City Service SE — Interim / Quarterly Report 2015

Feb 29, 2016

CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE TWELVE MONTHS PERIOD ENDED 31 DECEMBER, 2015 (UNAUDITED)

City Service SE

CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE DWELVE MONTHS PERIOD ENDED 31 DECEMBER, 2015 (UNAUDITED)

Beginning of the reporting period 1 January 2015 End of the reporting period 31 December 2015

Business name City Service SE Registration number 12827710

Legal address Narva mnt. 5, 10117 Tallinn, the Republic of Estonia Telephone +370 5 239 49 00 Fax +370 5 239 48 48 E-mail info@cityservice.eu Website http://www.cityservice.eu Auditor Ernst & Young Baltic AS

STATEMENTS OF FINANCIAL POSITION 4
STATEMENTS OF COMPREHENSIVE INCOME 6
STATEMENTS OF CHANGES IN EQUITY 8
STATEMENTS OF CASH FLOWS 9
NOTES TO THE FINANCIAL STATEMENTS 11
1. GENERAL INFORMATION 11
1.1. ACTIVITIES 11
1.2. SHARE CAPITAL OF THE COMPANY 11
1.3. SHAREHOLDERS OF THE COMPANY 12
1.4. SHARE PRICE DEVELOPMENT FOR THE REPORTING PERIOD 12
1.5. CITY SERVICE GROUP 13
1.6. COMPANY'S SUPERVISORY BOARD 16
1.7. COMPANY'S MANAGEMENT 17
1.8. ACTIVITY AND SEGMENT INFORMATION 19
2. ACCOUNTING POLICIES 21
3. GOODWILL 22
4. OTHER INTANGIBLE ASSETS 25
5. PROPERTY, PLAND AND EQUIPMENT 26
6. TRADE RECEIVABLES 27
7. BORROWINGS 27
8. COST OF SALES 28
9. GENERAL AND ADMINISTRATIVE EXPENSES 28
10. OTHER OPERATING INCOME (EXPENSES) 29
11. FINANCE INCOME AND (EXPENSES) 29
12. DIVIDENDS PER SHARE 29
13. RELATED PARTY TRANSACTIONS 30
14. SUBSEQUENT EVENTS 31

STATEMENTS OF FINANCIAL POSITION

			GROUP	COMPANY
	Notes	As of 31 December 2015	As of 31 December 2014	As of 31 December 2015	As of 31 December 2014
Assets
NON-CURERENT ASSETS
Goodwill	3	9,631	9,304	-	-
Other intangible assets	4	18,648	16,603	117	160
Property, plant and equipment	5	18,576	19,385	466	356
Investment property		479	527	-	-
Investments into subsidiaries		-	-	32,603	32,604
Investments into associates		238	2,234	-	1,480
Non-current financial assets receivables and prepayments		12,818	19,324	15,450	19,842
Deferred income tax asset		5,348	5,400	48	118
Total non-current assets		65,738	72,777	48,684	54,560
CURRENT ASSETS
Inventories		1,497	1,145	-	-
Prepayments		1,476	904	57	36
Trade receivables	6	45,682	41,485	921	3,020
Receivables from related parties (including loans granted)	13	106	82	20,703	8,329
Other receivables and current assets		4,738	5,423	45	719
Cash and cash equivalents		17,136	13,362	7,101	5,837
Total current assets		70,635	62,401	28,827	17,941
Assets held for sale		-	2,342	-	-
Total assets		136,373	137,520	77,511	72,501

STATEMENTS OF FINANCIAL POSITION (cont'd)

			GROUP	COMPANY
	Notes	As of 31 December 2015	As of 31 December 2014	As of 31 December 2015	As of 31 December 2014
Equity and liabilities
Equity attributable to equity holders of the Company
Share capital		9,483	9,155	9,483	9,155
Reserves and share premium		21,067	21,383	21,067	21,383
Other reserves		(344)	1,742	2,653	2,653
Retained earnings (deficit)		39,985	32,671	27,587	17,988
Reserves of a disposal group classified as held for sale		-	(343)	-	-
		70,191	64,608	60,790	51,179
Non-controlling interests		439	600	-	-
TOTAL EQUITY		70,630	65,208	60,790	51,179
Liabilities
Non-current liabilities
Non-current borrowings	7	13,055	16,404	12,421	13,779
Financial lease obligations		1,614	1,664	147	153
Deferred income tax liabilities		3,033	2,876	-	-
Non-current payables		970	856	34	119
TOTAL NON-CURRENT LIABILITIES		18,672	21,800	12,602	14,051
Current liabilities
Current portion of non-current borrowings	7	3,738	2,953	2,096	2,267
Current portion of financial lease obligations		1,112	823	56	52
Short term loans	7	2,739	2,219	-	-
Trade payables		16,014	20,078	411	3,764
Payables to related parties (including loans received)	13	821	1,331	411	297
Advances received		7,968	5,616	929	685
Other current liabilities		14,679	14,654	216	206
TOTAL CURRENT LIABILITIES		47,071	47,674	4,119	7,271
Liabilities associated with assets held for sale		-	2,838	-	-
Total liabilities		65,743	72,312	16,721	21,322
Total equity and liabilities		136,373	137,520	77,511	72,501

STATEMENTS OF COMPREHENSIVE INCOME (for the period 1 January – 31 December)

	Notes		GROUP	COMPANY
		2015	2014	2015	2014
Continued operations
Sales		166,608	181,266	3,227	11,816
Cost of sales	8	(132,397)	(147,115)	(2,394)	(9,608)
Gross profit (loss)		34,211	34,151	833	2,208
General and administrative expenses	9	(28,489)	(26,120)	(2,112)	(3,583)
Other operating income (expenses), net	10	250	883	91	82
Profit (loss) from operations		5,972	8,914	(1,188)	(1,293)
Finance income	11	2,782	802	12,956	6,454
Finance expenses	11	(1,105)	(3,350)	(932)	(1,440)
Share of profit of associates	11	67	566	-	-
Profit (loss) before tax		7,716	6,932	10,836	3,721
Income tax		(1,504)	(1,813)	(277)	(3)
Net profit (loss) from continued operations		6,212	5,119	10,559	3,718
Discontinued operations Net profit (loss) from discontinued operations		1,700	989	-	-
Net profit (loss)		7,912	6,108	10,559	3,718
Other comprehensive income Exchange differences on translation of foreign operations		(214)	(770)	-	-
Total comprehensive income		7,698	5,338	10,559	3,718
Attributable to:
The shareholders of the Company		8,274	6,229	10,559	3,718
Non-controlling interests		(362)	(121)	-	-
		7,912	6,108	10,559	3,718
Total comprehensive income attributable to:
The shareholders of the Company		8,060	5,459	10,559	3,718
Non-controlling interests		(362)	(121)	-	-
		7,698	5,338	10,559	3,718
Basic and diluted earnings per share		0.26	0.20
(EUR)
From continued operations		0.21	0.17
From discontinued operations		0.05	0.03

