding to the global trends in the signallingand telecommunication technologyof electronics and mechanical engineering.PRODUCTION PLANT BRNOIn the area of AŽD manufacturing the ProductionPlant Brno is specialized in manufacturingelectronic and electro-technicalconfigurations for railway signalling andtelecommunications systems. The manufacturingprocess of installation of electronicconfigurations on printed circuit boardsare designed for the implementation ofpiece, small-lot to medium-sized productionof the large range of configurations.This corresponds with the proper equipmentby technological devices that enablerapid switching to different products.The required high quality and reliabilityof products for railway signalling and telecommunicationstechnology correspondswith maintaining a high professional levelof the technicians and operators, and strictevaluation criteria for assessing the productcompliance.In addition to production of electronic configurationsof repetitive own production alsoelectronic configurations for external customerare produced in the Production PlantBrno as well as prototypes of configurationsfor new systems developed by the TechnikaPlant. In this production area the capacity ofProduction Plant Brno to produce more complexelectronic configurations can be employedspecifically in double-faced assemblyof surface mounted components combineddouble faced assembly of components withoutlets into open holes.In the Production Plant Brno all electronicconfigurations on printed circuit boards are32


assessed against the criteria of internationalstandards applicable to most of IPC Class 3.In fiscal year 2010/2011 the ProductionPlant Brno was one of the implementersof the project „Restructuring of ProductionPlant“. As part of this project primarilyproducts of electronic and electro-technicalcharacter were taken from the productionprogram of Production Plant Prague, andsubsequently products of engineering characterwere passed from the production programof Production Plant Brno to the ProductionPlant Olomouc. Along with coping withextreme swings in the manufacturing capacityof the Production Plant during the last fiscalyear, the restructuring of the project wasas a challenge for the production managementand especially for departments of productionplanning and logistics.Cooperation production of electronicconfigurations for external customers andprimarily the production of electromechanicalvacuum sub assemblies (called consoles)of electron microscopes for FEI Companyhas a large share in the production volumesof the Production Plant Brno. Active approachof AŽD Prague to cooperate with thisimportant partner contributed to our winningthe tender for suppliers of higher unitsof electron microscopes. In the fiscal year2010/2011 new technologically clean manufacturingfacilities with an area of 750 m 2in Brno Street Gromešova, were put into operation,which represents not only doublingof the current production capacity, but alsoopens up a space for further developmentof future cooperation.Environmental protectionThe Production Plant Brno contributes toenvironmental protection within the environmentalpolicy and strategy of AŽDPraha, specifically by consistent utilisationof lead-free alloys in all soldering processesduring production of electronic andelectro-technical configurations of its ownproduction. The ban of use of lead in electro-technicaland electronic products asstipulated in the Directive EU 2002/95/ECRoHS and adopted by the Act No. 185/2001Coll., on waste, is thus adhered to.PRODUCTION PLANTOLOMOUCWithin the specialisation of productionplants the Production Plant Olomoucis focused on engineering production.The plant is equipped with modern, highperformance programme-controlled CNCmachining centers Mazak,, some of whichwere, owing to a successful project, co-financedby the European Fund for RegionalDevelopment and the Ministry of Industryand Trade of the CR.Also acquisition of sheet bending andshearing machines, TRUBEND 5170 CNCpress brake and TRUSHARE 3103 CNC plateshears and also purchase of BUA 25B/1250Practic universal plain grinder were a partof the project.Additional modern sheet metal formingmachines have been moved to the ProductionPlant Olomouc within the restructuringof production plants. TRUMPF TruPunch3000 punching centre and SAFAN e-Brake150-3100 TS1 press brake, owing to whichthe production of cabinet program waslaunched during the year in the ProductionPlant Olomouc.High quality and accuracy of the productsare also ensured owing to LK G-90C 3Dmeasuring centre and FARO Gate plus 3Dportable measuring equipment.Owing to the new machines and equipmentit is possible to apply successfullythe outputs of AŽD Praha research and developmentdepartments and to position33


signalling and telecommunication technologyproducts in the demanding conditionof foreign markets.In the sector of non-railway productionthe cooperation is maintained witha number of companies in Olomouc region(OSO Olomouc, John Crane, Koopron, WalterVysloužil) in the field of metal cutting.The cooperation with Saltec and Sécheronwas launched in the field of sheet metalforming.AŽD Praha makes large investments inmodernisation of production technologiesin individual production plants not only toincrease the productivity but also to continuouslyimprove its image in the area ofenvironmental protection which documentsthe starting of costly paint shop reconstructionin Production Plant Olomouc.34


