MARKET

ENVIRONMENTAL PROTECTION

EMPLOYEES S O C I E T Y

Corporate Social Responsibility Report

of Kelprojektas Group of Companies

for 2016

No. 5

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ABOUT CORPORATE SOCIAL RESPONSIBILITY REPORT

Kelprojektas Group is now the biggest group of transport infrastructure engineering companies in the Baltic countries engaged in the design of transportation communications, buildings intended for public use, utility infrastructure, territorial planning works, consultation, technical supervision and project administration services in accordance with FIDIC and EU requirements. Corporate Social Responsibility Report is one of the ways to present the activity of a group of companies conducted in business, environmental safety and social environment. It gives an opportunity to introduce our existing and potential customers, business partners, employees and society with our ideas, goals and achievements. For the fifth consecutive year, we voluntarily present this Corporate Social Responsibility Report voluntarily prepared in accordance with the guidelines recommended by the Global Reporting Initiative, which describes the activities of the group of companies in 2016 in the field of responsible and sustainable business. The Report is presented on the web pages of the Group and is made available to all parties concerned: clients, business partners, employees, representatives of the media, and society. In implementing the environmental policy of Kelprojektas Group – to protect natural resources – the Report is not printed. Corporate social responsibility reports are prepared and presented once a year. Your questions and suggestions as concerning the information given herein are welcome by e-mail addresses info@kelprojektas.lt, info@urbanistika.lt, info@kelvista.lt

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CEO’S WORD

It is my pleasure to present already the fifth Corporate Social Responsibility Report, which reviews the progress made by Kelprojektas Group and its input towards creating and modernising responsible business and sustainable transport infrastructure during 2016. The year2016 were special for us as we celebrated the 60th anniversary of Kelprojektas, UAB. From its very beginning the company has been growing, changing and improving ever since. Today we can safely call ourselves an international group of companies. As the largest group of companies engaged in transport infrastructure and engineering in the Baltic States, in 2016, we actively pursued our activity in Lithuania and continued our business development in the Scandinavian market. We understand social responsibility within a group of companies not only as declarations of values or commitments. We seek to ensure that compliance with the principles of social responsibility would be an integral part of the day-to-day activities of the Group, that adopted decisions would not only include the provision of the highest-quality services, but also create an ethical and fair environment for business, employees and society. The secret of the success of a group of companies is its team because it employs true experts in its field, and the achieved results reflect the contribution and merit of each employee. I am glad that our efforts were appreciated and awarded in 2016: the project of reconstruction of state-owned motorway A5 Kaunas–Marijampolė–Suvalkai section from 45.15 to 56.83 km into AM category was recognized to be the “Best Road Project of the Year” at the “Our Road 2016” competition organized by the Lithuanian Road Administration, a gold medal at the “Lithuanian Product of the Year” competition was awarded for the project of reconstruction of the drawbridge over the river Danė in Pilies street in Klaipėda as well as for the plan of the management of national landscape of the Republic of Lithuanian prepared by company Urbanistika UAB.

Algimantas Medžiaušis, CEO

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ATTITUDE OF THE GROUP TOWARDS CORPORATE

SOCIAL RESPONSIBILITY

Kelprojektas Group undertakes to apply the best practice, experience, and know-how oriented towards continuous progress to the creation of the greatest value for parties concerned. Implementation of social responsibility in business is one of the components of the Group’s long-term strategy reflecting the philosophy, vision, mission, and values of activities. We see corporate social responsibility as:

transparent and fair business development;

ethical behaviour with employees and parties concerned;

provision of quality, innovative, as well as environmentally and socially friendly services;

balance between environmental protection, satisfaction of society needs, and our business development in the future.

Kelprojektas Group implements corporate social responsibility in the following four main fields:

relations with clients (market);

relations with employees;

relations with society;

environmental protection.

In our activities we follow:

Code of Ethics of Kelprojektas UAB;

Quality, Environmental Protection, Occupational Safety and Health Policy of the Group;

Corporate Social Responsibility Policy of the Group;

FIDIC (Federation Internationale Des Ingenieurs-Conseils)Code of Ethics for consulting engineers.