STATEMENTS OF COMPREHENSIVE INCOME (for the period 1 October – 31 December)

	GROUP		COMPANY
	2015	2014	2015	2014
Continued operations
Sales	45,352	48,269	765	4,024
Cost of sales	(36,440)	(39,247)	(617)	(3,050)
Gross profit (loss)	8,912	9,022	148	974
General and administrative expenses	(6,694)	(7,282)	(483)	(522)
Other operating income, net	(609)	768	21	11
Profit (loss) from operations	1,609	2,508	(314)	463
Finance income	490	636	6,289	854
Finance expenses	(422)	(1,147)	(483)	374
Share of profit of associates	12	219	-	-
Profit (loss) before tax	1,689	2,216	5,492	1,691
Income tax	(576)	(834)	(40)	(8)
Net profit (loss) from continued operations	1,113	1,382	5,452	1,683
Discontinued operations
Net profit (loss) from discontinued operations	-	(208)	-	-
Net profit	1,113	1,174	5,452	1,683

STATEMENTS OF CHANGES IN EQUITY

GROUP	No tes	Share capital	Share premium	Foreign currency translation reserve	Other reserves	Retained earnings	Discontin ued operations	Total	Non controlling interest	Total
Balance as of 1 January 2014		9,155	21,383	(634)	2,656	27,605	-	60,165	721	60,886
Net profit		-	-	-	-	6,229	-	6,229	(121)	6,108
Dividends declared	12	-	-	-	-	(1,163)	-	(1,163)	-	(1,163)
Other comprehensive income		-	-	(770)	-	-	-	(770)	-	(770)
Total comprehensive income		-	-	(770)	-	5,066	-	4,296	(121)	4,175
Disposal of subsidiaries		-	-	147	-	-	-	147	-	147
Reserves of a disposal group classified as held for sale		-	-	343	-	-	(343)	-	-	-
Balance as of 31 December 2014		9,155	21,383	(914)	2,656	32,671	(343)	64,608	600	65,208

Balance as of 1 January 2015		9,155	21,383	(914)	2,656	32,671	(343)	64,608	600	65,208
Net profit		-	-	-	-	8,274	-	8,274	(362)	7,912
Dividends declared	12	-	-	-	-	(948)	-	(948)	-	(948)
Other comprehensive income		-	-	(214)	-	-	-	(214)	-	(214)
Total comprehensive income		-	-	(214)	-	7,326	-	7,112	(362)	6,750
Increase in share capital		316	(316)	-	-	-	-	-	-	-
Currency translation effect to share capital		12	-	-	-	(12)	-	-	-	-
Reserves of a disposal group classified as held for sale		-	-	(343)	-	-	343	-	-	-
Disposal of subsidiaries		-	-	(1,529)	-	-	-	(1,529)	201	(1,328)
Balance as of 31 December 2015		9,483	21,067	(3,000)	2,656	39,985	-	70,191	439	70,630

COMPANY	No tes	Share capital	Share premium	Legal reserve	Other reserves	Retained earnings	Total
Balance as of 1 January 2014		9,155	21,383	915	1,738	15,432	48,623
Net profit		-	-	-	-	3,719	3,719
Dividends declared	12	-	-	-	-	(1,163)	(1,163)
Balance as of 31 December 2014		9,155	21,383	915	1,738	17,988	51,179
Balance as of 1 January 2015		9,155	21,383	915	1,738	17,988	51,179
Net profit		-	-	-	-	10,559	10,559
Increase in share capital		316	(316)	-	-	-	-
Currency translation effect to share capital		12	-	-	-	(12)	-
Dividends declared	12	-	-	-	-	(948)	(948)
Balance as of 31 December 2015		9,483	21,067	915	1,738	27,587	60,790

STATEMENTS OF CASH FLOWS

		GROUP		COMPANY
	Notes	2015*	2014*	2015	2014
Cash flows from (to) operating activities
Net profit from continued operations		6,212	5,119	10,559	3,718
Net profit from discontinued operations		1,700	989	-	-
Adjustments for non-cash items:
Income tax expenses		1,553	1,866	277	3
Depreciation and amortisation	4,5	4,152	3,977	161	122
Impairment and discounting of accounts receivable		864	2,106	(98)	1,184
Impairment of intangible assets		-	(74)	-	-
Loss (gain) on disposal of property, plant and equipment	10	9	94	(6)	6
Impairment of goodwill		-	(63)	-	-
Dividend (income)	11	(10)	(10)	(9,510)	(5,120)
(Gain) loss from sale of investments		(3,837)	(564)	(2,114)	93
Gain from bargain purchase		-	(497)	-	-
Other financial activity, net		(326)	1,329	(399)	13
		10,317	14,272	(1,130)	19
Changes in working capital:
(Increase) decrease in inventories		(411)	61	-	-
(Increase) decrease in receivables and other current assets		(990)	(11,294)	3,988	703
(Increase) decrease in prepayments		(716)	334	(21)	18
(Decrease) in trade payables and payables to related parties		(2,048)	(4,675)	(3,439)	(6,819)
Income tax (paid)		(2,010)	(2,528)	(161)	(13)
Increase in advances received and other current liabilities		2,133	1,808	169	5
Net cash flows from (to) operating activities		6,275	(2,022)	(594)	(6,087)
Cash flows from (to) investing activities
(Acquisition) of non-current assets (except
investments)	4,5	(2,734)	(3,385)	(194)	(160)
Proceeds from sale of non-current assets		1,471	435	25	25
(Acquisition) of investments in subsidiaries (net of cash acquired in the Group)		(850)	(719)	-	(23)
Disposal of investments in subsidiaries and associates		3,513	12,666	3,594	13,421
Loans (granted) repaid		-	-	(8,800)	1,199
Dividends and interest received		1,099	(847)	10,122	5,252
Net cash flows from (to) investing activities		2,499	8,150	4,747	19,714
Cash flows from (to) financing activities
Dividends (paid)		(948)	(1,163)	(948)	(1,163)
(Repayment) of loans		(2,047)	(1,363)	(1,529)	(6,106)
(Repayment) of financial lease liabilities		(1,120)	(940)	(56)	(51)
Interest (paid)		(547)	(1,167)	(356)	(741)
Net cash flows from (to) financial activities		(4,662)	(4,633)	(2,889)	(8,061)

* Group cash flows for 2015 and 2014 comprise total consolidated Group, including discontinued operations.