35INSTALLATION


In the 2010/2011 business year the capacitiesof installation plants were concentratedon unfinished sections of railway corridorswhich have not been modernised, includingthe railway junctions. During the period underreview all projects implemented on corridorsand also on secondary lines were successfullyequipped with AŽD Praha moderntechnology. It mainly concerns new types ofthe line signalling system ABE-1, new electronicelements in the station interlockingsystems (ESA 11 and ESA 33) and last butnot least the axle counters PZN-1. In the DOZarea for remote control of individual stationsincluding the KSZZ communication systemwe continue deploying these systemswhich contributes to a better coordinationand safety of the railway traffic. In addition,our equipment has been supplemented byadvanced diagnostics for quick informationof the operators, maintenance and serviceworkers including GTN system for railwaytraffic employees. In this fiscal year the AŽDPraha systems were supplemented in manyrailway stations by a new function of loss ofshunt registering ,,EZŠ“ to improve trafficsafety on the route and this supplementingwill continue also in the next period. As anotherinnovation to improve traffic safety weare offering the VNPN function which is stoppingrailway vehicles when they pass the signal„Stop“ on all train routes and that in relationto the deployment of axle counters.In the area of telecommunication technologiesAZD Praha enters the market withseveral significant elements contributing tothe improvement of project facilities.During the period under review the list of completedprojects on railway corridors includes the following:• Optimisation of the Beroun – Zbiroh line• Optimisation of the Stříbro – Planáu Mariánských Lázní• Bystřice nad Olší – Český Těšín.Remaining optimisation projects:• Zbiroh – Rokycany• Mosty u Jablunkova – Bystřice nad Olší• larger part is activated, but it will becompleted in the next period.Other completed projects:• Rationalization of the Svitavy – Žďárecu Skutče line• Significant projects DOZ CDP Přerov andDOZ Střelice – Hrušovany.Furthermore the capacities of the installationplants were concentrated on other SŽDCinvestment projects of the modernisation,reconstruction and also repair works, whichare very important for safety improvement.In terms of a volume these individual projectsare less significant, but for railway safety arevery important, i.e. they ensure the railwaycrossing safety at all levels of crossings withroads. Upgrading the level crossing systemsand other equipment by signalling for blindsbecomes a default accessory of our projects.In this fiscal year over 11 projects were completedor partially complete and works at otherprojects are currently underway.In terms of foreign installation activitiesthere was seen the greatest success in Belarusand Lithuania. However, work continued also inother destinations, such as the Slovak Republic,Turkey, Greece, Syria, Serbia and the USA. In addition,the preparations for the completion ofthe Podgorica – Niksic project in Montenegro,which is largely activated, were in progress.In the foreign installation activities it isnecessary to ensure good coordination ofdesign work and respective manufacturingwith final installation and activation. Allunits of the process must be involved in theproject inner life including our developmentbase, which is an integral part of the processfor successful completion of the project.The total list of implemented projects includingan overview of the number of activatedmain technical units for the 10/2010-09/2011period are given in the following Table.36


The total number of implemented projects for fiscal period 2010/2011Period Project identification PS Activation Note4/Q–2010Reconstruction of LX in km 27,285 LukováLX km 27,285 10/21/2010 PZZ-EAVReconstruction of LX in km 44,176 OhnišťanyLX in km 44,176 10/14/2010 PZZ-EAVRacionalization of line Svitavy – Žďárec u SkutčeStation Žďárec u Skutče, interlocking 1117 11/26/2010 ESA 33Žďárec – Skuteč, line signalling 1126 11/26/2010 AHP 03Station Skuteč, interlocking 1116 11/26/2010 ESA 33Skuteč – Čachnov line signalling 1125 11/26/2010 AHP 03Station Čachnov, interlocking 1115 11/12/2010 ESA 33Čachnov – Borová, line signalling 1124 11/12/2010 AHP 03Station Borová, interlocking 1114 11/12/2010 ESA 33Borová – Polička, line signalling 1123 11/12/2010 AHP 03Station Polička, interlocking 1113 11/8/2010 ESA 33Polička – Květná, line signalling 1122 11/8/2010 AHP 03Station Květná, interlocking 1112 11/8/2010 ESA 33Květná – Svitavy, line signalling 1121 11/8/2010 AHP 03Station Svitavy, interface to CTC 1111 11/8/2010 DOZ - 1CTC Střelice – Hrušovany nad Jevišovkou, Stage I.Station Moravské Bránice, interlocking 15111.1 12/3/2010 ESA 33Silůvky – Moravské Bránice, line signalling 12/3/2010 AHP 03Station Ivančice, interlocking 42111.1 12/3/2010 ESA 3337


1/Q–20112/Q–2011Moravský Brod – Mor. Krumlov, line signalling 12/3/2010 AHP 03Station Moravský Krumlov, interlocking 17111.1 12/3/2010 ESA 33Moravský Krumlov – Rakšice, line signalling 12/3/2010 AHP 03Reconstruction of Station SilůvkyStation Silůvky 12/3/2010 ESA 33Střelice – Silůvky 01A 12/3/2010 AHP 03Optimization of line Beroun – ZbirohStation Hořovice, temporary interlocking 19-21-01 12/2/2010 ESA 11CDP PřerovCDP – CTC Přerov – Polanka 11 1/13/2011 DOZ 1CDP – CTC Přerov – Břeclav 11 3/17/2011 DOZ 1Reparation of interlocking in Station Roztoky u PrahyStation Roztoky u Prahy, interlocking 1 4/3/2011 ESA 11Construction no. K69 of stations VřesováStation V2-V3 1 4/14/2011 ESA 11dOptimization of line Stříbro – Planá u Mariánských LázníSvojšín – Ošelín, line signalling 56-21-01 4/30/2011 ABE 1Station Ošelín, interlocking 57-21-01 4/30/2011 ESA 11Ošelín – Pavlovice, line signalling 58-21-01 4/30/2011 ABE 1Station Pavlovice, head station 59-21-01 4/30/2011 ESA 11Optimization of line Beroun – ZbirohZdice – Hořovice, line signalling – def. 18-21-01 5/6/2011 ABE 1Station Hořovice, interlocking def. 19-21-01 5/6/2011 ESA 3338


3/Q–2011Slovakia – ŽSR, Žilina – Teplička, marshalling yard, stage II.Arrival group and transit 2001 5/6/2011 ESA 33Recostruction of Teplička interlocking – branching Váh 2002 6/10/2011 ESA 33Reconstruction of LX km 12,221, km 13,784, km 14,403on line Železný Brod – TanvaldLX km 12,221 5/27/2011 PZZ RELX km 13,783 5/27/2011 PZZ ACLX km 14,403 5/27/2011 PZZ REReconstruction of LX km 170,153 on line Chomutov – ChebLX km 170,153 5/31/2011 PZZ EARestoration of LX km 53,013 (Vysokov)on line Týniště nad Orlicí – MeziměstíLX km 53,013 6/30/2011 PZZ EAVOptimization of line Bystřice nad Olší – Český TěšínStation Třinec, interlocking 22-28-01 7/12/2011 ESA 33Restoration of LX km 23,823 (Březno)on line Mladá Boleslav město – Dolní BousovLX km 23,823 7/29/2011 PZZ EAVBelarus - Station Novopolock, interlockingStation Novopolock, Park TSB, interlocking 2 8/3/2011 ESA 11Restoration of LX km 103,907 (Prosečné)on line Turnov hl. n. – Chlumec nad CidlinouLX km 103,907 8/4/2011 EAV 1139


