PANEVEZIO STATYBOS TRESTAS AB Consolidated Interim Financial Statements and Consolidated Interim Report for the First Half of 2019 (UNAUDITED)

30 August 2019 Panevezys

STATEMENT OF EXECUTIVE OFFICERS OF THE COMPANY

Hereby we confirm that based on the information available to us, the interim financial statements of the Company and the Group provided for the six months of the year 2019 prepared in accordance with the International Financial Reporting Standards are true and show the assets, liabilities, financial position, profit or loss and cash flows of Panevezio statybos trestas AB and Panevezio statybos trestas AB Group in a correct manner, and that the review of business development and performance is indicated correctly in the interim report.

Dalius Gesevicius Managing Director Panevezio statybos trestas AB

Danguole Sirvinskiene Chief Accountant Panevezio statybos trestas AB

AB "Panevėžio statybos trestas" P. Puzino g. 1, LT-35173 Panevezys Įmonės kodas 147732969 ĮVM mokėtojo kodas LT477329610 Tel. -370 45 505 503 Faks. +370 45 505 520 El. paštas: pslapst.lt ww.pst.lt

AB Luminor Bank A/s LT694010041200090221 AB SWEDBANK A:'s LT947300010000074994

1. Accounting period covered by the Semi-Annual Report

This Consolidated Semi-Annual Report of 2019 covers the period 1 January 2019 through 30 June 2019.

2. The main data about the Company (the issuer)

Name of issuer	Public Limited Liability Company Panevezio statybos trestas
Authorised capital	4,741,500 Euros
Address of registered office	P. Puzino Str. 1, LT-35173 Panevezys, Lithuania
Telephone	(+370 45) 505 503
Hax	(+370 45) 505 520
Legal-organisational form	Public Limited Liability Company
Date and place of registration	30 October 1993, Panevezys City Board
Registration No.	AB 9376
Register code	147732969
VAT code	LT477329610
ICEI code	52990000VPCGEWIDCX35
Administrator of Legal Entity Register	State Enterprise Centre of Registers
E-mail	pst(a)pst.lt
Website	www.pst.lt

3. Nature of the main operation of the issuer

The main operation area of the company and its subsidiaries (the Group) is designing and construction of various buildings, structures, equipment and communications and other objects in Lithuania and abroad, sale of building materials and real estate development. Furthermore, the company is engaged in rent of premises and machinery.

Vision

To become a reputed construction company in Europe, which uses advanced technologies, ensures quality and agreed work completions terms.

Mission

While honestly fulfilling our obligations, promoting long-term cooperation and proposing mature solutions in construction, we ensure profitable and sustainable business development.

Target

To retain the leading position in the construction market by creating the added-value to our clients, and employees.

4. The companies included in the Group of Panevezio statybos trestas AB

As of 31 June 2019, the Group of Panevezio statybos trestas AB included the following companies:

Subsidiary company	Registration date, register administrator	Company code	Registered address	Telephone, fax, e-mail, website	Portion of controlled shares (per cents)
Skydmedis UAB	17 June 1999 State Enterprise Centre of Registers	148284718	Pramones Str. 5. Panevezys	Tel. (+370 45) 467626 Fax (+370 45) 460259 info(@skydmedis.lt www.skydmedis.lt	100
Metalo meistrai UAB	16 June 1999 State Enterprise Centre of Registers	148284860	Tinklu Str. 7, Panevezys	Tel. (+370 45) 461677 Fax (+370 45) 585087 info(a)metalomeistrai.lt www.metalomeistrai.lt	100
Vekada UAB	16 May 1994 State Enterprise Centre of Registers	147815824	Marijonu Str. 36, Panevezys	Tel. (+370 45) 461311 Fax (+370 45) 461311 [email protected] www.vekada.lt	તેરે વિ
Alinita UAB	8 December 1997 State Enterprise Centre of Registers	141619046	Tinklu Str. 7, Panevezys	Tel. (+370 45) 467630 Fax (+370 45) 467630 [email protected] www.alinita.lt	100
Kingsbud Sp.z.o.o.	11 August 2010 District Court in Bialystok, XII Economic Department of National Court	200380717	A. Patli Str. 12, 16-400 Suwalki, Poland	Tel. (+48 875) 655 021 Fax (+48 875) 655 021 biuro(@kingsbud.pl www.kingsbud.lt	100
PS Trests SIA	22 May 2000 Centre of Registers, Republic of Latvia	40003495365	Skultes Str. 28, Skulte, Marupes Parish, Riga Region, Latvia	Tel. +371 29525066	100
Teritorija 000	3 June 2013 Kaliningrad Obl. Federal Tax Service Inspection No. 12	3528202650	Lunacharskogo Drive 43-27, Cherepovets, Bologda Obl., Russian Federation	Tel. +7 9097772202 Fax +7 9217234709 baltevromarketao@ mail.ru maslenal 1 @mail.ru	87.5
Seskines projektai UAB	9 November 2010 State Enterprise Centre of Registers	302561768	Verkiu Str. 25C. Vilnius	Tel. (+370 5) 2102130 Fax (+370 5) 2102131 [email protected] www.psti.lt	100
Ateities projektai UAB	25 April 2006 State Enterprise Centre of Registers	300560621	Verkiu Str. 25C, Vilnius	Tel. (+370 5) 2102130 Fax (+370 5) 2102131 [email protected] www.psti.lt	100
PST investicijos UAB	23 December 1998 State Enterprise Centre of Registers	124665689	Verkiu Str. 25C. Vilnius	Tel. (+370 5) 2102130 info@@psti.lt www.psti.lt	68

Tauro aparta- mentai UAB	23 October 2018 State Enterprise Centre of Registers	304937621	Verkių Str. 25C- 1. Vilnius	Tel.(+370 610) 09222 a.jokubaitis(@psti.lt	100
Hustal UAB	11 December 2018 State Enterprise Centre of Registers	304968047	Tinklu Str. 7. Panevezys	Tel.(+370 45) 461677 Fax (+370 45) 585087 egidijus.urbonas@meta lomeistrai.lt	100

Subsidiary companies of PST investicijos UAB:

ISK AU	13 July 2001 Independent Baltevromarket Registration Company 3906214631 AB - Administrator of shareholders' register		Rostovskaja Str. 5-7. Kaliningrad, Kaliningrad Obl., Russian Federation	Tel.+79097772202 baltevromarketao(a) mail.ru	100
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5. Contracts with the intermediary of public trading in securities

In 2013, the Company signed the contract with the Financial Brokerage Company Finasta AB for securities accounting and provision of services related with securities accounting. On 21 December 2015, the Financial Brokerage Company Finasta AB had been rearranged by way of merge with Siauliu bankas AB, which took over all assets, rights and liabilities of the Financial Brokerage Company Finasta AB from the mentioned date.

6. Data on trading in securities of the issuer in regulated markets

The ordinary registered shares of Panevezio statybos trestas AB have been on the Official Trading List of Nasdag Vilnius AB (company symbol PTR1L) since 13 July 2006.

Share type	Number of shares,	Par value	Total par value,	Emission code
	DCS	Euros	Euros	ISSIN
Ordinary registered shares (ORS)	16,350,000	0.29	4,741,500	LT0000101446

Company share price variation at the Stock Exchange Market Nasdaq Vilnius for the period covering 2015 through the First Half of 2019 (Euros)

Company share price variation at the Stock Exchange Market Nasdaq Vilnius for the First Half of 2019 (Euros)

Table 1. Information on the company share price at the Stock Exchange Market Nasdaq Vilnius (Euros):

Last price 30 June 2018	Last price 31 Dec 2018	Average share price for I half of 2019	Highest price for I half of 2019	Lowest price for I half of 2019	Last price 30 June 2019
0.90 EUR	0.858 BOR	0.803 EUR	0.878 EUR	0.710 BOR	0.723 BOR

7. Authorised capital of the issuer and its structure

As of 30 June 2019, the authorised capital of the company amounted to 4,741,500 Euros divided into 16,350,000 ordinary registered shares (ORS), the nominal value of each share being 0.29 Euros. All shares are non-certificated and fully paid. The proof of ownership is the record in the securities accounts. On 30 June 2019, the total number of shareholders was 1518.