STATEMENTS OF CASH FLOWS (cont'd)

		GROUP		COMPANY
	Notes	2015*	2014*	2015	2014
Net (decrease) increase in cash and cash equivalents		4,112	1,495	1,264	5,566
Foreign exchange difference		(395)	(705)	-	-
Cash and cash equivalents at the beginning of the period (continued operations)		13,362	12,629	5,837	271
Cash and cash equivalents at the beginning of the period (discontinued operations)		57	-	-	-
Cash and cash equivalents at the end of the period (continued operations)		17,136	13,362	7,101	5,837
Cash and cash equivalents at the end of the period (discontinued operations)		-	57	-	-

* Group cash flows for 2015 and 2014 comprise total consolidated Group, including discontinued operations.

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

City Service SE (hereinafter – "the Company") is a public limited liability company registered in the Republic of Estonia, which after conversion has taken over a public limited liability company City Service AS rights and liabilities (read more in Note 3 "Goodwill", paragraph "Investments and other changes during the twelve months of the year 2015").

The Company controls corporate group, engaged in provision of facility management and integrated utility services in Western, Central and Eastern Europe. The City Service group is the market leader in facility management and integrated utility services in the Baltic States. It provides services in whole Lithuania, Poland, Spain, Latvia, in St. Petersburg city in Russian Federation.

1.1. ACTIVITIES

City Service group provides facility management; maintenance and repair of engineering systems; management and renovation of energy resources; technical and energy audit of buildings; maintenance and cleaning of territories and premises, marketplaces administration, security services.

The most important buildings segments, administered by the City Service group are: residential apartment buildings; commercial buildings; public buildings; industrial buildings. The total area of buildings under the management of the Group is 38.8 million sq. m. at present.

During this year City Service group carried on implementing confirmed strategy and was further looking for growth opportunities in Central and Western Europe. Extensive negotiations with potential foreign companies regarding their acquisition, reorganization and implementation according to the Group's business model and standards were carried out.

The Group's areas of activity are relatively stable (core activities include: commercial and residential property administration and cleaning services) and tend not to fluctuate materially throughout the year unless significant acquisitions or divestments of certain subsidiaries occur during the reporting period.

1.2. SHARE CAPITAL OF THE COMPANY

The share capital of the Company is EUR 9,483 thousand as of 31 December 2015. It is divided into 31,610 thousand ordinary shares with the nominal value of EUR 0.30 each. All shares of the Company are paid up.

The Company does not have any other classes of shares than ordinary shares mentioned above, there are no any restrictions of share rights or special control rights for the shareholders settled in the Articles of Association of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital.

On 31 December 2015 all 31,610 thousand ordinary shares of the Company are included into the Parallel Market of Warsaw Stock Exchange (ISIN Code of the shares is EE3100126368). Trading Code of the shares on Warsaw Stock Exchange is CTS.

1.3. SHAREHOLDERS OF THE COMPANY

Shares of the Company also are included into the Offcicial List of NASDAQ OMX Vilnius Stock Exchange (ISIN Code of the shares is EE3100126368). Trading Code of the shares on NASDAQ OMX Vilnius Stock Exchange is CTS1L.

On 31 December 2015 the total number of shareholders of the Company was 1107.

Company's shares distribution among shareholders who have more than 5 % shares of the Company as of 31 December 2015 was the following:

	Number of shares held	Owned percentage of the share capital and votes, %
ICOR UAB, legal entity code 300021944, address: Konstitucijos av. 7, Vilnius, Lithuania	26,813,293	84.83 %
Genesis Emerging Markets OPP FD LTD, legal entity code OC 306866, address Cricket Square, Hutchins Drive KY 1-1111, Cayman Islands	1,605,183	5.08%
Other private and institutional shareholders	3,191,524	10.09 %
TOTAL	31,610,000	100 %

1.4. SHARE PRICE DEVELOPMENT FOR THE REPORTING PERIOD

Source: NASDAQ OMX Vilnius

1.5. CITY SERVICE GROUP

On 31 December 2015 the City Service group consists of City Service SEand the following subsidiaries (hereinafter referred to as "the Group"):

Company	Country	Share of the stock held by the Group as of 31 December 2015	Share of the stock held by the Group as of 31 December 2014	Main activities
UAB Antakalnio būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Apkaba	Lithuania	100%	-	Administration of dwelling-houses
UAB Aukštaitijos būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Baltijos būsto priežiūra	Lithuania	100%	100%	Dormant
UAB Baltijos NT valdymas	Lithuania	100%	100%	Real estate management
UAB Baltijos pastatų valdymas	Lithuania	100%	100%	Dormant
UAB Baltijos turto valdymas	Lithuania	100%	100%	Dormant
UAB Dainavos būstas	Lithuania	100%	100%	Dormant
UAB Danės būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Economus	Lithuania	100%	100%	Administration of construction buildings
UAB Justiniškių būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Jūros būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Kauno centro būstas	Lithuania	100%	100%	Dormant
UAB Karoliniškių būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Karoliniškių turgus	Lithuania	100%	100%	Marketplace administration services
UAB Konarskio turgelis	Lithuania	100%	100%	Marketplace administration services
UAB Lazdynų butų ūkis	Lithuania	100%	100%	Administration of dwelling-houses
UAB Lazdynų būstas	Lithuania	100%	100%	Dormant Administration of dwelling-houses
UAB Mano aplinka	Lithuania	100%	100%	Maintenance and cleaning of territories and premises
UAB Mano aplinka plius	Lithuania	100%	100%	Maintenance and cleaning of territories and premises
UAB Mano Būstas	Lithuania	100%	100%	Commercial real estate management and building maintenance
UAB Mano Sauga	Lithuania	99.27%	99.27%	Security services
UAB Mano sauga LT	Lithuania	100%	100%	Security services
UAB Namų priežiūros centras	Lithuania	100%	100%	Administration of dwelling-houses