Optimization of line Zbiroh – RokycanyStation Kařízek, interlocking 25-21-01 8/12/2011 ESA 33Kařízek – Holoubkov, line signalling 26-21-01 8/16/2011 ABE 1Station Holoubkov, interlocking 27-21-01 8/16/2011 ESA 33Reconstruction of LX P6510 km 273,988 line Bohumin – Přerov 8/19/2011 PZZ EAHoloubkov – Rokycany, line signalling 28-21-01 8/25/2011 ABE 1Station Rokycany, interlocking 29-21-01 8/25/2011 ESA 33Rokycany – Mirošov, line signalling 29-21-02 8/25/2011 AHP 03Reconstruction of line Červená - Milevsko LX km 29,482LX km 29,482 9/16/2011 PZZ REReconstruction of line Červená – Milevsko LX km 37,360LX km 37,360 9/16/2011 PZZ REBelarus – Station Novopolock, interlockingStation Novopolock, interlocking 1 9/30/2011 ESA 1140


41DST BRNO


The implementing part of technology supply,traffic control on roads and applicationsin the field of road telematics is the Divisionof Road Technology Automation. Its activityfocuses on the production, installation,maintenance and servicing of such systems.DST Brno design activities are a significantpart of this division including engineering,operation development and advisory activityas a part of the commercial section ofthe road telematics strategy on the traffictechnology market.One of the most important contracts ofthe entire 2010/2011 fiscal year was the firststage of implementation of information systemand continuous control of the highwayin Azerbaijan. This was the first contract implementedin this Asian country.Throughout the business year implementationof long-term contracts were inprogress. One of them is the share of servicework and maintenance of the performancebasedtoll collection system (electronic toll)for selected freeway parts, high speed roadsand class I. roads of the Czech Republic.The other is the service of the informationsystem connected to ZPI (equipment for operationalinformation) and PDZ (variable trafficsigns) on the D1 expressway. The newestlong-term project is the restoration, operationand maintenance of public lighting andtraffic signal lights devices in Boskovice town.At the same time this Division also continuouslyprovides servicing and maintenanceof technologies of its own production whichare mainly signal light controllers (SSZ), parkingsystems, technology of the freeway tunnelValík at the bypass of the Plzeň city andvideo camera systems for measuring blockto block speed and passing on red light orthe signalling system of the Březno railwaytunnel near Chomutov. In the past year othertraffic intersections and development ofthe Malovanka tunnel under the Project Prahasuccessfully passed into operation. Alsothe project works of technology supply forthe Blanka tunnel complex continued.New intersections with traffic light wereinstalled in new commercial centers inModřany and Černý Most in Prague. Anothernew Prague intersection was developed atthe exit of the tramway loop at the newlyextended tram line in Podbaba. Here, the Divisionalso participated in the delivery ofa modern information system for passengers.To increase the pedestrian safety additionalpedestrian crossings were fitted withLED lights embedded into the pavement inthe Prague street „V Olšinách” and two pedestriancrossings in Most.With installations of own special technologiesadjusted for use at children‘s traffic playgroundsin the Czech Republic, DST Brno contributesto highway accident prevention. Lastyear, additional children‘s traffic playgroundswere equipped with these technologies, thistime in Štětkovice and in Žamberk.Significant completed projects:• Share on service activities and maintenanceof electronic toll system of selectedhighway sections, expressways and the 1 stClass roads throughout the Czech Republic.• Service activities of information systemcoupled with ZPI and PDZ on highway D1• Information system and the continuouscontrol system of the highway in Azerbaijan• Restoration, operation and maintenanceof the public lighting in Boskovice• Design, engineering, renewal and installationof light signalling equipment(SSZ) and dynamic coordination of intersectionswithin their renewal and developmentunder Project Praha (Ječná ×Legerova, Ječná × Sokolská, Vinohradská× Jana Želivského)• Installation of SSZ at Blanka tunnel complex• Management and maintenance of the Jihlavatunnel• Construction of intersections with SSZ inOrlová and Třinec.42


DIVISION OF TELECOMMUNICATIONAND SIGNALLING TECHNOLOGY SERVICE43


The Division of Telecommunication andSignalling Technology Service is a separateunit the main task of which is providingservice activities for the installed telecommunicationand signalling systems.It performs services resulting fromthe responsibility for equipment failuresduring the warranty period (warranty service)and also post warranty service andmaintenance for the telecommunication,signalling and information equipment.As a priority the Division provides servicingof the modernised technological units,in particular the electronic station interlockingsystems the line signalling and levelcrossing systems, remote control systemsincluding servicing of points and barrierprogram of AŽD Praha.The Division provides service of the SŽDCnetwork at 315 station interlocking equipment,1 031 level crossing systems, 102line sections of electronic automatic block,additional 106 line signalling equipment(automatic line block systems and reconstructedautomatic blocs), at remote controlequipment and related telecommunicationand information equipment. In additionthe Service Division provides service andmaintenance for the line signalling systemof the “Vřesinská – Zátiší” tram line. The serviceis also provided for METRO – Public TransportOperator of the City Prague (repairs ofthe 3rd stage on the IV.C1 line and the automatictrain control system). The Divisionalso provides service of the compensators ofdangerous currents at train sets of 680 series(Pendolino).Also the methodological guidance andsupervision service is rendered for systemssupplied by AŽD Praha to Belarus, Serbia,Montenegro, Greece and Turkey. In case ofcomplicated defect the problem is solveddirectly by the visit of Division of Telecommunicationand Signalling Technology Serviceemployee.The service activities have been carriedout by service groups and workplaces locatedin the cities in Ústí nad Labem, KarlovyVary, Prague, České Budějovice, Kolín,Pardubice, Olomouc, Brno, Břeclav, Ostravaand Plzeň. Warranty service in the SlovakRepublic is provided by organisational unitBratislava through the service group locatedin Poprad-Matejovce.Selected groups of the Division providecomprehensive support for the operationof the GNT application with the 24/7 availabilityregime. Division provides remote administration,hotline and helpdesk of operationalGNT (graphic-technological overlayof the signalling system). In total there aremore than 130 GPC computers in the CzechRepublic and the Slovak Republic.The maintenance department SZT providesthe maintenance of telecommunicationand signalling technologies in servicecenters Skalice, Svitavy (for Brno – ČeskáTřebová line) and Moravský Písek (for Hodonín– Nedakonice line section).The warranty service is provided continuously24 hours a day and 365 days a yearaccording to the emergency needs.44