Full name of a sharenolder (company name, type, headquarter address, company code)	Number of ordinary registered shares held by a shareholder under ownership right (pcs.)	Percentage of the authorized capital held	Percentage of votes granted by the shares held under ownership right	Portion of votes owned by a shareholder along with acting persons
Panevezio keliai AB S. Kerbedzio Str. 7, Panevezys Company code: 147710353	8,138,932	49.78	49.78
Clients of Swedbank AS Liivalaia 8, 15040 Tallinn, Estonia	1,284.733	7.86	7.86
Freely negotiable shares	6,926,335	42.36	42.36	844

Table 2. The shareholders holding or controlling more than 5 per cents of the authorised capital of the company:

None of the shareholders of the issuer has any special control rights. All shareholders have equal rights prescribed by Section 4 of the Law on Companies of the Republic of Lithuania.

The number of shares carrying votes at the General Meeting of Panevezio statybos trestas AB is 16,350,000.

8. Information on the performance of the issuer

Refering to the unaudited data, over the six months of 2019, the turnover of Panevezio statybos trestas AB amounted to 50.414 mln. Euros, that is by 28.6 per cents higher compared to the six months of the year 2018. The turnover for the six months of the year 2018 was 39.208 mln. Euros. In the first half of 2019, the company made the net profit in the amount of 0.807 mln. Euros, whereas over the first half of 2018 the company incurred losses in the amount of 0.664 mln. Euros.

The consolidated comprehensive income of the Group of Panevezio statybos trestas AB amounted to 49.324 mln. Euros and increased by 8.2 per cents compared to the income for the first half of 2018. Over the accounting period the Group made the net profit in the amount of 0.903 mln. Euros, whereas over the first half of 2018 the Group incurred losses in the amount of 0.879 mln. Euros.

Over the six months of 2019, EBITDA - earnings before interest, taxes, depreciation and amortization - of the company was 1.592 mln. Euros with 0.005 mln. Euros over the first half of the year 2018. EBITDA of the Group was 1.797 mln. Euros over the six months of 2019 compared to 0.003 mln. Euros over the first half of 2018.

Risk factors related to the company's operation:

In their operation, both the company and the Group face various types of risks:

legal regulation; ﻬﺪ
severe competition;
= shortage of qualified labour;
cyclical nature of economy;
macroeconomic factors;
damping.

Information on the types of risks and risk management is provided in the Neparate Financial Statements for the year ended on 31 December 2018 (Note 4) and the Notes to the Consolidated Financial Statements for the year ended on 31 December 2018 (Note 4).