UAB Naujamiesčio būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Naujosios Vilnios turgavietė	Lithuania	100%	-	Marketplace administration services
UAB Nemuno būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Nemuno būsto priežiūra	Lithuania	100%	100%	Dormant
UAB Pastatų priežiūra	Lithuania	100%	100%	Building maintenance
UAB Pašilaičių būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Pempininkų būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Radviliškio būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Skolos LT	Lithuania	100%	100%	Debt collection services
UAB Šiaulių būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Šiaulių namų valda	Lithuania	100%	-	Administration of dwelling-houses
UAB Šilutės būstas	Lithuania	99.84%	99.84%	Administration of dwelling-houses
UAB Vėtrungės būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Vilkpėdės būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Vilniaus turgus	Lithuania	100%	100%	Dormant
UAB Vingio būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Viršuliškių būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Žaidas	Lithuania	99.33%	99.33%	Administration of dwelling-houses
UAB Žardės būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Žirmūnų būstas	Lithuania	100%	100%	Administration of dwelling-houses
Administraciones SantaPola S.L.	Spain	100%	100%	Administration of dwelling-houses
Administracion Urbana y Rural Chorro, S.L.U.	Spain	100%	-	Administration of dwelling-houses
Afimen administración de finques, S.L.U.	Spain	100%	-	Administration of dwelling-houses
Concentra Servicios y Mantenimiento, S.A.	Spain	100%	100%	Commercial real estate management and building maintenance
Elche administracion de fincas, S.L.U.	Spain	100%	-	Administration of dwelling-houses
SIA City Service	Latvia	100%	100%	Dormant
SIA Namu serviss APSE	Latvia	100%	100%	Administration of dwelling-houses
SIA Riga City Service	Latvia	100%	100%	Commercial real estate management and building maintenance
City Service Poland sp. Z o.o.	Poland	100%	100%	Dormant
City Service Polska sp. Z o.o.	Poland	100%	100%	Country holding company

City Service Grupa Techniczna sp. Z o.o.	Poland	100%	100%	Building maintenance
EnergiaOK sp. Z o.o.	Poland	100%	100%	Sale of electricity
Grupa Techniczna 24 sp. Z o.o.	Poland	100%	-	Dormant
Famix sp. Z o.o.	Poland	100%	-	Administration of dwelling-houses
Progresline sp. Z o.o.	Poland	100%	100%	Administration of dwelling-houses
Famix sp. Z o.o.	Poland	100%	-	Administration of dwelling-houses
SANTER Zarządzanie Nieruchomościami sp. Z o.o.	Poland	100%	-	Administration of dwelling-houses
Zespół Zarządców Nieruchomości sp. Z o.o.	Poland	100%	100%	Administration of dwelling-houses
OAO Cити Сервис / ОАО City service	Russia	100%	100%	Administration of dwelling-houses
ЗAO Cити Сервис / ZAO City service	Russia	100%	100%	Administration of dwelling-houses
OAO Специализи-рованное ремонтно-наладочное управление	Russia	100%	100%	Construction and engineering
ООО МН Групп	Russia	100%	-	Dormant
ООО Жилкомсервис № 3 Фрунзенского района	Russia	80%	80%	Administration of dwelling-houses
ООО Чистый дом	Russia	100%	100%	Maintenance and cleaning of territories
ООО Подъемные механизмы	Russia	99%	99%	Elevator installing & tech. support

The Group's investment in an associate as of 31 December 2015 included an investment in Marijampolės butų ūkis UAB (34% of the share capital).

1.6. COMPANY'S SUPERVISORY BOARD

As of 31 December 2015, the Supervisory Board of the Company comprises of the following persons:

Name and surname	Position	Start of term	End of term
Andrius Janukonis	Chairman of the Supervisory Board	April 8, 2015	April 9, 2019
Gintautas Jaugielavičius	Member of the Supervisory Board	April 8, 2015	April 9, 2019
Artūras Gudelis	Member of the Supervisory Board	June 29, 2015	April 9, 2019

The Supervisory Board members do not control any shares of the Company.

Andrius Janukonis

Andrius Janukonis (born in 1971) is the Chairman of the Supervisory Board of City Service SE (since 2009 till 2015 the Chairman of the Board). He holds a Master's degree in Law. He works as a consultant for ICOR UAB and is the chairman of the board of the company (since 2004).

Gintautas Jaugielavičius

Gintautas Jaugielavičius (born in 1971) is a Member of the Supervisory Board of City Service SE (since 2005 till 2015 a Member of the Board). He holds a Bachelor's degree in Economics. At present, he works as a consultant for ICOR UAB and is a member of the board of the company (since 2004).

Artūras Gudelis

Artūras Gudelis (born in 1977) is a Member of the Supervisory Board of City Service SE (since 2015). He holds Bachelor degree in economics and Master in business management.

1.7. COMPANY'S MANAGEMENT

As of 31 December 2015 and as of date of submission of this report, the key managers of the Company and of the Group are as follows:

Name and surname	Position within the Company	Start of employment
Jonas Janukėnas	A Member of the Board	2007
Vytautas Turonis	Executive Manager for Lithuania	2004
Edvinas Paulauskas	Executive Manager	2005
Remigijus Jakubauskas	Head of the Group companies, operating in Poland	2013
Anna Górecka – Kolasa	Head of the Group company, operating in Poland	2013
Fernando López Abril	General Manager of the Group company, operating in Spain	2013
Jonas Šimkevičius	Member of the Board of Group company, operating in Latvia	2005
Vytautas Junevičius	Chairman of the Board of group companies in Russia	2006

They do not control any shares of the Company.

Jonas Janukėnas

Jonas Janukėnas (born in 1976) is a Member of the Board of City Service SE (since 2015). Since 2013 Mr Janukėnas was the General Manager, since 2007 Financial and Administrative Manager. Mr Janukėnas is also the Chairman of the Board at Mano Būstas UAB (since July, 2012). He holds a Master's degree in Business Administration. Prior to coming to work at the Company, he worked as the Financial Manager of UAB Litesko (2001 – 2007) and Senior Auditor and Risk Management Consultant at the Vilnius division of Andersen (1998 – 2001).

At present, the main task of the Member of the Board is to head the Group and take charge of planning and coordination of important development projects in Poland, Spain, as well as other markets in Eastern and Western Europe.