LOGISTIC PLANT OLOMOUC45


Logistic Plant Olomouc covers an area of44,460 square meters and the total area ofheated halls is 6,370 square meters. Alongwith own road transport the plant is a logisticscentre of the company. Services relatedto purchase, storage, sale, distributionetc. are provided not only for all plants andorganizational units of the company, butalso for subsidiaries in the Czech Republicas well as abroad and for other businesspartners. A convenient location predestinesthe plant to hold emergency reserves for accidentsand unexpected events. The originalsystem storage stackers from the seventiesare gradually replaced by modern, efficient,computer-controlled technology tohelp make our work accurate and effective.The factory area is also consignment storagefor telecommunication and signallingwhich is one of the largest in the Czech andSlovak Republics.Last year, which was significantly influencedby the ongoing economic crisisand pressure on saving of public sectorin the Czech Republic, material in the totalvolume of CZK 1 823 million passedthrough our storage, of which for our plantsin the volume of CZK 775 million and materialfor customers abroad (including foreignsupplies) amounted to CZK 1 048 million.With the transfer of corporate activitiesoutside the Czech Republic, demands forlogistics are increasing but the basic ideato deliver goods on time and to the rightplace, remains. Last year we provided alldeliveries to Slovakia for the constructionof the V. railway corridor Nove Mesto nadVahom – Zlatovce and Trencianská Teplá –Beluša through our own trucking; also deliveriesfor marshalling yard Žilina – Tepličkaand for the project of the VI. railway corridorŽilina – Krásno nad Kysucou were completed.Deliveries to Lithuania for the Kaunas –Kybartai project, to Serbia and Montenegrocontinued. In cooperation with external carriersthe goods and materials were deliveredto Belarus for the Polock-Vitebsk line sectionand to Malaysia.The Logistic Plant also participated ina significant way to the ongoing restructuringof the company. During the year activityof the Production Plant Praha ended andthe newly established Production WorkplacePraha with its staff was transferredto the Logistic Plant. In terms of accountingany remaining material, intermediateproducts and finished products were transferredand physically stored in Olomoucfor further use. All problems associatedwith the transfer of production programsto two other production plants and relatedchanges in material and document supplythe Logistic Plant employees managedthrough personal initiative during the normaloperation.At the same time the first part ofthe supply centralization and warehousingservices within AŽD Praha have been completed.Warehouses of the Production PlantOlomouc were incorporated under the LogisticPlant Olomouc including their employeesand simultaneously the number ofjobs in the Logistic Plant and the ProductionPlant was reduced. In the ProductionPlant Olomouc storage areas adaptationof storage sites were made, open area waspartially roofed, and changes in the supplyof materials for production were graduallyintroduced.Although the global economic declinewas reflected in the reduction of requiredvolume for supplies and in increase of demandson services where emphasise onspeed and quality of service was muchgreater, the Logistic Plant managed tomeet all challenges of the last year and tocompete in the ever-increasing competition.46


AŽD PRAHA, EU AND INTERNATIONAL COOPERATION47


In the past year, AŽD Praha continued inthe active involvement in and monitoringof the technical and legislative processwithin the framework of the EU in the fieldof railway security equipment and railwaytransport in general. We are capable ofinfluencing many such processes thanksto our experts who work directly in selectedworking expert groups preparingthe legislation of technical standards andspecifications. Specifications created inthe EU bodies and subsequently adoptedas legally binding in the EU member countriesvery often specify the activities andfunctionality of equipment and productsdeveloped and delivered by AŽD. This activeapproach of our company has severaleffects:• the involvement in the standardizationprocess has saved significant funds forour own technical development, sincewe respond to the planned changes eitherby comments or timely adjustmentsof our systems,• our company is known as a reliable suppliercaring for the technical developmentin its field of business,• our experts cooperate with experts fromcompetitive companies, with representativesof railways as well as of Europeanauthorities and jointly deepen the knowledgein their fields of business.In the past period, basic technical interoperabilitydirectives (TID) were reviewedwithin the framework of the European Union.The TID that is the most important forour company – CCS subsystem “Control andSecurity” – newly resolves the requirementsfor the electromagnetic compatibility andfor general cooperation of the subsystemsvehicle and signaling equipment. Unfortunately,certain issues have remained unresolvedand therefore new driving vehiclesused for the railway infrastructure may notalways be compatible. UNISIG and ERA arecompleting changes to the ERTMS systemspecifications and issue of Baseline 3 ETCSis planned for April 2012.The above-mentioned activities havebeen provided in cooperation with the Unionof European Railway Industries (UNIFE)having its registered office in Brussels,which is a very important partner of the EuropeanCommission in the field of the railwaytraffic. Cooperation also takes place48