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MAIN AREAS

COMMUNICATION WITH PARTIES CONCERNED

The sustainable business development of Kelprojektas Group is highly related to a variety of parties concerned:

shareholders;

employees of the Group;

clients (customers);

business partners;

(sub)contractors;

state authorities;

general public and local communities;

the media. All of the above-mentioned interested parties have different expectations and raise different requirements for the Group, therefore, in order to ensure smooth cooperation, Kelprojektas Group implements a continuous dialogue with each party, informing about the ongoing activities and implemented solutions, possible risks and proposed actions to eliminate/reduce these risks. The dialogue takes place in different forms: internal periodic meetings, interactive surveys, external meetings, customer technical councils, round table discussions with state authorities, submission of proposals, publication of information on corporate websites, in the media, etc.

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MAIN AREAS

MARKET

The strategy of the Group is focused on the development of new activities and international business by offering innovative engineering solutions for environment and infrastructure as well as territorial planning and technical supervision services. We comply with laws, legislation, and such other acts governing the activities in the countries that we work in. We support honest and transparent corruption and bribery free business. MARKET DEVELOPMENT The expansion into foreign markets is one of the most important strategic goals of the Group. The subsidiary ICCON AB (Infrastructure and City Consultants), established in 2015 in Sweden, successfully continued its work and won about 20 new competitions in 2016. We also successfully continued our work with partners in Germany. What is more, we participated in contests and signed new contracts in Latvia, Estonia, Poland. FIGHTING CORRUPTION Strict observance of the law and integrity are the main values of Kelprojektas Group established in the Code of Ethics of the Group. The document is binding upon any and all employees of the Group. The Code of Ethics also obliges the employees to stick to any and all contractual obligations, laws, regulations, and rules in connection to fair competition, corruption, political contributions, etc., applicable in the Group. QUALITY

Considerable attention is devoted to ensuring the quality of services rendered and acquiring software as well as such other means to optimize daily work:

Kelprojektas employees started the year with the theoretical and practical training session “Performance Improvement Program” based on the Lean philosophy. Work groups created during the training continued to analyse the raised issues, provided suggestions for the improvement of operation. Moreover, in order to optimize processes and increase the daily performance, we introduced visual management boards.

In 2015, the transitional period for the installation of the Autodesk Vault Document Management System was successfully completed, after having lasted three years (from 2012). In 2016, the system was optimized –it allowed to organize, manage and monitor the process of preparing documents and drawings in a common system, to exchange information from any computer (“cloud computing”). The Audodesk Vault system developed subroutines that optimized and digitized processes: it was started to upload and approve invoices, asset purchase applications. In 2016, the implementation of Autodesk Vault was continued in the subsidiary Kelvista.

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MAIN AREAS

MARKET

In 2016, the accounting and business management system Microsoft Dynamic NAV 2015 (hereinafter referred to as “Navision”) was started to be installed as a software enabling to successfully manage and optimize the company’s business processes. We introduced a number of modules: accounting, personnel management, while the modules of financial management, budgeting and control of works (projects) were started to be installed. The program is being implemented in all companies of the Group. One of the major benefits of the program is that this system will bring together all the financial data of enterprises in one place, which will enable to effectively monitor the indicators of enterprises in order to make the necessary decisions quickly and in a timely manner and to plan the company’s business more efficiently. The system will be integrated with MS Project, where projects are already being planned and the control of ongoing projects is being implemented. The installation of Navision is implemented by renting this software, which allows companies to have the most up-to-date, most advanced and well-supported system throughout the work period.

In 2016, intensive work was devoted to the implementation of the project management system MS Project. This program will significantly improve the efficiency of project management in production departments: project schedules will be drawn, works and their deadlines will be planned, staff load and time accounting will be projected.

In implementing one of the priorities of Kelprojektas Group of companies – friendly solutions for the environment and society, the Group employees are constantly interested in various innovative programs that allow to more effectively evaluate the environmental impact of solutions proposed by the company. In 2015, LISA + software designed for traffic control and traffic flow calculations as well as search and testing of design solutions was tested. This year, we acquired LISA + add-on, which allows us to export the traffic control generated by LISA + program to the traffic simulation program VISSIM. This enables us during traffic simulation to simulate the work of adaptive traffic lights and to assess their impact on traffic flows. In our opinion and knowledge, no other Lithuanian company can do this.

