Panevezio Statybos Trestas

Annual / Quarterly Financial Statement • Apr 25, 2013

AB Panevėžio Statybos Trestas

Separate financial statements for the year 2012

Contents

Company details	1
Independent Auditor's Report	2
Confirmation of the Company's responsible employees	4
Separate statement of financial position	5
Separate statement of comprehensive income	7
Separate statement of changes in equity	8
Separate statement of cash flows	9
Notes	10
Annual report	41
Supplement re compliance	67

AB Panevėžio Statybos Trestas Separate financial statements

Company details

AB Panevėžio Statybos Trestas

Entity's code:	147732969
Telephone:	+370 45 505 503
Telefax:	+370 45 505 520
Address:	P. Puzino 1, LT-35173 Panevėžys

Board

Remigijus Juodviršis, Chairman Artūras Bučas Gvidas Drobužas Irma Abromavičienė Vilius Gražys

Management

Dalius Gesevičius, Managing Director

Auditor

KPMG Baltics, UAB

Banks

AB DNB Bankas AB SEB Bankas AS UniCredit Bank Lithuania Branch Swedbank, AB AB Šiaulių Bankas

KPMG Baltics, UAB Upės St. 21 LT-08128. Vilnius I ithuania

+370 5 2102600 Phone: +370 5 2102659 Fax· vilnius@kpmg.lt F-mail: Website: www.kpmg.lt

Independent Auditor's Report

To the Shareholders of AB Panevėžio Statybos Trestas

Report on the Financial Statements

We have audited the accompanying separate financial statements of AB Panevėžio Statybos Trestas ("the Company"), which comprise the separate statement of financial position as at 31 December 2012, the separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information, as set out on pages 5-40.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the separate financial statements give a true and fair view of the unconsolidated financial position of AB Panevežio Statybos Trestas as at 31 December 2012, and of its unconsolidated financial performance and its unconsolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Report on Other Legal and Regulatory Requirements

Furthermore, we have read the annual report of AB Panevežio Statybos Trestas for the year ended 31 December 2012, set out on pages 41-66 of the financial statements, and have not identified any material inconsistencies between the financial information included in the annual report and the financial statements of AB Panevežio Statybos Trestas for the year ended 31 December 2012.

On behalf of KPMG Baltics, UAB

Domantas Dabulis

Parther pp Certified Auditor

Vilnius, Republic of Lithuania 28 March 2013

Confirmation of the Company's responsible employees

To: Supervisory Service BANK OF LITHUANIA Žirmūnų St 151, LT-09128 Vilnius

Vilnius Stock Exchange Konstitucijos 7, 15fl, LT-08105 Vilnius

This confirmation of responsible employees of AB Panevežio Statybos Trestas concerning the audited separate financial statements and the annual report for the year 2012 is presented in accordance with the Law on Securities of the Republic of Lithuania (Official Gazette, 2077, No. 17-626; 2011, No. 145-6819) and with Regulations for Preparation and Presentation of Periodic and Additional Information approved by Resolution of the Board of the Bank of Lithuania No. 03-48 (Official Gazette, 2013, No. 25-1255).

We confirm that, as to our knowledge, the presented separate financial statements, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, the financial position and the result of AB Panevežio Statybos Trestas. The annual report fairly states the review of business development and activities, the Company's position and the description of main risks and uncertainties.

AB Panevėžio Statybos Trestas Managing Director Dalius Gesevičius

Bereus

AB Panevėžio Statybos Trestas Finance Director Dalè Bernotaitienė

Approved on
Minutes No.

Separate statement of financial position

as at 31 December

In Litas

	Note	2012	2011
ASSETS
Non-current assets
Property, plant and equipment	13	15,057,724	17,340,459
Intangible assets	14	189,483	21,105
Investments in subsidiaries	15	33,442,031	33,442,031
Loans granted	16	13,156,728	15,235,649
Other financial assets	17	0	4,419,048
Other assets		102,089	326,731
Deferred tax assets	12	413,621	473.491
Total non-current assets		62,361,676	71,258,514
Current assets
Inventories	18	9,022,609	9,769,019
Trade receivables	19	75,698,974	60,206,979
Prepayments		10,466,093	6,245,330
Loans granted	20	20,164,102	13,787,352
Other financial assets	21	3,677,048	2,027,787
Other assets		117,740	155,930
Advance income tax		1,158,518	1,462,686
Cash and cash equivalents	22	17,892,250	43,686,824
Total current assets		138,197,334	137,341,907
TOTAL ASSETS		200,559,010	208,600,421

The notes on pages 10-40 are an integral part of these financial statements.