with individual manufacturers in the fieldof the railway industry. AŽD Praha is a longtermmember of UNIFE as well as the CzechAssociation of Railway Enterprises (ACRI)and an important member of the nationalTechnological Platform “Interoperability ofthe Railway Infrastructure”. The importanceof the cooperating world-wide RailwayFederation (UIC) having its registered officein Paris is currently lower for Europe due toits world-wide focus, but despite this wehave remained a partner of the cited federationin particular in the field of railwayresearch.2011 was the year when we closedAŽD’s permanent office in Brussels, sincethe main planned objectives have beenfulfilled. The more than three-year operationof this office allowed us to penetrateinto new fields and the cooperation commencedwithin the framework of the activitiesof the office have been further developed.The involvement of AŽD’s expertinto professional, standard-creating andlegislative activities is profound. The mostrecent great success achieved withinthe framework of the permanent office wasthe establishment of the association RailForum Europe, which consists of deputiesof the European Parliament and in whichcommittees concerning the railway transportare represented. The task of the Forumis to create a discussion platform aimed atimproving the understanding of the railwaytransport issues and making easierthe cooperation in development of jointstrategies and initiatives between deputiesof the EU Parliament and the railwaytransport. The chairman of the parliamentarytransport committee Mr. Simpson said:“The Rail Forum Europe should increasethe visibility of the railway transport amongthe authors of EU policies and help the railwayto play a decisive role in the EU’s transportpolicy.“Our cooperation within the frameworkof UNISIG continues, where we, togetherwith the other members of this consortium,are creating a specification of the ERTMS/ETCS system. The concept of the ERTMS/ETCS system has successfully conqueredthe whole world and more than a half ofthe installations of the ETCS system havebeen carried out outside the Europeancontinent. The ERTMS concept has thus gotoutside Europe and must be opened fornon-European customers. ETCS’s SteeringCommittee in UNIFE and the consortiumUNISIG have come with a new approach,where the European “E” in the abbreviation49


ERTMS will be replaced by the global “G”.The superstructure GRTMS will contributeto extending the functionality which opensa way to new markets.Our experts working for individual organisations,commissions and researchprojects spread the good reputation of AŽDand strengthen our position as the majorsupplier of transport signalling, telecommunications,controlling and automatingequipment in the Czech Republic and asan important European supplier of suchsystems.50


FINANCIAL PERFORMANCE51


The fiscal year 2010/2011 was significantlyaffected by the world-wide economic crisis.AŽD’s management reacted to suchsituation and eliminated decisive negativeinfluences and continued in the resultsachieved in the previous years.AŽD’s commercial turnover in the amountof CZK 3.6 billion generated in the fiscalyear 2010/2011 is lower in comparison withthe previous periods as a result of the limitationof construction works. AŽD Praha hascompensated the decrease of the volumeof construction works in the Czech Republicby entry to foreign markets, where ourtechnology has been successfully placed.However, signaling systems must be adjustedfor each foreign locality in terms of locallaws and transport regulations and moststart from the already operated technicalequipment and practices, including controllingin the language in question. In certaincountries, the whole signaling systemmust undergo a new local approval process.The entry to foreign markets is therefore significantlydemanding as regards technology,trade and time, but contributes to AŽD’slong-term stabilization and prosperity.AŽD Praha has responded to the decreaseof the volume of construction worksby decreasing the working capacity bythe controlled reducing of the numberof AŽD Praha employees to 1,557 (–197).As a result of the winding up of the manufacturingplant in Prague, the productionhas been transferred to the manufacturingplants in Olomouc and Brno, wherebythe utilization of their capacities has improved.AŽD Praha spent CZK 217 million forthe research and development in the periodmonitored.The composition of assets has been significantlyaffected by receivables, the majorityof which are within the maturity period,since the conditions in most orders setforth a long maturity period for invoices.By the distribution of the maturity of individualparts of performed works set forthin contracts, AŽD supports the sales, especiallyin the case of foreign orders. Reportedreceivables are gainful and paid withinthe due dates.In the assessed period, AŽD Praha reportednon-tax deductible reserves fora new generation of electronic signalingsystems, which are undergoing a longtermtesting operation and for which AŽDPraha has confirmed five-year guarantees.The situation in AŽD’s financing hasbeen stabilized, where the turnover hasbeen appropriately reflected in trade debtoraccounts and drawing on bank loans.AŽD Praha has not acquired any assetsthrough financial lease and has no due liabilitiesarising from the health and social insuranceas well as no tax arrears of payment.AŽD Praha has established organizationalunit in the Slovak Republic and Montenegro.AŽD Praha has gained controlling andsubstantial interests in ten subsidiaries inthe Czech Republic and in seven subsidiariesin foreign countries (three in Slovakiaand one in Belarus, Bulgaria, Serbia andthe USA).52


MAIN FINANCIAL INDICATORS OF AŽD PRAGUE S.R.OFor business year 2010/2011 – from 1. 10. 2010 till 30. 9. 2011Company accounting period is always from 1.10. till 30. 9. of subsequent yearIndicator/period 2007/2008 2008/2009 2009/2010 2010/2011Turnover in thous. CZK 5 622 130 5 280 867 4 339 761 3 695 308Profit after tax 304 656 275 148 216 790 184 408Profit from turnover % 5,41 5,21 5,00 4,99Value added tax 1 296 396 1 378 281 1 187 573 992 579Bank loans 1 598 526 1 104 031 824 323 672 808Employees-full time equivalent 1 835 1 867 1 754 1 557Company turnover / Employees – full time equivalentIndicator/period 2007/2008 2008/2009 2009/2010 2010/2011Turnover in mill. CZK 5 622 5 281 4 340 3 695Employees-full time equivalent 1 835 1 867 1 754 1 55753


Profit from turnoverIndicator/period 2007/2008 2008/2009 2009/2010 2010/2011Profit from turnover % 5,41 5,21 5,00 4,990 1 % 2 % 3 % 4 % 5 % 6 %2010/20112009/20102008/20092007/200854