	Group				Company
I half of 2017	I half of 2018	I half of 2019	Items	I half of 2017	I half of 2018	I half of 2019
33,548	45,567	49,324	Income	24,386	39,208	50,414
32,562	42,475	46,712	Cost	23,266	37,782	48,517
085	3,092	2,612	Gross profit	1,120	1,426	1,897
2.94	6.79	5.30	Gross profit margin (per cents)	4.6	3.64	3.76
-2,197	21	-244	Typical operating result	-1,122	-676	-1
-6.5	0.05	-0.49	Typical operating result from turnover (per cents)	-4.6	-1.72	-0.002
-874	3	1,797	EBITDA	-6	5	1,592
-2.6	0.01	3.64	EBITDA margin (per cents)	-0.03	0.01	3.16
-1,681	-879	003	Net profit	-619	-664	807
-5	1.93	1.83	Nets profit (loss) margin (per cents)	-2.5	-1.69	1.60
-0.10	-0.05	0.055	Earnings per share (Euros) (EPS) 2	-0.04	-0.04	0.049
-4.81	-2.42	2.60	Return on equity (per cents)(ROE)3	-1.63	-1.78	231
-3.22	-1.48	1.24	Return on assets or asset profitability (ROA)ª	-1.28	-1.20	1.20
-4.49	-2.30	1.93	Return on investments (ROI)3	-1 "29	-1.75	1.77
3.02	2.38	2.69	Current liquidity ratio	3.61	2.06	1.79
2.34	1.74	1.39	Critical liquidity ratio"	3.50	1.86	1.56
0.67	0.61	0.48	Equity ratio 8	0.79	0.67	0.52
2.14	2.22	2.12	Book value per share	2.33	2.28	2.14
0.49	0.41	0.34	Ratio of share price and book value (P/BV)10	0.45	0.40	0.34

Table 3. The results of the company and the Group of Panevezio statybos trestas AB for the First Half of 2017 through the First Half of 2019 (thousands Euros):

I EBITDA = profit before taxes, interest, depreciation. The essence of EBITDA indicator is to determine the most objective profit (loss) of the company, which is least dependable on circumstances (least variable).

. Variano por polition on more of many control and provinces (enter and represses contrades).
Presente of the poly more more of more opinal belong opinial belongeng o the sha

of mean inguity ratio = equity capital / assets = irremories) / experient

10 Price-to-book ratio (P/B ratio) = share price as of the end of reporting period / share book value.

Income and net profitability variation for the Company:

Income and net profitability variation for the Group:

Table 4. Income (mln. Euros) by operation types

	Group
min Euros	I half of	I half of	I half of
	2017	2018	2019
Construction works	29.14	40.83	46.30
Real estate	0	0	0
Products produced and other income	4.41	4.74	3.02

During the first half of 2019, the main income of Panevezio statybos trestas AB by operation types is from construction and erection. Over the first half of 2019, the income of the Group from construction and erection totalled 93,6 %, income from made products and other income amounted to 6,1 %. Over the first half of 2018, the income of the Group from construction and erection totalled 89,6 %, income from made products and other income amounted to 10,4 %.

	Table 5. Operating income (mln. Euros) by countries:
--	------------------------------------------------------	--	--	--	--	--

	Group			Company
	I half of	I half of	I half of	I half of	I half of	I half of
	2017	2018	2019	2017	2018	2019
Lithuania	26.05	38.79	40.74	23.79	37.56	46.33
Russian Federation	0	1.23	0.92	0.05	1.23	0.92
Scandinavian countries	6.67	રે .03	4.09	0	0	0
Other countries	0.83	0.52	3.58	0.55	0.42	3.17

In the first half of 2019 the main activities of Panevezio statybos trestas AB were carried out in Lithuania and made 91.89 per cents. The income of the Group from the works performed within the country made 82,59 per cents of the income, in the Scandinavian countries - 8,29 per cents. In the first half of 2018, the income within the country made 85,13 per cents of the income, in the Scandinavian countries - 11,05 per cents.

Environmental protection

Quality, environment protectional health and safety play a very important role in activities of Panevezio statybos trestas AB. Quality (ISO 9001), environmental (ISO 14001) and occupational health and safety (OHSAS 18001) management systems introduced and available at the company allow taking proper care of these significant factors. Assessment of occupational risk is carried out, analyses are performed and measures for risk reduction or elimination are taken on each site. For the purposes of environment and resource protection and sustainability, ensuring pollution prevention, in the beginning of each project the environmental plan including specific measures for control of significant aspects of environment protection and activities performed is prepared.

In 2018, the Lithuanian National Accreditation Bureau accredited the Construction Laboratory of the company for the period of 5 years in accordance with LST EN ISO/IEC 17025:2005, thus granting it the right to perform tests of building materials.