Managing Director	Dalius Gesevičius
Chief Accountant	Danguolė Širvinskienė

28/03/2013 28/03/2013 €

Approved on Minutes No.

Separate statement of financial position (continued)

as at 31 December

In Litas

	Note	2012	2011
EQUITY AND LIABILITIES
Equity
Share capital	23	16,350,000	16,350,000
Reserves	23	6,963,400	7,553,805
Retained earnings		108,555,020	106,530,889
Total equity		131,868,420	130,434,694
Non-current liabilities
Loans and other financial borrowings	25	0	537,785
Warranty provision	26	1,195,432	1,060,670
Deferred tax liabilities	12	940,301	1,044,490
Total non-current liabilities		2,135,735	2,642,945
Current liabilities
Loans and other financial borrowings	રેને	539,517	1,582,227
Trade payables		42,547,398	35,536,154
Prepayments received		2,624,945	16,523,170
Current tax payable		19,858	2,060,324
Other liabilities	27	20,823,139	19,820,907
Total current liabilities		66,554,857	75,522,782
Total liabilities		68,690,590	78,165,727
TOTAL EQUITY AND LIABILITIES		200,559,010	208,600,421

The notes on pages 10-40 are an integral part of these financial statements.

Managing Director Dalius Gesevičius

Chief Accountant Danguolė Širvinskienė

28/03/2013 28/03/20 N

Approved on Minutes No.

Separate statement of comprehensive income

for the year ended 31 December

In Litas

5 6	262,847,052 (247,430,383)	218,714,318 (204,115,184)
	15,416,669	14,599,134
10	980,420	890,500
7	(325,262)	(337,271)
8	(13,660,547)	(10,108,699)
10	(1,055,107)	(1,050,844)
	1,356,173	3,992,820
11	1,521,124	1,679,655
11	(565,381)	(1,105,938)
12	2,311,916	4,566,537 (2,970,595)
	1,448,149	1,595,942
	(14,423)	(3,064,499)
	0	459,675
	1,433,726	(2,604,824)
	1,433,726	(1,008,882)
24	0.09	0.10
		(863,767)

The notes on pages 10-40 are an integral part of these financial statements.

Managing Director	Dalius Gesevičius
Chief Accountant	Danguolė Širvinskienė

28/03/2013 28/03/2013

AB Panevėžio Statybos Trestas Separate financial statements

Address: P. Puzino 1, LT-35173 Panevėžys Entity's code: 147732969

Approved on Minutes No.

Separate statement of changes in equity

In Litas			Compulsory	Revaluation
	Notes Share capital		reserve	reserve	Retained earnings	Total equity
Balance as at 31 December 2010		16,350,000	1.635.030	9.119.597	105,483,449	132,588.076
Total comprehensive income for the year
Net profit (loss)					1,595,942	1,595,942
Total other comprehensive income				(3,200,822)	595.998	(2,604,824)
year Total comprehensive income for the				3,200,822	2,191,940	1,008,882)
Contributions by and distributions to owners of
the Company
Dividends to owners of the Company					1,144,500)	1,144,500)
Total contributions by and distributions to owners
of the Company					1,144,500)	1,144,500)
Balance as at 31 December 2011		16,350,000	1.635.030	5,918,775	106,530,889	130,434,694
Total comprehensive income for the year
Net profit (loss)					1,448,149	1.448.149
l otal other comprehensive income				(590,405)	575,982	14,423
vear Total comprehensive income for the				(590.405)	2,024,131	.433,726
Contributions by and distributions to owners of
the Company
Dividends to owners of the Company
Total contributions by and distributions to owners
of the Company
Balance as at 31 December 2012		16,350,000	1,635,030	5,328,370	108.555.020	131,868,420

The notes on pages 10-40 are an integral part of these financial statements.

Dalīus Gesevicius	Danguolė Sirvinskienė
lanaging Director	Chief Accountant

28/03/2013 28/03/2013

8

Approved on
Minutes No.