COMPOSITION OF ASSETS AS AT SEP. 30, 2011 (in thousand CZK)Long-term intangible fixed assets 10 050Long-term tangible fixed assets 466 469Long-term financial assets 265 317Inventories 484 514Receivables 2 155 237Financial assets 311 545Accruals 10 029Assets total 3 703 161COMPOSITION OF LIABILITIES AS AT SEP. 30, 2011 (in thousand CZK)Registered capital 384 436Capital funds –568Funds from profit 75 692Retained earnings from previous years 828 370Profit of 2009/2010 184 408Reserves 813 658Liabilities 743 345Bank loans and other creditors 672 808Accruals 1 012Liabilities total 3 703 16155


BALANCE SHEETas at 30. 9. 2011 (in thousands of Czech Crowns)Identif.aASSETSbRowcGross1Current accounting periodAdjustment2Net3Previous periodTOTAL ASSETS (r. 02 + 03 + 31 + 62) 001 4 445 876 742 715 3 703 161 4 003 620A. Receivables from subscriptions 002B. Fixed assets (r. 04 + 13 + 23) 003 1 428 985 687 149 741 836 973 916B. I. Intangible fixed assets (r. 05 to 12) 004 86 824 76 774 10 050 5 617B. I. 1 Incorporation expenses 0052 Research and development 0063 Software 007 81 751 72 579 9 172 4 3934 Valuable rights 008 4 684 3 893 791 1 0725 Goodwill (+/–) 0096 Other intangible fixed assets 010 389 302 87 1527 Intangible fixed assets under construction 0118 Advance payments for intangible fixed assets 012B. II. Tangible fixed assets (r. 14 to 22) 013 1 042 178 575 709 466 469 514 259B. II. 1 Lands 014 100 979 100 979 100 9792 Constructions 015 459 278 190 420 268 858 281 6973 Equipment 016 671 859 576 657 95 202 128 3774 Perennial corps 0175 Breeding and draught animals 0186 Other tangible fixed assets 019Net456


Identif.aASSETSbRowcGross1Current accounting periodAdjustment2Net3Previous period7 Tangible fixed assets under construction 020 1 430 1 430 3 2068 Advance payments for tangible fixed assets 0219 Adjustment to acquired assets 022 –191 368 –191 368B. III. Long-term financial assets (r. 24 to 30) 023 299 983 34 666 265 317 454 040B. III. 1 Shares in controlled and managed oranizations 024 161 858 34 666 127 192 59 3732 Shares in accounting units with substantial influence 025 29 800 29 800 22 4273 Other securities and shares 026 100 255 100 255 100 2554 Loans to controlled and managed organizations and 027 8 070 8 070 271 985to accounting unit with substantial influence5 Other financial investments 0286 Financial investments acquired 0297 Advance payments for long-term financial assets 030C. Current assets (r. 32 + 39 + 47 + 57) 031 3 006 862 55 566 2 951 296 3 010 406C. I. Inventory (r. 33 to 38) 032 488 327 3 813 484 514 587 336C. I. 1 Materials 033 315 526 315 526 315 4352 Work in progress and semi-products 034 168 060 3 813 164 247 270 4263 Finished products 0354 Animals 0365 Merchandise 0376 Advance payments for inventory 038 4 741 4 741 1 475C. II. Long-term receivables (r. 40 to 46) 039 619 815 619 815 653 621C. II. 1 Trade receivables 040 469 654 469 654 501 1022 Receivables from controlled and managed organizations 0413 Receivables from accounting units with substantialinfluence042Net457


Identif.aASSETSbRowcGross1Current accounting periodAdjustment2Net3Previous period4 Receivables from partners, cooperative members and 043association members5 Estimated receivable 0446 Long-term deposits given 044a 1 157 1 157 1 2377 Other receivables 0458 Deffered tax receivable 046 149 004 149 004 151 282C. III. Short-term receivables (r. 48 to 56) 047 1 587 175 51 753 1 535 422 1 567 313C. III. 1 Trade receivables 048 1 311 249 51 753 1 259 496 1 489 2542 Receivables from controlled and managed organizations049 226 210 226 210 41 3623 Receivables from accounting units with substantial 050influence4 Receivables from partners, cooperative members and 051association members5 Receivables from social security and health insurance 0526 Due from state – tax receivable 053 35 847 35 847 21 1707 Other deposits given 054 7 924 7 924 6 1188 Estimated receivable 055 3 027 3 027 4 7559 Other receivables 056 2 918 2 918 4 654C. IV. Short-term financial assets (r. 58 to 61) 057 311 545 311 545 202 136C. IV. 1 Cash 058 3 765 3 765 6 7762 Bank accounts 059 307 780 307 780 195 3603 Short-term securities and ownership interests 0604 Short-term financial assets acquired 061Net458


Identif.aASSETSbRowcGross1Current accounting periodAdjustment2Previous periodD. I. Accruals (r. 63 to 65) 062 10 029 10 029 19 298D. I. 1 Deferred expenses 063 10 028 10 028 19 2862 Complex deferred costs 0643 Deferred income 065 1 1 12Net3Net4OznačeníaLiabilitiesbRowcCurrent period5Previous period6TOTAL LIABILITIES (r. 67 + 84 + 117) 066 3 703 161 4 003 620A. Equity (r. 68 + 72 + 77 + 80 + 83 ) 067 1 472 338 1 471 783A. I. Registered capital (r. 69 to 71 ) 068 384 436 384 4361 Registered capital 069 384 436 384 4362 Company´s own shares and ownership interests (-) 0703 Changes of registered capital 071A. II. Capital funds (r. 73 to 76) 072 –568 –1 675A. II. 1 Share premium 0732 Other capital funds 074 376 3763 Diferences from revaluation of assets and liabilities 075 –944 –2 0514 Diferences from revaluation in tranformation 076A. III. Reserve funds, statutory reserve account for cooperatives,and other retained earnings (r. 78 + 79)077 75 692 75 52259