In 2016, we continued to apply BIM (Building Information Modeling) in the preparation of projects. Building Information Modeling is a process, during which the entire information on building including any and all lifecycles thereof is generated and controlled – from a primary concept of a design to demolition or renovation of a building. Application of BIM enables to significantly reduce time and other costs spend for building design, organization of construction works, construction, engineering supervision of construction, maintenance, etc. Meanwhile BIM model analysis enables detecting errors before the manufacturing starts, when the building adjustment costs are still minimal. Kelprojektas applies BIM model in designing digital models of roads, railways, manifold, in preparing reports, technical documentation, data for equipment control, and in making visualizations. The subsidiary ICCON AB operates under the BIM standards established in Sweden.

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MAIN AREAS

Kelprojektas employees actively participate in the initiative work groups of the public institution “Skaitmeninė statyba”, the aim of which is to implement the BIM methodology in Lithuania. We also constantly follow and make proposals for the improvement of technical regulations, laws and other relevant legal acts.

INFORMING CUSTOMERS

In order to inform the interested parties about innovative technologies, new solutions in the field of transport infrastructure design and projects implemented by Kelprojektas, we continue to upload information on the websites of the Group. In the spring of 2016, in order to create added value for the public and to share information, we participated in the international exhibition “Resta”, which focused on Digital Construction. Here we shared experiences about ongoing BIM projects, innovative solutions and their application possibilities. APPRECIATING ACTIVITIES In 2016,Kelprojektas UAB and Urbanistika UAB participated in the competition “Lithuanian Product of the Year 2016” announced by the Lithuanian Confederation of Industrialists:

Kelprojektas UAB won the gold medal for the project of reconstruction of the drawbridge over the river Danė in Pilies street in Klaipėda.

Urbanistika UAB also won the gold medal for the plan of the management of national landscape of the Republic of Lithuanian.

The “Best Road Project of the Year” award in the competition “Our Road 2016” organized by the Lithuanian Road Administration under the Ministry of Transport and Communications as well as the Lithuanian Roads Association and the international magazine “Transport” was granted to KelprojektasUAB for the project of reconstruction of state-owned motorway A5 Kaunas–Marijampolė–Suvalkai section from 45.15 to 56.83 km into AM category. The organizers of the competition “Lithuanian BIM Projects 2016”– Public Enterprise “Skaitmeninė statyba” together with the magazine “Construction and Architecture” recognized the reconstruction project of Jakai crossroads prepared by Kelprojektas UAB as the Best Transport Infrastructure BIM project. Kelprojektas UAB is publicly recognized as an enterprise capable of developing digital models of construction projects and applying the BIM methodology. This is confirmed by recommendation issued by Public Enterprise “Skaitmeninė statyba” to Kelprojektas UAB. In 2016, the project of reconstruction of Gedimino st. two-level intersection with railway in Marijampolė was recognized as the Best Public Space at the exhibition-competition “Architecture: Kaunas 2016” organized by the Lithuanian Architects Union.

MARKET

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MAIN AREAS

EMPLOYEES Currently the Group employs 319 people: Kelprojektas– 245, Urbanistika – 27, Kelvista – 42, ICCON – 5 people.

Professional, highly skilled, creative, intellectual, and competent employees are the key factor determining successful activities of the Group. We appreciate our employees and undertake to adhere to the Ten Principles of the United Nations Global Compact, therefore, we do not tolerate:

discrimination (in respect to race, gender, age, etc.);

child labour;

unfree labour;

psychological violence. We respect our employees’ rights and comply with the law governing the security of the appropriate

working conditions. Every employee is evaluated according to the result, competence, and responsibilities. GENERAL INFORMATION Kelprojektas employs 245 people, where of – 154 (63 percent) men and 1 (37 percent) women. Chief executive officer and 5 department directors hold key positions in the company. Average age of employees in the company is 36 years. Urbanistika employs 27 people, where of – 5 (19 percent) men and 22 (81percent) women. Director holds key positions in the company. Average age of employees in the company is 41 years. Kelvista employs 42 people, where of – 34 (81 percent) men and 8 (19percent) women. Director holds key positions in the company. Average age of employees in the company is 42 years. ICCON employs 5 people, where of – 5 (100 percent) men. Director holds key positions in the company. Average

age of employees in the company is 44 years.