Separate statement of cash flows

for the year ended 31 December

In Litas

	Note	2012	2011
Cash flow from operating activities
Net profit		1,448,149	1,595,942
Adjustments for:
Depreciation and amortization		3,846,816	4,865,840
Revaluation of property, plant and equipment		0	387,147
Result from disposal of property, plant and equipment		(74,263)	(107,904)
Income tax expense		863,767	2,970,595
Other non-cash items		1,572,649	(4,328,910)
		7,657,118	5,382,710
Change in long-term receivables		(173,213)	(123,540)
Change in inventories		610,107	(6,830,118)
Change in trade receivables		(16,970,649)	(21,302,652)
Change in prepayments		(4,220,763)	(5,389,144)
Change in other assets		2,065,977	(2,269,737)
Change in trade payables		7,011,244	16,709,942
Change in prepayments received		(13,898,225)	2,415,450
Change in other liabilities		2,823,633	5,740,302
		(15,094,771)	(5,666,787)
Income tax paid		(4,286,703)	(1,736,597)
Net cash flows from operating activities		(19,381,474)	(7,403,384)
Cash flows from investing activities
Acquisition of property, plant and equipment and software		(1,727,367)	(1,750,182)
Disposal of property, plant and equipment		83,513	174,583
Acquisition of investments		(500)	0
Loans granted		(19,111,601)	(28,260,616)
Loans recovered		15,995,316	18,863,547
Change in term deposits		0	23,310,915
Dividends and interest received		380,349	1,619,308
Net cash flows from investing activities		(4,380,290)	13,957,555
Cash flows from financing activities
		(15,067)	(1,174,445)
Payment of finance lease liabilities		(1,580,495) (437,248)	(2,161,267) (379,155)
		(2,032,810)	(3,714,867)
Dividends paid Interest paid Net cash flows from financing activities
Net increase (decrease) in cash and cash equivalents		(25,794,574)	2,839,304
Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December		43,686,824 17,892,250	40,847,520 43,686,824

The notes on pages 10-40 are an integral part of these financial statements.

Dalius Gesevičius Managing Director

Danguolė Širvinskienė Chief Accountant

28/03/2013 | 28/03/2013

Notes

1. Reporting entity

AB Panevėžio Statybos Trestas (hereinafter "the Company") was established in 1957. The entity's code is 147732969 and it is registered at P. Puzino 1, LT-35173 Panevežys. The ordinary registered shares of the Company have been on the Official Trading List of the Vilnius Stock Exchange (VSE) since 13 July 2006. The Company primarily is involved in construction of buildings, plant, equipment as well as other facilities and networks, etc. in Lithuania and abroad. The Company employed 885 employees as at 31 December 2012 (1,006 employees as at 31 December 2011).

The Company has the following branches in Lithuania: Genranga, Gerbūsta, Pastatų Apdaila and Klaipstata. The Company also has a branch in Kaliningrad, Russia. Besides, the Company has a representative office in Cherepovets, Russia, and permanent establishments in the United Kingdom of Great Britain and Northern Ireland, and Kingdom of Sweden.

The main shareholders of the Company are:

• · AB Panevėžio Keliai (49.78%);
• · SWEDBANK AS (Estonia) clients (6.04%);
• · Freely negotiable shares (44.18%).

These financial statements are the Company's separate financial statements. The Company also prepares consolidated financial statements for the Company and its subsidiaries. Details of subsidiary companies are disclosed in Note 15.

The shareholders of the Company have a statutory right to either approve these financial statements or not approve them and require Management to prepare a new set of financial statements.

2. Basis of preparation

Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (hereinafter IFRSs).

Basis of measurement

The financial statements have been prepared on the historical cost basis except for land and buildings which are presented at revalued amounts.

Functional and presentation currency

The financial statements are presented in the national currency Litas, which is the Company's functional currency.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Use of estimates and judgments (continued)

Information about significant areas of estimation uncertainty and critical judgement in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

• · Note 12 deferred taxes recognition;
• Note 13 fair value of land and buildings, useful lives of property, plant and equipment;
• · Note 15 measurement of recoverable amounts of investments;
• · Note 19 impairment of trade receivables, construction contract revenue;
• Note 25 classification of leases;
• · Note 26 measurement of warranty provision.

3. Significant accounting policies

Foreign currency

Transactions in foreign currencies are translated to the functional currency at exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate ruling at that date. The foreign currency gain or loss on monetary items is recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the fair value was determined. Non-monetary assets and liabilities denominated in foreign currencies that are measured at cost are translated to the functional currency at the exchange rate at the date that the asset or liability is recognized in statement of financial position. Foreign currency differences arising on translation are recognized in profit or loss.

Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. The Company has no held-tomaturity investments, available-for-sale financial assets and financial assets at fair value through profit or loss.

Cash and cash equivalents comprise cash balances and call deposits.

Non-derivative financial instruments are recognized initially at fair value plus (except for instruments stated at fair value through profit or loss) any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

Financial instruments are recognized on the trade date. Financial assets are derecognized if the contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognized if they expire or are discharged or cancelled.

Non-derivative financial instruments (continued)

Loans and receivables are non-derivative financial assets and are not quoted in an active market. They are included into current assets except for maturities greater than 12 months. Loans and receivables are subsequently measured at amortized cost using the effective interest rate method, less impairment losses, if any. Current receivables are not discounted.

Loans and borrowings and other financial liabilities, including trade payables, are subsequently stated at amortized cost using the effective interest rate method. Current liabilities are not discounted.

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income and expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Derivative financial instruments

The Company has no derivative financial instruments.

Property, plant and equipment

Items of property, plant and equipment except for land and buildings are measured at cost less accumulated depreciation and accumulated impairment losses. Land and buildings are carried at revalued amount which is their fair value as at the revaluation date less subsequently accumulated depreciation and impairment. Revaluations are carried out regularly ensuring that the carrying amount of buildings does not sigmificantly differ from their fair values as at reporting date. The fair value of buildings is established by certified independent real estate valuers. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The revaluation reserve of buildings is reduced by an equivalent amount of annual depreciation charged on revalued buildings each year and is transferred directly to retained earnings.

In case of revaluation, when the estimated fair value of the assets exceeds their carrying value, the carrying value is increased to the fair value and the amount of increase is included into revaluation reserve of property, plant and equipment as other comprehensive income in equity. However, such increase in revaluation is recognized as income to the extent it does not exceed the decrease of previous revaluation recognized in profit or loss. Depreciation is calculated from the depreciable amount which is equal to acquisition cost less residual value of an asset.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Borrowing costs related to qualifying assets are capitalized.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

Property, plant and equipment (continued)

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.

The estimated useful lives of the assets are the following:

· Buildings	8-40 years
· Plant and equipment	5-10 years
· Vehicles	5-10 years
· Fixtures and fittings	3-6 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Gains and losses on disposal are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

Intangible assets

Software and other intangible assets, which have finite useful lives, are measured at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life is 3 years.

Leased assets

Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the leased assets are not recognized on the Company's statement of financial position.

Investments in subsidiaries

Investments in subsidiaries are accounted for at cost less impairment.

Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Construction work in progress

Construction work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognized to date less progress billings and recognized losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Company's contract activities based on normal operating capacity.

Construction work in progress (continued)

Construction work in progress is presented as part of trade receivables in the statement of financial position. If payments received from customers exceed the income recognized, then the difference is presented as deferred income in the statement of financial position.

Impairment of financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and of allocating interest income and expense over the relevant period.

Impairment loss is recognized in profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, the reversal is recognized in profit or loss.

Impairment of non-financial assets

The carrying amounts of non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

The recoverable amount is the greater of the asset's value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cashgenerating unit).

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Dividends

Dividends are recognized as a liability in the period in which they are declared.

Provisions

A provision is recognized in the statement of financial position if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions (continued)

A provision for warranties is recognized when the underlying construction services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Employee benefits

The Company does not have any defined contribution and benefit plans and has no share based payment schemes. Post employment obligations to employees retired on pension are borne by the State.

Short-term employee benefits are recognized as a current expense in the period when employees render the services. These include salaries and wages, social security contributions, bonuses, paid holidays and other benefits. There are no long-term employee benefits.

Revenue

Construction contract revenue includes the initial amount agreed in the contract plus any variations in contract work and other payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognized in proportion to the stage of completion of the contract. The stage of completion is assessed by proportion of actual cost incurred and the budgeted cost of construction contract.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognized immediately in profit or loss.

Finance income and expenses

Finance income comprises interest income and dividend income. Interest income is recognized as it accrues, using the effective interest method. Dividend income is recognized on the date that the Company's right to receive payment is established. Finance expenses comprise interest expense and impairment losses recognized on financial assets. All borrowing costs are recognized using the effective interest method. Foreign currency gains and losses are reported on a net basis in profit or loss.

Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax is recognized, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, such as convertible notes and share options granted to employees.

The Company has no dilutive potential ordinary shares. The diluted earnings per share are the same as the basic earnings per share.

Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. An operating segment's operating results are reviewed regularly by management of the Company to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to management include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Information about geographical segments is provided in the financial statements. In 2012 the Company has three segments identified: Lithuania, Russia and Kingdom of Sweden (2011: Lithuania, Russia and United Kingdom).

Standards, interpretations and amendments to published standards that are not yet effective

The accounting policies applied by the Company to all financial information reported in these financial statements are consistent with the accounting policies of the previous year. New IFRS and their interpretations which became effective in 2012 had no effect on the Company's financial statements.

Approved, but not yet effective standards and interpretations

New and revised International Financial Reporting Standards and interpretations have been issued, which will be effective for financial reporting periods starting from 1 January 2013 or later. The Company has decided not to early adopt the new standards and interpretations. Estimates of the possible effect of the new and revised standards applied for the first time, as presented by the Company's management, are stated below.

· Amendments to IFRS 7 and IAS 32 on Offsetting Financial Assets and Financial Liabilities

Amendments to IFRS 7 Disclosures (effective for annual periods beginning on or after 1 January 2013; to be applied retrospectively) contain new disclosure requirements for financial assets and liabilities that are offset in the statement of financial position or subject to master netting arrangements or similar agreements.

Amendments to IAS 32 (effective for annual periods beginning on or after 1 January 2014; to be applied retrospectively) clarify that an entity currently has a legally enforceable right to set-off if that right is not contingent on a future event and enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all counterparties. The Company does not expect the Amendments to have a significant impact on the financial statements, as it has not entered into master netting or similar arrangements.

Approved, but not yet effective standards and interpretations (continued)

• · IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after 1 January 2014; to be applied retrospectively). IFRS 10 provides a single model to be applied in the control analysis for all investees, including entities that currently are SPEs in the scope of SIC-12. IFRS 10 introduces new requirements to assess control that are different from the existing requirements in IAS 27 (2008). Under the new single control model, an investor controls an investee when:
  • (1) it is exposed or has rights to variable returns from its involvements with the investee;
  • (2) it has the ability to affect those returns through its power over that investee; and
  • (3) there is a link between power and returns.

The new IFRS 10 also includes the disclosure requirements and the requirements relating to the preparation of consolidated financial statements.

Under the new IFRS 11, joint arrangements are divided into two types, each having its own accounting model defined as follows:

• · a joint operation is one whereby the jointly controlling parties, known as the joint operators, have rights to the assets, and obligations for the liabilities, relating to the arrangement.
• · a joint venture is one whereby the jointly controlling parties, known as joint venturers, have rights to the net assets of the arrangement.

IFRS 11 effectively carves out from IAS 31 jointly controlled entities those cases in which, although there is a separate vehicle for the joint arrangement, separation is ineffective in certain ways. These arrangements are treated similarly to jointly controlled assets/operations under IAS 31, and are now called joint operations. IFRS 11 eliminates the free choice of equity accounting or proportionate consolidation; the equity method must always be used in financial statements.

IFRS 12 requires additional disclosures relating to significant judgements and assumptions made in determining the nature of interests in an entity or arrangement, interests in subsidiaries, joint arrangements and associates and unconsolidated structured entities.

The impact of the initial application of the new standards will depend on the specific facts and circumstances of the investees and joint arrangements of the Company held at the date of initial application. Therefore, it is not practicable to prepare an analysis of the impact the standards will have on the financial statements until the date of the application.

· IFRS 13 Fair Value Measurement (effective prospectively for annual periods beginning on or after 1 January 2013). IFRS 13 replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance. It defines fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements. IFRS 13 explains 'how' to measure fair value when it is required or permitted by other IFRSs. The Company does not expect IFRS 13 to have a material impact on the financial statements since management considers the methods and assumptions currently used to measure the fair value of assets to be consistent with IFRS 13 in material terms.

Approved, but not yet effective standards and interpretations (continued)

• · Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income (effective for annual periods beginning on or after 1 July 2012; to be applied retrospectively). The amendments:
  • · require that an entity presents separately the items of other comprehensive income that may be reclassified to profit or loss in the future from those that would never be reclassified to profit or loss. If items of other comprehensive income are presented before related tax effects, then the aggregated tax amount should be allocated between these sections;
  • · change the title of the Statement of Comprehensive Income to Statement of Profit or Loss and Other Comprehensive Income, however, other titles are also allowed to be used.