OznačeníaLiabilitiesbRowcCurrent period5Previous period6A. III. 1 Legal reserve fund / indivisible fund 078 73 732 73 7323 Statutory and other funds 079 1 960 1 790A. IV. Profit/loss – previous year (r. 81 + 82) 080 828 370 796 710A. IV. 1 Retained earnings from previous years 081 828 370 796 7102 Accumulated losses from previous years 082A. V. Profit / loss – current year (+/–)083 184 408 216 790/r.01 – (+ 68 + 72 + 77 + 80 + 84 + 117)/B. Other sources (r. 85 + 90 + 101 + 113) 084 2 229 811 2 479 433B. I. Reserves (r. 86 to 89) 085 813 658 838 200B. I. 1 Reserves under special086 940 7 166statutory regulations2 Reserves for pension and similar payables 0873 Income tax reserves 0884 Other reserves 089 812 718 831 034B. II. Long-term payables (r. 91 to 100) 090 21 470 7 412B. II. 1 Trade payables 091 21 470 7 4122 Payables to controlled and managed organizations 0923 Payables to accounting units with substantial influence 0934 Payables from partners, cooperative members094and association members5 Long-term advances received 0956 Issues bonds 0967 Long-term notes payables 0978 Estimated payables 0989 Other payables 09910 Deffered tax liability 10060


OznačeníaLiabilitiesbRowcCurrent period5Previous period6B. III. Short-term payables (r. 102 to 112) 101 721 875 809 498B. III. 1 Trade payables 102 403 722 582 0042 Payables to controlled and managed organizations 1033 Payables to accounting units with substantial influence 1044 Payables from partners, cooperative members105 52 020 20and association members5 Payroll 106 61 397 118 9926 Payables to social securities and health insurance 107 37 389 22 1707 Due from state – tax liabilities and subsidies 108 30 106 21 2578 Short-term deposits received 109 29 985 33 2739 Issues bonds 11010 Estimated payables 111 107 249 30 15711 Other payables 112 7 1 625B. IV. Bank loans and financial accomodations113 672 808 824 323(r. 114 to 116)B. IV. 1 Long-term bank loans 1142 Short-term bank loans 115 672 808 824 3233 Short-term accomodations 116C. I. Accruals (r. 118 + 119) 117 1 012 52 404C. I. 1 Accrued expenses 118 250 21 0202 Deffered revenues 119 762 31 38461


PROFIT/LOSS ACCOUNTas at 30. 9. 2011 (in thousands of Czech Crowns)Identif.aTEXTbRowcCurrent1Fiscal periodPrevious2I. Revenues from sold goods 01 371 504 430 740A. Expenses on sold goods 02 327 118 375 174+ Sale margin (r. 01 – 02) 03 44 386 55 566II. Production (r. 05 + 06 + 07) 04 3 540 123 4 289 995II. 1 Revenues from own products and services 05 3 133 475 3 545 6302 Change in inventory of own products 06 –106 207 –6 0753 Capitalisation 07 512 855 750 440B. Production consumption (r. 09 +10) 08 2 591 930 3 157 988B. 1 Consumption of material and energy 09 2 244 464 2 831 200B. 2 Services 10 347 466 326 788+ Added value (r. 03 + 04 – 08) 11 992 579 1 187 573C. Personnel expenses 12 812 058 845 805C. 1 Wages and salaries 13 601 420 631 202C. 2 Renumeration of board members 14C. 3 Social security expenses and health insurance 15 207 986 211 610C. 4 Other social expenses 16 2 652 2 993D. Taxes and fees 17 4 273 4 508E. Depreciations of intangible and tangible assets 18 76 819 89 94162


Identif.aTEXTbRowcCurrent1Fiscal periodPrevious2III. Revenues from disposals of fixed assets and materials (r. 20 + 21 ) 19 209 923 260 998III. 1 Revenues from disposals of fixed assets 20 10 623 6 6142 Revenues from disposals of materials 21 199 300 254 384F. Net book value of diposed fixed assets and materials (r. 23 + 24 ) 22 141 565 162 796F. 1 Net book value of sold fixed assets 23 9 525 3 452F. 2 Net book value of sold material 24 132 040 159 344G. Change in operating reserves and adjustments25 –56 029 –22 172and complex deferred costs (+/–)IV. Other operating revenues 26 30 524 57 586H. Other operating expenses 27 36 632 110 553V. Transfer of operating revenues 28I. Transfer of operating expenses 29* Operating profit / loss30 217 708 314 726/(r. 11 – 12 –17 – 18 + 19 – 22 – 25 + 26 – 27 – 28) – (–29)/VI Revenues from sales of securities and ownership interests 31J. Sold securities and ownership interests 32VII. Revenues from long-term financial assets (ř. 34 + 35 + 36) 33 28 794 25 697VII. 1 Revenues from shares in controlled and managed organizations and 34 27 774 25 697in accounting units with subsantial influenceVII. 2 Revenues from others securities and ownership interests 35 1 020VII. 3 Revenues from other long-term financial assets 36VIII. Revenues from short-term financial assets 37K. Expenses associated with financial assets 38IX. Revenues from revaluation of securities and derivatives 3963