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MAIN AREAS

EMPLOYEES WORKING ENVIRONMENT, OCCUPATIONAL SAFETYAND HEALTH

Every year the Group organizes periodical employee health examination on site. Employees working under field conditions are immunized (get vaccination) against tick-borne encephalitis (TBE). Everyone can also get immunized (get vaccination) against flu.

Also, the company promotes healthy lifestyle and sports activities. Every month all employees are partially compensated for sports activities, receive special offers and discounts at the gym clubs, which the company cooperates with.

EMPLOYEE EDUCATION (IN-SERVICE TRAINING) During 2016, Kelprojektas promoted 17 employees, Kelvista – 4 employees. Kelprojektas has a system for the qualification assessment of employees engaged in internal design activities. In 2016, 36 employees wanted to check their qualification – after the qualification assessment 24% employees moved to a high level of qualification, and 13% were promoted.

For its employees, the Group organizes a few types of training. In 2016, Kelprojektas employees attended:

Management training: o at Lean Practice Improvement session, they learned about practical application of Lean. o refreshing financial, personnel management, labour law, public procurement, and IT knowledge o 46 employees improved foreign (English, Swedish) language skills.

Internal training is conducted by the employees themselves or lecturers invited to the company. In 2016 employees were trained to work with various software programs implemented in the company and introduced to relevant amendments to legal acts.

Professional skills training was attended by 66 employees, whereof40employees extended the existing certificates.

Urbanistika employees attended:

Professional skills training, where they extended the existing certificates.

Kelvista employees attended:

Management training, where they improved document management, accounting skills.

Professional skills training, where they extended the existing certificates and acquired new ones. The company’s employees attend various seminars, exhibitions, and conferences in both Lithuania and foreign countries.

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MAIN AREAS

EMPLOYEES

SOCIAL PACKAGE

The Group has formed a fund for social needs – to finance various allowances and benefits.

The company partially finances sports related expenses and collective leisure activities.

The company finances vaccines against flu and tick-borne encephalitis (TBE).

The company has equipped the sports zones.

The company offers an opportunity to acquire cheaper gym membership in a certain club.

The company organizes various traditional and other events and competitions: summer event “Spartakiada”, Group Christmas party, Kelprojektas birthday party, etc.

The company partially finances foreign (English, Russian, Swedish) language courses.

The company offers an opportunity to acquire a legal Office package for home free of charge. EMPLOYEE SATISFACTION SURVEYS The Department of Human Resources constantly conducts surveys in order to find out employees’ opinions on various issues. In 2016, a survey of production departments was carried out on the evaluation of the performance of administrative and support departments. According to the evaluation of the staff of production departments, they are satisfied with the activities of both administrative and support departments, the quality of feedback, and the speed of response.

OTHER RELEVANT INFORMATION

In 2016, the project “Beginner’s Day” was introduced, during which the newcomers of the Group were introduced with the company’s activities and motivational means, acquainted and communicated with the heads of departments. The feedback from the newcomers participating in this project on this type of day was extremely positive. In 2016, the Group continued to develop the KAIZEN ideas bank project. During 2016, the staff delivered 43 ideas (new and feasible thoughts on performance improvement) for which 574 KAIZEN points were allocated.

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MAIN AREAS

SOCIETY

We support the initiatives, which encourage the information society progress – we support culture, sports, and education. We cooperate with the academic community by providing financial support and initiating sharing of knowledge and experiences. In 2016 the Group implemented the following initiatives:

Creation of information society. We are concerned about the improvement of university study programs and the integration of students into the labour market. In 2016, Kelprojektas had 9 apprentices, Urbanistika, UAB, had 2. We participate in the Career Days and maintain close relations with the universities: Kelprojektas employees give lectures at Vilnius Gediminas Technical University, attend at defending bachelor’s and master’s theses by the students of Kaunas University of Technology, Vilnius Gediminas Technical University and Kaunas College. Urbanistika, UAB, employees give lectures at Vilnius Gediminas Technical University and Vilnius College of Technologies and Design.