Vytautas Turonis

Vytautas Turonis (born 1972 m.) is the General Manager at Mano Būstas and works as the Executive Manager for Lithuania at City Service SE. He holds a Bachelor's degree in International Business. Previously he worked as the Marketing Manager of UAB Specialus Autotransportas (2003 – 2004). He started to work in the Company as the Market Development Department Manager (2004 – 2008).

Vytautas Turonis is responsible for the Group's activities throughout Lithuania.

Edvinas Paulauskas

Edvinas Paulauskas (born in 1976) is the Executive Manager at City Service SE and Mano Būstas, UAB. Previously he worked as the Commercial director (since 2008). Edvinas Paulauskas started working in the Company as the Project Manager (2005-2006). He holds a Bachelor's degree in Environment Engineering.

Edvinas Paulauskas is responsible for the Group's activities in the commercial and exploitation departments as well as in the innovation and energy efficiency chapter throughout Lithuania and foreign markets.

1.7. COMPANY'S MANAGEMENT (cont'd)

Remigijus Jakubauskas

Remigijus Jakubauskas (b. 1974) is the head of the Group companies, operating in Poland: Zespół Zarządców Nieruchomości sp. Z o.o., City Service Polska sp. Z o.o., City Service Poland sp. Z o.o. R. Jakubauskas is responsible for the Group companies activities in Poland. Prior to that, Mr. Jakubauskas worked as a project manager in Poland. R. Jakubauskas has an educational background in energetics.

Anna Górecka – Kolasa

Anna Górecka - Kolasa (b. 1975) is the head of the company City Service Grupa Techniczna sp. Z o.o., operating in Poland. A. Górecka – Kolasa has been working for the Group since 2013, prior to that she hold positions of Management and Control Director, Chief Analysis Specialist and Deputy Accountant General (2004–2013). A. Górecka-Kolasa has higher education in the area of management and marketing.

A. Górecka-Kolasa is responsible for the activities of City Service Grupa Techniczna sp. Z o.o throughout Poland.

Fernando López Abril

Fernando López Abril (b. 1969) is Director General of the company Concentra Servicios y Mantenimiento. Previously (in 2010-2012) he held the position of the company's Business Development Director. Before joining the Group company, F. López Abril was employed as Commercial Director of the company AMS-ALDESA (2007-2010), worked as a regional manager for the company CESPA-FERROVIAL (2004-2007) and held position of Director of Technological Systems and Nuclear Services Department at the company BORG Service (1999-2004). F. López Abril holds the Master of Sciences degree in agricultural engineering.

F. López Abril is responsible for the Group's activities in Spain.

Jonas Šimkevičius

Jonas Šimkevičius (b. 1980) is a member of the Board of the company Riga City Service. operating in Latvia. Previously J. Šimkevičius worked for the company as a project manager. (2005-2007) and before that he held different positions in the companies Limatika (2004-2005)) and Ranga IV (2002-2004). J. Šimkevičius has the Bachelor's degree in constructions. engineering.

J. Šimkevičius is responsible for the Group's activities in Latvia.

Vytautas Junevičius

Vytautas Junevičius (b. 1965 m.) has been the chairman of the board for the City Service Group companies, operating in Russia, since 2014. Mr. Junevičius commenced his activities in the Group as the head of Kaunas subsidiary (2007 - 2014). V. Junevičius has a bachelor's degree in management.

V. Junevičius is responsible for the Group's activities in Russia.

1.8. ACTIVITY AND SEGMENT INFORMATION

Information on main Group's geographical segments:

2015	Baltic states	St. Petersburg	Poland	Spain	Discontinued operations	Total
Revenue: Total revenue	68,512	31,693	24,918	41,485	7,650	174,258 174,258
Segment results Unallocated	7,517	448	(244)*	(808)**	(642)	6,271 (941)
expenses Profit from operations						5,330
Net financial income Profit before income tax						4,135 9,465
Income tax expenses Net profit for the						(1,553)
year						7,912
Other segment information Capital expenditure	2,300	125	1,492	332	-	4,249

* Includes EUR 562 thousand loss, arising from the start of technical services activities.

** Includes EUR 620 thousand redundancy costs.

2014	Baltic states	St. Petersburg	Poland	Spain	Discontinued operations	Total
Revenue: Unallocated income Total revenue	69,005	40,309	23,481	47,662	13,378	193,835 809 194,644
Segment results Gain from bargain purchase	8,378	1,344	170	(491)	(272)	9,129 497
Unallocated expenses						(984)
Profit from operations						8,642
Net financial income						(668)
Profit before income tax						7,974
Income tax expenses						(1,866)
Net profit for the year						6,108
Other segment information
Capital expenditure	3,295	171	1,537	1,001	24	6,028

1.8. ACTIVITY AND SEGMENT INFORMATION (cont'd)

Information on main Group's geographical segments:

2013	Baltic states	St. Petersburg	Poland	Spain	Discontinued operations	Total
Revenue: Unallocated income Total revenue	68,633	46,461	21,966	12,313	22,247	171,620 291 171,911
Segment results Gain from bargain purchase (including	7,272	1,752	597	454	1,861	11,936
goodwill and intangibles impairment) Unallocated						(375)
expenses						(957)
Profit from operations						10,604
Net financial income Profit before income						(1,483)
tax						9.121
Income tax expenses Net profit for the						(1,825)
year						7,296
Other segment information
Capital expenditure	1,822	312	430	8	680	3,252

	Baltic states	St. Petersburg	Poland	Spain	Discontinued operations	Total
Sales to external customers
2015	68,512	31,693	24,918	41,485	7,650	174,258
2014	69,005	40,309	23,481	47,662	13,378	193,835
2013	68,633	46,461	21,966	12,313	22,247	171,620

	Baltic states	St. Petersburg	Poland	Spain	Total
Segment non-current assets
As of 31 December 2015	44,590	2,294	13,529	5,325	65,738
As of 31 December 2014 As of 31 December 2013	51,035 30,755	3,787 3,469	13,566 11,701	4,389 3,092	72,777 49,017

1.8. ACTIVITY AND SEGMENT INFORMATION (cont'd)

Main activity indicators for the Group (continued operations):

	2015	2014	Change (%)
Area of multi-flat apartment buildings under administration (million square meters)	25.4	22.6	23.9%
Area of public. commercial building and a typical properties under administration (million square meters)	13.4	10.2	5.9%
Number of employees	5,291	5,137	3.0%
Sales for the period	166,608	181,266	(8.1%)
Sales (main activity)*	147,380	156,614	(5.9%)
Gross margin*	23.2%	21.8%	6.5%
EBITDA margin*	6.9%	7.8%	(12.9%)
EBIT margin*	4.1%	5.7%	(28.8%)
Net margin*	4.2%	3.3%	(29.0%)
Number of shares (thousand)	31,610	31,610	0.0%
Return on equity	11.2%	9.4%	19.6%
Return on assets	5.8%	4.4%	30.6%
Financial Net Debt to equity**	3.4%	12.6%	(73.1%)

* Calculated by reducing sales for the resale of utility services.