The impact of the initial application of the amendments will depend on the specific items of other comprehensive income at the date of initial application.

• · Amendments to IAS 12: Deferred Tax: Recovery of Underlying Assets (effective for annual periods beginning on or after 1 January 2013; to be applied retrospectively). The amendments introduce a rebuttable presumption that the carrying value of investment property measured using the fair value model would be recovered entirely by sale. Management's intention would not be relevant unless the investment property is depreciable and held within a business model whose objective is to consume substantially all of the asset's economic benefits over the life of the asset. This is the only instance in which the presumption can be rebutted. The amendments are not relevant to the Company's financial statements, since the Company does not have any investment property.
• · IAS 19 (2011) Employee Benefits (effective for annual periods beginning on or after 1 January 2013; to be applied retrospectively. Transitional provisions apply). The amendment requires actuarial gains and losses to be recognised immediately in other comprehensive income. The amendment removes the corridor method previously applicable to recognising actuarial gains and losses, and eliminates the ability for entities to recognise all changes in the defined benefit obligation and in plan assets in profit or loss, which currently is allowed under the requirements of IAS 19. The amendment also requires the expected return on plan assets recognised in profit or loss to be calculated based on rate used to discount the defined benefit obligation. The amendments are not relevant to the Company's financial statements, since the Company does not have any defined benefit plans.
• · IAS 27 (2011) Separate Financial Statements (effective for annual periods beginning on or after 1 January 2014) introduces minor clarifications. The Standard no longer addresses the principle of control and requirements relating to the preparation of consolidated financial statements, which have been incorporated into IFRS 10, Consolidated Financial Statements. The Company does not expect IAS 27 (2011) to have a material impact on the financial statements, since it does not result in a change in the Company's accounting policy.

Approved, but not yet effective standards and interpretations (continued)

• · IAS 28 (2011) Investments in Associates and Joint Ventures (effective for annual periods beginning on or after 1 January 2014; to be applied retrospectively). There are limited amendments made to IAS 28 (2008):
  • Associates and joint ventures held for sale. IFRS 5, Non-current Assets Held for Sale and Discontinued Operations applies to an investment, or a portion of an investment, in an associate or a joint venture that meets the criteria to be classified as held for sale. For any retained portion of the investment that has not been classified as held for sale, the equity method is applied until disposal of the portion held for sale. After disposal, any retained interest is accounted for using the equity method if the retained interest continues to be an associate or a joint venture.
  • · Changes in interests held in associates and joint ventures. Previously, IAS 28 (2008) and IAS 31 specified that the cessation of significant influence or joint control triggered remeasurement of any retained stake in all cases, even if significant influence was succeeded by joint control. IAS 28 (2011) now requires that in such scenarios the retained interest in the investment is not remeasured.

The Company does not expect the amendments to Standard to have material impact on the financial statements since the Company does not have any investments in associates or joint ventures that will be impacted by the amendments.

4. Financial risk management

Overview

The Company has exposure to the following risks: credit risk, liquidity risk and market risk. This note presents information about the Company's exposure to each of these risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations, and arises principally from the Company's receivables from customers.

The Company controls credit risk by credit policies and procedures. The Company has established a credit policy under which each new customer is analyzed for creditworthiness before the standard payment terms and conditions are offered. Customers that fail to meet the benchmark creditworthiness may transact with the Company only on a prepayment basis.

The maximum exposure to credit risk can be specified as follows:

2012
75,698,974	60,206,979
33,320,830	29,023,001
3,677,048	6.446.835
17,892,250	43,686,824
130,589,102	139,363,639
2012	2011
9,632,335	4,373,724
66,066,639	55,833,255
75,698,974	60,206,979

Credit risk (continued)

The largest credit risk related to trade receivables according to customers as at the reporting date:

(in Litas)	2012	0/0	2011	0/0
Client l	12,695,421	16.8	11,235,116	18.7
Client 2	12,145,579	16.0	11,104,430	18.4
Client 3	10,480,737	13.8	9,642,244	16.0
Client 4	8.043.448	10.6	5.100.270	8.5
Client 5	6,225,240	8.2	3,395,898	5.6
Client 6	4,102,311	5.4	3,306,219	5.5
Client 7	3,387,005	4.5	3,049,643	5.1
Other clients	29,781,219	39.4	23,056,492	38.3
Impairment	(11,161,986)	(14.7)	(9,683,333)	(16.1)
Total	75,698,974	100	60,206,979	100