Education: o For the fourth year in a row Kelprojektas arranged “Transport Infrastructure Innovations 2016”

conference, where experiences were shared among experts from Poland, Denmark, Germany, Sweden and Lithuania.

o Head of the Geological Survey of the Exploration Division Tadas Survila received a nomination for the successful implementation and development of this activity at the celebration organized by the Lithuanian Geological Survey and the Career Association.

o Manager of IT department participated in an annual Autodesk conference in Las Vegas (JAV) and read the announcement „TR21528-R: Vault Experience in Infrastructure Projects: Pilot, Company-wide Roll-out, ROI“.

o Manager of IT department read an announcement in the seminar “BIM för Infrastruktur – Framtidens sätta att bygga” (BIM for Infrastructure - The future of building) held in Sweden, the city of Goteborg.

Kelprojektas supported: o The finals of the Championship “Noodle Bridges 2016” for the construction of bridges from noodles

organized by Vilnius Gediminas Technical University for the fifth consecutive year; o various institutions/organizations. o The money donated by the company employees during the Pie Day contributed to the annual sports

games “Christmas Games 2016” held at Šiauliai Arena and attended by children of the children’s care home.

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MAIN AREAS

ENVIRONMENTAL PROTECTION

Being the biggest transport infrastructure design and engineering group in the Baltic countries, we realize that our services have a direct effect on the quality of life of society and the surrounding environment. Our solutions must ensure:

efficient development of infrastructure and transport communications;

reduction of adverse environmental effects;

preservation of flora and fauna. Therefore, we search for innovative solutions, which would help to ensure the implementation of all these

three factors. SAVING RESOURCES Paper

Customers and partners are sent electronic holiday greetings.

Documents, which are not necessarily to be printed, are prepared in an electronic form.

Kelprojektas uses envelopes of different formats which are made of 100 percent recycled paper.

Working material for internal needs is printed on both sides of the sheet.

The paper bought for printing is labelled with FSC and EU Ecolabel marks.

Waste

Waste, which is formed in economic activities, is collected, sorted, stored, and utilized in accordance with legal acts governing the collection and utilization of waste.

In order to reduce the formation of e-waste and to promote the reuse of unnecessary things, in 2013 the company introduced the auction, during which the company’s employees can acquire computers, furniture and vehicles at a symbolic price. In 2016, the company sold unused furniture, computers and household appliances.

All companies within the Group collect scrap paper and deliver it for recycling. Transport

In order to reduce CO2 emissions, the company renews its vehicle fleet every year. All vehicles acquired by the company in 2016 meet Euro 6 and Euro 6+ requirements and are more environmentally friendly.

Kelprojektas has acquired teleconference equipment, which enables organizing meetings on site. Employees are encouraged to opt for such an alternative as video conference instead of going to a meeting by car or such other means of transport.

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REPORT ACCOUNTABILITY

It is the fifth Corporate Social Responsibility Report drawn up in Lithuanian and in English. Employees of the Group have been familiarized with this Report by e-mail or online. Corporate Social Responsibility Report is public and all parties concerned can familiarize with it. The Report is available on www.kelprojektas.lt, www.urbanistika.lt, www.kelvista.lt, www.iccon.se

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Kelprojektas UAB

I. Kanto st. 25,

LT-44296 Kaunas

tel. +370 37 22 31 86

info@kelprojektas.lt

www.kelprojektas.lt

Urbanistika UAB

Žalgirio st. 90,

LT-09303 Vilnius

tel. +370 5 261 90 24

info@urbanistika.lt

www.urbanistika.lt

Kelvista UAB

Žalgirio st. 90,

LT-09303 Vilnius

tel.+370 5 210 87 45

kelvista@kelvista.lt

www.kelvista.lt