** Interest bearing debt (net of cash balance) to Shareholders' equity.

2. ACCOUNTING POLICIES

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

In the Interim Financial Statements same accounting policies and methods of computation are followed as compared with the most recent annual financial statements.

Interim Financial Statements are prepared in compliance with International Accounting Standard (IAS) 34 Interim financial reporting.

These Interim Financial Statements were authorised for issue on 29 February 2016 by responsible persons listed in the confirmation, which is attached to the Interim Financial Statements.

3. GOODWILL

	GROUP
COST:
Balance as of 1 January 2014	10,465
Additions	104
Disposals	(110)
Exchange differences	(703)
Discontinued operations	(368)
Balance as of 31 December 2014	9,388
Additions	445
Exchange differences	(118)
Balance as of 31 December 2015	9,715
IMPAIRMENT
Balance as of 1 January 2014	819
Impairment for the year	(63)
Exchange differences	(304)
Discontinued operations	(368)
Balance as of 31 December 2014	84
Balance as of 31 December 2015	84
Net book value as of 31 December 2015	9,631

Net book value as of 31 December 2014 9,304

Investments and other changes during the twelve months of the year 2015

In the 1 January 2015, the Euro was adopted as a national currency in the Republic of Lithuania so the Company's currency changed as well. The official exchange rate applied is LTL 3.4528 for EUR 1, which was irrevocably set by the European Council.

On 5 January 2015, City Service Grupa Techniczna sp. Z o.o after the process of reorganization, was incorporated into the Company Interbud Max sp. Z o.o and after this the name of Interbud Max sp. Z o.o was changed to City Service Grupa Techniczna sp. Z o.o.

On 12 February 2015, AWT Holding UAB 25 % share transfer transaction was closed. The value of transaction was EUR 3.496 mln, City Service AB investment into 25 % shares of AWT Holding UAB was EUR 1.48 mln. The share purchase agreement between the Company and BaltCap investment funds (BaltCap Private Equity Fund II L.P. and BaltCap Private Equity Fund II SCSp) was concluded on 23 December 2014. After closing, the sole shareholder of AWT Holding UAB, which controls Ecoservice group companies, is BaltCap and the Company has no shares or management rights in waste management companies in Lithuania.

On 2 March 2015, Company through a subsidiary has acquired three companies (Administracion Urbana y Rural Chorro S.L.U., Afimen administracion de finques, S.L.U., Elche administracion de fincas, S.L.U.), that manages 580 thousand sq. m. of residential facilities in Alicante province, in Spain. The companies were acquired for EUR 640 thousand.

On 16 April 2015 was completed reorganization of the companies UAB "Šiaulių būstas" and UAB "Šiaulių butų ūkis". After the process of reorganization UAB "Šiaulių butų ūkis" was incorporated into UAB "Šiaulių būstas" with all the assets, rights and obligations. UAB "Šiaulių butų ūkis" ceased operations and was deregistered. Director and contact details of UAB "Šiaulių būstas" did not change.

3. GOODWILL (cont'd)

On 30 April 2015, the Ordinary General Meeting of the Shareholders of the Company has been held. The shareholders approved the audited financial statement for the year 2014, distributed the Company's profit for the year 2014. Shareholders also approved Ernst & Young Baltic UAB, company code 110878442, as an audit company for the performance of the audit of the Company's consolidated financial statements for the year 2015 and for the evaluation of the Company's consolidated annual report. The meeting has also established the payment conditions for audit services. During the meeting the Company decided to initiate formation of the European company (SE), initiate admission of shares of the Company to trading on the regulated market the Warsaw Stock Exchange, authorize Company's board performing and signing all necessary documentation. Approve the new wording of the Articles of Association of the Company.

On 22 June 2015, Company through a subsidiary acquired two companies (UAB "Šiaulių namų valda", UAB "Apkaba"), that manages 209 thousand sq. m. of residential facilities in Šiauliai. The companies were acquired for EUR 619 thousand.

On 30 June 2015, there have been extraordinary general meeting of AB "City Service" shareholders, it was decided to merge AB "City Service" to the subsidiary City Service EU AS which operates in the Republic of Estonia.

On 1 July 2015 the amended Articles of Association of the Company were registered with the Register of Legal Persons after the increase of the authorised capital of the Company up to EUR 9,483,000. Company's shares value was increased from EUR 0.29 till EUR 0.30.

On 3 August 2015 shares of group of companies active in Stavropol were sold. Value of the share sale – purchase agreement is RUB 4 million. In financial statements of City Service group, Stavropol companies were accounted as discontinued operations.

On 10 August 2015 was completed the cross-border merger of AB "City Service" and City Service AS (former name – City Service EU AS). Following completion of the merger AB "City Service" was merged into City Service AS, which has taken over all assets, rights and liabilities of AB "City Service". AB "City Service" was dissolved without going into liquidation and City Service AS continues the activities and is the legal successor of AB "City Service", i.e. the company resulting from the merger.

On 1 September 2015 Company through a subsidiary operating in Poland acquired Famix sp. Z o.o., which manages residential facilities in Poland.

On 2 September 2015 Company through a subsidiary operating in Poland acquired SANTER Zarządzanie Nieruchomościami sp. Z o.o., which manages residential facilities in Poland.

On 16 September 2015, there have been extraordinary general meeting of City Service AS shareholders, it was approved to converse City Service AS into a European public limited-liability company (Societas Europaea or SE).

3. GOODWILL (cont'd)

On 27 October 2015, was completed conversion of City Service AS (hereinafter, the "Company") into a European public limited liability company (Societas Europaea, SE). The legal form of the Company was changed into a SE, the name of the converted company became City Service SE, which by operation of law took over all the assets, rights and liabilities of the Company.

On 6 November 2015 there have been extraordinary general meeting of City Service SE shareholders, it was decided that the shares of the Company will be delisted from trading on AB NASDAQ OMX Vilnius only on the condition that and only after the shares of the Company are admitted to trading on the Warsaw Stock Exchange.

