General Information

1.1. general information

on the basis of Act 77/2002 Coll. on the Joint stock Company Czech railways, the state organisation railway route Administration and the Changes to the railways Act 266/1994 Coll., as amended, and the state enterprise Act 77/1997 Coll. as amended, České dráhy, a. s. (the ‘Company’ or ‘Čd’) was formed on 31 march 2002 and the state organisation Czech railways discontinued its activities and operations on 1 January 2003 and the Company and the state organisa- tion railway route Administration (‘sŽdC’) were formed as its legal successors. As of that date, the Company was recorded in the register of Companies. the sole shareholder of the Company is the Czech republic. the Company’s share capital is CZk 20,000,000 thousand. the Company’s registered office is located at nábř. L. svobody 1222, prague 1.

the consolidated financial statements have been prepared as of and for the year ended 31 december 2010. the reporting period is the calendar year, i.e. from 1 January 2010 to 31 december 2010.

1.2. principal operations

the Company has been principally engaged in operating railway passenger transportation. the assets comprising the railway routes are in the ownership of the state, not the Company. the right of management of these assets rests with sŽdC. sŽdC secures the operability of the railway route, Čd is engaged in the servicing of the railway route.

1.3. organisational Structure of the parent Company

the parent Company is organised into sections overseen by the Chief executive officer (Ceo) or deputy Ceos, being: the section of the Company’s Ceo and sec- tions of the Company’s deputies Ceo for Human resources, Finance, passenger transportation, operations, Administration of Assets and sales and marketing. 1.4. Bodies of the parent Company

the parent Company’s bodies include the general meeting, Board of directors, supervisory Board and Audit Committee. the general meeting is the supreme body of the Company. the sole shareholder of the Company is the state which exercises the rights of the general meeting through the steering Committee. the composition of parent Company’s Bodies as of 31 december 2010:

Authorities of the December 31, 2010

Features Name

SteeRing Committee Chairman radek Šmerda

Vice Chairman Jakub Hodinář member Lukáš Hampl member michael Hrbata member michal Janeba member miloslav müller member petr polák

through its resolution no. 582 dated 11 August 2010, the government of the Czech republic changed the composition of the Company’s steering Committee. the government revoked the authorisation for activity in the steering Committee for roman Boček, Chairman of the steering Committee, and pavel Škvára, Vice Chairman of the steering Committee, and eduard Havel, Bohumil Haase and miroslav kalous, members of the steering Committee, and authorised radek Šmerda to be the Chairman of the steering Committee, Jakub Hodinář to be the Vice Chairman of the steering Committee and Lukáš Hampl, michael Hrbata and michal Janeba to be members of the steering Committee with effect from 12 August 2010.

Authorities of the December 31, 2010

Features Name

BoaRd of diReCtoRS Chairman petr Žaluda

member Antonín Blažek member michal nebeský member Jiří kolář member milan matzenauer

Authorities of the December 31, 2010

Features Name

SupeRViSoRy BoaRd Chairman Lukáš Hampl

member Jan Bitter member michael Hrbata member Antonín Leitgeb member miroslav nádvorník member Jaroslav palas member Zdeněk prosek member radek Šmerda member Vladislav Vokoun

ConsoLIdAted FInAnCIAL stAtements (IFrs)

57

At its meeting held on 15 september 2010, the steering Committee approved a written notice of resignation of Jarosalv král from the position of the Chairman and member of the supervisory Board, recalled members of the supervisory Board karel Březina, tomáš Chalánek and pavel Škvára and appointed members of the supervisory Board Lukáš Hampl, michael Hrbata, miroslav nádvorník and radek Šmerda with effect from 16 september 2010. At its meeting held on 8 october 2010, the supervisory Board appointed Lukáš Hampl the Chairman of the supervisory Board.

Authorities of the December 31, 2010

Features Name

audit Committee Chairman miroslav Zámečník

member michael Hrbata member Zdeněk prosek

As of 30 november 2010, roman Boček resigned from the position of a member of the Audit Committee. the Audit Committee appointed michael Hrbata a member of the Audit Committee.

As part of implementing the Corporate governance project, the Company established the risk management Committee. the Committee is a permanent advisory body of the Board of directors.

Authorities of the December 31, 2010

Features Name

RiSk management Committee Chairman petr Vohralík

member michal nebeský member Jaroslav král member Antonín Blažek member milan matzenauer

1.5. Definition of the Consolidation Group

1.5.1. entities included in the Consolidation

Name of the entity Registered office Corporate ID Ownership percentage*) Degree of influence

České dráhy, a. s. prague 1, nábřeží L.svobody 12/1222 70994226

traťová strojní společnost, a. s. **) Hradec králové Jičínská 1605 27467295 0 Control Čd - telematika a. s. prague 3, pernerova 2819/2a 61459445 59.31 Control Výzkumný Ústav Železniční, a. s. prague 4, novodvorská 1698 27257258 100 Control dpoV, a. s. přerov, Husova 635/1b 27786331 100 Control JLV, a. s. prague 4, Chodovská 3/228, 45272298 38.79 significant Čd Cargo, a. s. prague 7, Jankovcova 1569/2c 28196678 100 Control *) ownership percentage is the same as the voting rights percentage

**) With respect to traťová strojní společnost, a.s., only transactions as of 18 August 2010 were included in the consolidation.

the consolidation group is hereinafter referred to as the “group”.

the following table shows the information on entities included in consolidation in which the parent Company exercises control (subsidiaries) as of 31 december 2010:

Name of the entity Principal activities

Čd - telematika a. s. provision of telecommunication services, software and advisory services Výzkumný Ústav Železniční, a. s. research, development and testing of rail vehicles and infrastructure facilities dpoV, a. s. Inspections, repairs, modernisation and renovation of railway vehicles Čd Cargo, a. s. Freight railway transportation

the following table shows the information on entities included in consolidation in which the parent Company exercises significant influence (associates) as of 31 december 2010:

ConsoLIdAted FInAnCIAL stAtements (IFrs)

59

Name of the entity Principal activities

JLV, a. s. provision of accommodation and catering services

pursuant to the registration in the register of Companies on 28 december 2009, Jídelní a lůžkové vozy, a.s. was renamed to JLV, a.s. 1.5.2. Changes in the Composition of the group

In 2010, the 51% equity investment in traťová strojní společnost, a.s. owned by České dráhy, a.s. was sold to ostravské opravny strojírny, s.r.o. the ownership title to the equity interest passed to the new owner on 18 August 2010.