The companies of the Group also have quality, environmental health and safety management systems in accordance with the requirements of ISO 9001:2015, ISO 14001:2015, ISO 14001:2015/LST EN ISO 14001:2015 and LST 1997:2008/BS OHSAS 18001:2007 introduced and successfully functioning.

Employees

Professional, competent and responsible employees are of Panevezio statybos trestas AB. Therefore, much attention is paid to motivation of employees: environment favourable for generation and implementation of new ideas is being created and sharing of information is being promoted. In modern environment, competence of employees is one of the key factors describing competitiveness of the company. Considering this factor, the company encourages in all organizational levels to learn and improve their skills on a continuing basis. The employees are motivated not only by material incentives - competitive salaries, progressive bonus system but also by exceptional quality of working environment.

As of 30 June 2019, the number of employees in the Group was 1,016, in the company - 753.

Table 6. Average number of employees:

Average number of employees		I half of 2018	I half of 2019
	Group	Company	Group	Compuny
Managers	24	13	24	13
Specialists	316	243	ਤੇਤੇ ਹੋ	264
Workers	706	ર્ર I ર	680	493
Total	1,046	771	1,043	770

Table 7. Education level of the Group employees as of the end of the period:

PST Group employees	Payroll number	Higher university level education	Higher non- university education	Junior college education	Secondary education	Incomplete secondary education
Managers	24	22	0	2	0	0
Specialists	342	267	22	રે રે	20	0
Workers	650	29		133	419	62
Total:	1,016	318	29	168	439	62

Table 8. Average monthly gross pay per employee (Euros)

		I half of 2018*		I half of 2019
	Group	Company	Group	Company
Managers	4.020	4,772	3,512	4.090
Specialists	1.674	1,669	1,683	1,736
Workers	1,190	1,197	1,272	1,260
Total	1.448	1.473	1,490	1,515

*The average monthly gross pay per employee for the first hat of 2018 was recalculated following the law amending Articles 2, 4, 7, 8, 10, 23, 25 and 32 of the Law on State Social Insurance of the Republic of Lithuania No. I-1336.

Over the first half of 2019, the natural turnover of employees took place. Employment contracts do not include any special rights and obligations of employees or some part of them.

In 2019, the company also pays much attention to qualification improvement. Training in the company is done in three directions using:

1. Services of training arranging institutions (external training);
1. Services of higher education institutions (employee studies).

9. Essential events having taken place during the first six financial months of the year

Panevezio statybos trestas AB and Panevezys City Municipality has signed the contract for complex arrangement of the Laisves Square in Panevezys and its approaches. The contractual price of the work is 5,958,012 Euros. After the detailed design is ready, PST is planning to start working this summer and complete at the end of 2020.

After the contract award at the public procurement tender, Panevezio statybos trestas AB has signed the contract with Klaipeda City Municipality for conversion of the football school and swimming-pool building. The contractual price of the work is 11,326,645 Euros.

The company of the SBA Group, Urban Inventors, developing the Technology and Innovation Park near Klaipeda, has chosen Panevezio statybos trestas AB as the construction contractor. The subsidiary company Evenmor UAB has signed the 7 mln. Euro contract with the company for construction of the logistics centre. Construction of this centre is going to be the first stage of development in the park to be created by SBA.

The branch of Panevezio statybos trestas AB, Pastatu apdaila, completed construction of the new aluminium structure production shop, where aluminium profile systems, aluminium windows, doors and facades are going to be made. Investments of Panevezio statybos trestas AB in these new production premises totalled 700,000 Euros and there were 20 new work places created.

10. Information on research and development activities performed by the company and the Group

In order to maintain the highest competence in the construction sector, the Company implements innovative technologies and processes in its activities.

The Company keeps on improving the process of design preparation. The available designing software package is continuously supplemented by the up-to-date software.