On 12 and 13 November 2015 all the shares of the Company were registered with the Polish National Depository for Securities. The Management Board of the Warsaw Stock Exchange (hereinafter, the "WSE") resolved on to admit to exchange trading on the parallel market 31,610,000 ordinary shares of City Service SE with a par value of EUR 0.30. The first date of listing of the Company's shares on the WSE was 16 November 2015.

On 16 November 2015 Company through a subsidiary acquired UAB "Naujosios Vilnios turgavietė" which operates in marketplace administration area. The company was acquired for EUR 290 thousand.

On 12 December 2015 Company through a subsidiary operating in Russia acquired ООО «МН Групп» - a dormant company which shall be used to structure Group's activities in Russia.

On 14 December 2015 the Bank of Lithuania approved Circular of the tender offer, aimed at delisting the shares of the Company from trading on AB NASDAQ OMX Vilnius.

4. OTHER INTANGIBLE ASSETS

Movement of other intangible assets in 2015 and 2014 is presented below:

	GROUP	COMPANY
COST:
Balance as of 1 January 2014	18,790	147
Additions arising from acquisitions of subsidiaries	2,852	-
Additions	507	57
Disposals of subsidiaries	(244)	-
Disposals	(63)	-
Discontinued operations	(684)	-
Exchange differences	(1,660)	-
Retirements	(2)	-
Reclassifications	5	-
Balance as of 31 December 2014	19,501	204
Additions arising from acquisitions of subsidiaries	2,511	-
Additions	654	9
Disposals	(1)	-
Exchange differences	(261)	-
Retirements	(6)	-
Reclassifications	161	-
Balance as of 31 December 2015	22,559	213
ACCUMULATED AMORTISATION:
Balance as of 1 January 2014	3,018	5
Charge for the year	903	39
Disposals of subsidiaries	(41)	-
Disposals	(63)	-
Impairment	(74)	-
Discontinued operations	(386)	-
Exchange differences	(460)	-
Retirements	1	-
Balance as of 31 December 2014	2,898	44
Charge for the period	1,086	52
Retirements	(6)	-
Exchange differences	(67)	-
Balance as of 31 December 2015	3,911	96
Net book value as of 31 December 2015	18,648	117
Net book value as of 31 December 2014	16,603	160

5. PROPERTY, PLAND AND EQUIPMENT

Group

	Buildings	Vehicles	Other property, plant and equipment	Constru ction in progress*	Total
COST:
Balance as of 1 January 2014	9,952	4,809	8,145	122	23,028
Additions arising from acquisitions of subsidiaries	60	7	7	-	74
Additions	1,086	1,734	1,803	897	5,520
Disposals of subsidiaries	-	(235)	(438)	-	(673)
Disposals	(220)	(247)	(35)	(112)	(614)
Discontinued operations	-	(43)	(78)	-	(121)
Exchange differences	(87)	(368)	(538)	(2)	(995)
Retirements	(50)	(37)	(208)	(64)	(359)
Reclassifications	(94)	-	335	(794)	(553)
Balance as of 31 December 2014	10,647	5,620	8,993	47	25,307
Additions arising from acquisitions of subsidiaries	225	1	4	-	230
Additions	261	1,454	1,454	426	3,595
Disposals	(1,787)	(85)	(52)	-	(1,924)
Exchange differences	28	(99)	(57)	-	(128)
Retirements	-	(23)	(78)	-	(101)
Reclassifications	124	(1)	149	(433)	(161)
Balance as of 31 December 2015	9,498	6,867	10,413	40	26,818
ACCUMULATED DEPRECIATION:
Balance as of 1 January 2014	1,528	1,974	1,232	-	4,734
Charge for the year	452	976	1,135	-	2,563
Disposals of subsidiaries	-	(104)	(254)	-	(358)
Disposals	(91)	(123)	(12)	-	(226)
Discontinued operations	-	(23)	(48)	-	(71)
Exchange differences	(2)	(195)	(180)	-	(377)
Retirements	(16)	(31)	(193)	-	(240)
Reclassifications	(103)	-	-	-	(103)
Balance as of 31 December 2014	1,768	2,474	1,680	-	5,922
Charge for the period	448	1,106	1,435	-	2,989
Disposals	(358)	(56)	(45)	-	(459)
Exchange differences	1	(63)	(62)	-	(124)
Retirements	-	(15)	(71)	-	(86)
Balance as of 31 December 2015	1,859	3,446	2,937	-	8,242
Net book value as of 31 December 2015	7,639	3,421	7,476	40	18,576
Net book value as of 31 December 2014	8,879	3,146	7,313	47	19,385

* Also includes prepayments for tangible and intangible assets.

6. TRADE RECEIVABLES

Trade receivables of the Group and the Company as of 31 December 2015 and 31 December 2014 were as follows:

		GROUP	COMPANY
	Balance as of 31 December 2015	Balance as of 31 December 2014	Balance as of 31 December 2015	Balance as of 31 December 2014
Trade receivables, gross	52,277	48,033	1,150	3,241
Less: allowance for doubtful trade receivables	(6,595)	(6,548)	(229)	(221)
Trade receivables, net	45,682	41,485	921	3,020

Receivables from Vilnius City Municipality as of 31 December 2015 amounted to 13% and 24% of the Group's and the Company's trade accounts receivable, respectively (20% and 82% as of 31 December 2014, respectively).

Trade receivables and other receivables generally have 30 - 90 days payment terms.

7. BORROWINGS

Borrowings of the Group and the Company as of 31 December 2015 and 31 December 2014 were as follows:

		GROUP COMPANY
Creditor	Currency	Balance as of 31 December 2015 (in EUR)	Balance as of 31 December 2014 (in EUR)	Balance as of 31 December 2015 (in EUR)	Balance as of 31 December 2014 (in EUR)
SHORT TERM LOANS
Bank loans	EUR	2,681	2,219	-	-
Bank loans	PLN	58	-	-	-
SHORT TERM LOANS BALANCE		2,739	2,219	-	-
LONG TERM LOANS
Bank loans	EUR	16,793	19,357	14,517	16,046
Minus: long term loans of the current year		(3,738)	(2,953)	(2,096)	(2,267)
LONG TERM LOANS BALANCE		13,055	16,404	12,421	13,779

For the loans and overdraft the Company and its subsidiaries have pledged to the bank real estate and bank accounts of the Company and its subsidiaries in Lithuania. Shares of UAB "Mano Būstas" are pledged to Nordea Bank as well.