Identif.aTEXTbL. Cost of revaluation of securities and derivatives 40RowcCurrent1Fiscal periodPrevious2M. Change in financial reserves and adjustments 41 1 879 14 367X. Interest revenues 42 7 246 8 143N. Interest expenses 43 13 625 22 426XI. Other financial revenues 44 20 049 17 042O. Other financial expenses 45 53 918 60 917XII. Transfer of financial revenues 46P. Transfer of financial expenses 47* Profit / loss from financial operations (transactions)48 –13 333 –46 828/(ř. 31 – 32 + 33 + 37 – 38 + 39 – 40 – 41 + 42 – 43 + 44 – 45 – (–46) + (–47))/Q. Income tax on ordinary income (ř. 50 + 51) 49 19 967 51 108Q. 1 Due tax 50 17 690 39 308Q. 2 Tax deferred 51 2 277 11 800** Operating profit / loss ordinary activity (ř. 30 + 48 – 49) 52 184 408 216 790XIII. Extraordinery revenues 53R. Extraordinery expenses 54S. Income tax on extraordinery income (ř. 56 + 57) 55S. 1 Due tax 56S. 2 Tax deferred 57* Operating profit/loss extraordinary activity (ř. 53 – 54 – 55 ) 58T. Trasfer profit (loss) to partners (+/–) 59*** Profit/loss of current accounting period (+/–) (ř. 52 + 58 – 59) 60 184 408 216 790Profit / loss before tax (+/–) (ř. 30 + 48 + 53 – 54) 61 204 375 267 89864


AUDITOR’S REPORTAND SUPERVISORY BOARD’S ANNUAL REPORT65


Auditor’s Report on verification of the Final Accountsfor the period from October 1, 2010 to September 30, 2011Commercial company:AŽD Praha s.r.o.Registered office: Praha 10, Žirovnická 2/3146Identification No. (IČO): 480 29 483Subject of activities:Development, production, design, construction, servicing, consulting and engineering of telecommunication,signalling and automation systems - trade conducted by industrial methodsWe have verified the attached final accounts of the AŽD Praha s.r.o. company, i.e. balance sheet as at September 30, 2011, profit and loss statementfor fiscal year ending on September 30, 2011, summary of changes to the equity capital and cash flow summary for the fiscal year endingon September 30, 2011, and the annex to these final accounts including a description of accounting methods applied and other explanatoryinformation. Further data and information on AŽD Praha s.r.o. are stated in the annex to these final accounts.Responsibility of the statutory body of the accounting entity for the final accountsThe statutory body of AŽD Praha s.r.o. is responsible for compilation and true view of the final accounts in compliance with the Czech accountingregulations and for procurement of necessary internal inspection system to avoid any significant (material) inaccuracies caused by fraudor error.Auditor‘s responsibilityOur task is to provide an opinion concerning these final accounts on the basis of the audit performed. We have performed the audit in compliancewith the Auditor’s Act, International Auditor’s Standards and related application clauses of the Chamber of Auditors of the Czech Republic.In compliance with the cited regulations, we are obliged to adhere to the ethic standards and to plan and perform the audit to obtain reasonablecertainty that the final accounts contain no significant (material) inaccuracies.66


The audit includes performance of auditing procedures aimed at obtaining evidence on the amounts and facts stated in the final accounts.The selection of the auditing procedures depends on the auditor‘s judgement including an assessment of the risks for significant (material) inaccuraciesin final accounts caused by fraud or error. When assessing such risks, the auditor takes into consideration internal inspections whichare relevant for compilation and true view of the final accounts. The objective of the internal inspections assessment is to propose appropriateauditing procedures, but not to comment on the effectiveness of internal inspections. The audit also includes an assessment of the suitabilityof the accounting methods used, reasonability of accounting estimates as well as assessment of the overall presentation of the final accounts.We truly believe that the obtained evidence provides sufficient and appropriate base for providing our statement.Auditor’s statement (Without objections):Pursuant to our opinion, the final accounts of AŽD Praha s.r.o. provide a true and faithful image of the assets, liabilities and financialsituation as at September 30, 2011, and of the expenses, revenues, business results, equity capital and cash flow achieved duringthe period ending on September 30, 2011 in compliance with Accounting Act and relevant regulations of the Czech Republic.Auditing companyEKMA FIN, a.s.Registered office: Ondříčkova 27/609, 130 00 Praha 3Auditing company’s certificate No.: 076Report elaborated by: Ing. Jana Buková, auditorAuditor’s certificate No.: 1214Date: December 16, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ing. Pavel ŠrámekCEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ing. Jana Bukováauditor67


Supervisory Board’s Annual reportBusiness results of AŽD Praha s.r.o.for fiscal year 2010/2011In the course of the whole fiscal period the Supervisory Board observed the generally binding regulations pursuant to provisions of CommercialCode, Partnership Deed and General Assembly resolutions.At its regular meetings the Supervisory Board was informed about accepted intentions of Executive Plan, the company’s business results, the company’sfinancial situation, the organisational changes and company’s activities implementation in inland and abroad.The Supervisory Board acquainted itself with the auditor’s statement prepared by EKMA FIN a.s.’s auditor Ing. Jana Buková dated December 16, 2011and approved by the director of the Board Ing. Pavel Sramek.The Auditor’s statement is “Without objections” with classification:Pursuant to our opinion, the final accounts of AŽD Praha s.r.o. provide a true and faithful image of the assets, liabilities and financial situation as at September30, 2011, and of the expenses, revenues, business results and cash flow achieved during the period ending on September 30, 2011 in compliance withAccounting Act and relevant regulations of the Czech Republic.The Supervisory Board of AŽD Praha s.r.o. reviewed Annual report and fully approves this report without any objections and comments.The Supervisory Board therefore advises the General Assembly to approve the final accounts including the profit distribution proposal forthe cited fiscal period.Daniela VeseláSupervisory Board Chairman, AŽD Praha s.r.o.In Prague, on January 31, 201268


MANDATORY APPENDICES:ANNEX 1: Annex to AŽD Praha s.r.o. Final Accounts for 2010/2011ANNEX 2: Cash Flow SummaryANNEX 3: Summary of changes to Equity Capital for 2010/2011ANNEX 4: Report on relations between Interconnected Persons pursuant to Paragraph 66aof the Commercial Code of the Czech Republic for the fiscal period 2010/201169


This Annual Report has been prepared pursuant to the applicable Accounting Actand reflects the situation as at September 30, 2011.© AŽD Praha 2012

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