Trying to carry out construction activities fluently, the Company pays a great deal of attention to construction preparation, work planning. For that purpose, investments are made in the modern software. Site construction activities are planned considering the BIM model is used from the tender preparation stage when the client gets an accurate tender of high quality. When BIM is used in the preparatory stage, detailed preparation for construction is performed by planning of necessary resources, scheduling production and supply, making the budget. Both construction schedule and computer simulation are prepared at the preparation stage. This allows comparing possible construction methods, choosing the optimal one and following the actual and planned progress of works in the course of construction.

The Building Information Modelling is used for delivery of products to the construction site at the times indicated in the construction schedule. This allows minimizing logistics costs and eliminating large storage areas on the construction site.

Application of BIM model in project management, planning and performance of works allow assessing risks, reducing probability of delay in work, taking immediate corrective actions, if necessary, and improving performance quality.

In order to accelerate production and improve quality, the Company invests in its production capacity. Targeted investments in modern computerized equipment and technologies, process automation are aimed at supporting the subdivisions of aluminium and glass structure production and installation, concrete industrial floor installation, foundation installation and landscaping.

11. Procedure for amendment of the Articles of Association of the issuer

Any amendments of the Articles of Association of Panevezio statybos trestas AB are made following the procedure set forth in the laws and regulations of the Republic of Lithuania.

12. Bodies of the issuer

Refering to the Articles of Association of Panevezio statybos trestas AB, the management bodies of the Company are the General Meeting of Shareholders, the Board and the Managing Director. There is no Supervisory Board is formed in the company.

The powers of the General Meeting of Shareholders have no difference from the General Meeting of Shareholders set forth by the Law on Companies.

The Board of the Company consisting of five persons is elected by the General Meeting of Shareholders for a period not longer than 4 years. At present, the Company consists of five members. The procedure for election and withdrawal of a member of the Board has no difference from the procedure set forth by the Law on Companies.

The activities of the Board are managed by the Chairman of the Chairman of the Board is elected by the Board from the members of the Board elects and removes from the office the manager of the Company the Managing Director, fixes his salary, sets other terms of the employment contract, approves his job description, gives incentives and imposes penalties.

The manager of the Company is a single-person management body of the Company who organizes the current economic activities based on the authority granted.

The Board:

REMIGITUS JUODVIRSIS - the Chairman of the Board. No membership in the capital of the Company. Membership in the activities or capital of the companies below:

Company	Position	Number of shares	Capital, %	Votes, %
Panevezio statybos trestas AB Company code 147732969 P. Puzino Str. 1, Panevezys	Chairman/ Adviser
Panevezio keliai AB Company code 147710353 S. Kerbedzio Str. 7, Panevezys	Board Member/ Adviser Main place of employment	531,675	28.47	28.47
Lauktuves jums UAB Company code 147797155 Laisves Sq. 26, Panevezys	Chairman	10,737	48.65	48.65
Pokstas UAB Company code 168424572 Gustoniu Vlg., Panevezys District Municipality		111	રેણ	50
Klovainiu skalda AB Company code 167901031 Klovainiu Township, Pakruojis District Municipality		470.421	8.74	8.74
Gustoniu ZUT UAB Company code 168581940 S. Kerbedzio g. 7F, Panevezys	Board Member	1,052	48,75	48,75
PST investicijos UAB Company code 124665689 Verkiu Str. 25C, Vilnius	Board Member	16.407	3.32	3.32
Convestus UAB Company code 300124684 Laisves Sq. 26, Panevezys		50,000	રેણ	રેી
Alproka UAB Company code 125281684 Verkiu Str. 25C, Vilnius	Chairman
Kauno tiltai AB Company code 133729589 Ateities Road 46, Kaunas		492	0.31	0.31
Specializuota komplektavimo valdyba AB Company code 121420097 Savanoriu Ave. 191A, Vilnius		21,490	1.07	1.07

Tertius UAB
Company code 247647690	704.638	80	80
S. Kerbedzio Str. 7F. Panevezys