8. COST OF SALES (continued operations)

	GROUP		COMPANY
	2015	2014	2015	2014
Services of subcontractors and materials used	73,585	79,729	2,273	9,469
Wages and salaries and social security	57,304	61,721	121	139
Depreciation	1,306	922	-	-
Cost of goods sold	202	349	-	-
Other	-	4,394	-
Total cost of sales	132,397	147,115	2,394	9,608

9. GENERAL AND ADMINISTRATIVE EXPENSES (continued operations)

	GROUP		COMPANY
	2015	2014	2015	2014
Wages and salaries and social security	15,491	13,237	1,094	1,207
Depreciation and amortisation	2,745	2,442	161	122
Consulting and similar expenses	1,311	938	367	227
Rent of premises and other assets	933	725	80	70
Allowance for and write-off of receivables	846	778	15	1,184
Taxes other than income tax	771	723	10	5
Commissions for collection of payments	661	631	22	14
Advertising	565	654	45	74
Computer software maintenance	553	430	5	5
Consulting and tax expenses related with acquisitions, disposals and reorganisation	432	356	142	303
Business trips and training	431	413	92	125
Fuel expenses	399	554	29	41
Transportation	375	399	25	25
Representational costs	365	356	26	21
Insurance	362	373	20	23
Communication expenses	331	331	15	31
Utilities	200	247	24	22
Bank payments	147	134	2	3
Charity and support	44	25	1	-
Other	1,527	2,374	(63)	81
Total general and administrative expenses	28,489	26,120	2,112	3,583

10. OTHER OPERATING INCOME (EXPENSES), NET (continued operations)

	GROUP		COMPANY
	2015	2014	2015	2014
Income from rent, net	232	267	259	260
Gain (loss) on disposal of property, plant and equipment	9	(81)	6	(6)
Depreciation of rented assets	(75)	(36)	-	-
Gain from bargain purchase	-	497	-	-
Other income (expenses), net	84	236	(174)	(172)
Total other operating activity	250	883	91	82

11. FINANCE INCOME AND (EXPENSES), NET (continued operations)

	GROUP		COMPANY
	2015	2014	2015	2014
Interest income	1.284	190	1,332	631
Dividend income	10	10	9,510	5,120
Foreign currency exchange gain	-	-	-	2
Gain on sale of investments	1,434	436	2,114	701
Share of profit of associates	67	566	-	-
Other financial income	54	166	-	-
Total finance income	2,849	1,368	12,956	6,454
Interest (expenses)	(938)	(971)	(556)	(646)
Foreign currency exchange loss	(92)	(1,122)	(376)	-
Loss on sale of investments	-	(1,196)	-	(794)
Other financial (expenses)	(75)	(61)	-	-
Total finance (expenses)	(1,105)	(3,350)	(932)	(1,440)
Financial activity, net	1,744	(1,982)	12,024	5,014

12. DIVIDENDS PER SHARE

	2015	2014
Approved dividends	948	1,163
Number of shares (in thousand)	31,610	31,610
Approved dividends per share	0.03	0.04

13. RELATED PARTY TRANSACTIONS

The parties are considered related when one party has the possibility to control the other one or have significant influence over the other party in making financial and operating decisions. The related parties of the Group and the Company are considered the following:

• − Global energy consulting OU (Estonia)– the ultimate shareholder of the Company since 2013;
• − UAB ICOR the shareholder of the Company;
• − Subsidiaries of UAB ICOR (same ultimate controlling shareholder);
• − Subsidiaries of City Service SE (for the list of the subsidiaries, see also Note 1);
• − Mr J. Janukėnas, V. Turonis, E. Paulauskas, V. Junevičius, J. Šimkevičius, R. Jakubauskas, A. Górecka Kolasa, F. López Abril (Management of the Company);

Transactions with related parties include sales and purchases of goods and services in the ordinary course of business, and acquisitions and disposals of property, plant and equipment. Property, plant and equipment to related parties during the twelve months of 2015 was sold for the net book value.

The sales price for the intercompany subsidiary purchase and sale transactions are established by the management and shareholders of the UAB ICOR and/or Global energy consulting OU and City Service SE considering the results of independent valuations, if any, undertaken for the purposes of the transfer pricing regulations – which may not always be at their fair value.

There are no guarantees or pledges given or received in respect of the related party payables and receivables. Related party receivables and payables are expected to be settled in cash or set-off against payables / receivables to / from a respective related party.

2015 GROUP	Purchases	Sales	Receivables and prepayments	Loans granted	Payables (long and short-term)
UAB ICOR Subsidiaries of UAB ICOR:	506	9	-	-	551
AB Axis Industries	654	436	18	-	246
Other subsidiaries of UAB ICOR	42	477	81	-	10
Associates and other related parties*	327	45	7	-	14
Total	1,529	967	106	-	821

* Includes purchases and sales related with AWT Holding group.

14. SUBSEQUENT EVENTS

On 11 Janurary 2016 the Company received the notification from its shareholder UAB "ICOR" on the transaction in issuer's securities. UAB "ICOR" owns 26,813,293 ordinary shares of the Company, which provides 84.83% of the authorized capital and voting rights.

On 9 February 2016 was finished reorganization of UAB "Žaidas". Method of reorganisation was separation. After separation of property, rights and responsibilities were estabilshed two new companies UAB "Alytaus būstas" and UAB "Alytaus namų valda". After reaorganization the title of Uždaroji akcinė bendrovė "Žaidas" was changed into UAB "Kauno centro būstas".

On 15 February 2016 the Board of AB Nasdaq Vilnius decided to satisfy the request of the Company and to delist its shares (ISIN code: EE3100126368, ticker CTS1L) from trading on AB Nasdaq Vilnius. The shares of the Company will be removed on April 30, 2016 (the last trading day on the Baltic Main list of City Service SE shares will be on April 29, 2016). Following delisting of shares of the Company from trading on AB Nasdaq Vilnius, they will further be listed and it will be able to trade in them on the Warsaw Stock Exchange.

City Service SE

Narva mnt. 5, 10117, Tallinn, the Republic of Estonia; address in Lithuania: Gynėjų str. 16, LT – 01109 Vilnius, Phone (+370 5) 2394900, fax (+370 5) 2394848, E-mail. info@cityservice.eu www.cityservice.eu

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Consolidated interim financial statements for the twelve months period ended 31 December, 2015