Trade receivables according to geographic regions:

(in Litas)	2012	2011
Local market (Lithuania)	64,590,653	57,598,286
Russia	10,585,539	2,608,693
Sweden	522,782
Total	75,698,974	60,206,979

Ageing of trade receivables as at the reporting date can be specified as follows:

(in Litas)	2012	Impairment	2011	Impairment
Not overdue	60.051.366		41,962,264
Overdue 0-30 days	4,752,204		7,516,834
Overdue 30-90 days	540,562		2,613,680
More than 90 days	21,516,828	11,161,986	17,797,534	9,683,333
Total	86,860,960	11,161,986	69,890,312	9,683,333

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Methodology used for establishing the allowance is reviewed regularly to reduce any differences between loss estimate and actual loss experience.

Issued loans are receivable from the related parties and are not overdue as at 31 December 2012.

Cash and cash equivalents comprise cash on hand and at bank; therefore, the related credit risk is minimum.

Current and non-current other financial assets include term deposits at banks and cash at bank, as a guarantee.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected operating expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Payment terms of liabilities as at 31 December 2012, including calculated interest, as to the agreements, are presented below:

	Carrying	Contractual	6 months	6-12
In thousand Litas	value	net cash flows	or less	months	1-2 years	2-5 years
Liabilities
Loans and other financial
borrowings	539.517	550,210	171,716	378,494
Trade creditors	42.547.398	42,547,398 42,547,398
Total	43,086,915		43,097,608 42,719,114	378,494

Payment terms of liabilities as at 31 December 2011, including calculated interest, as to the agreements, are presented below:

	Carrying	Contractual	6 months or	6-12
(in Litas)	value	net cash flows	less	months	1-2 years	2-5 years
Liabilities
Loans and other financial
borrowings	2,120,012	2,204,558	934,337	721.743	548,478
Trade creditors	35,536,154		35,536,154 35,536,154
Total	37,656,166	37,740,712 36,470,491		721,743	548,478

Interest rate applied for calculation of contractual net cash flows:

	2012
Loans and other financial borrowings	1.24% - 2.51%
	2011
Loans and other financial borrowings	1.78%-2.73%

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the results of the Company or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Currency risk. The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency Litas. The Company does not use any financial instruments to manage its exposure to foreign exchange risk.

Market risk (continued)

During the year, currency exchange rates in respect of Litas were as follows:

	31 December		31 December
	2012	Average 2012	2011	Average 2011
1 POR =	3.4528	3.4528	3.4528	3.4528
1 GBP =	4.2015	4.2565	4.1310	3.9780
1 SEK =	0.4004	0.3967	0.3860	0.3824
1 USD =	2.6060	2.6867	2.6694	2.4817
1 RUB =	0.0859	0.0865	0.0833	0.0845

The Company's exposure to foreign currency risk can be specified as follows:

Year 2012 (Litas)	LTL	EI IR	ROB	USD	GBP	SEK
Non-current loans granted Trade receivables Current loans granted Current and non-current other	13,156,728 64,583,946 9,423,015	6,707	10,585,539 10,741,087			522,782
financial assets Cash and cash equivalents Loans and other financial	3,677,048 13,193,138	546,473	3,416,369	27,473	124,092	584,705
borrowings	(13,213)	(526,304)
Trade payables	(40,227,221)	(923,043)	(1,105,339)			(291,795)
Total exposure	63,793,441	(896,167)	23,637,656	27,473	124,092	815,692
Year 2011 (Litas)	LTL	EUR	RUB	USD	GBP	SEK
Non-current loans granted	15,235,649
Trade receivables	54,290,858	3,307,428	2,608,693
Current loans granted Current and non-current other	5,903,956		7,883,396
financial assets	6,446,835
Cash and cash equivalents Loans and other financial	27,545,244	7,514,082	8,483,084	21,836	122,578
borrowings		(2,120,012)
Trade payables	(32,462,363)	(204,384)	(2,868,044)		(1,363)
Total exposure	76,960,179	8,497,114	16,107,129	21,836	121,215	0

The functional currency of the Company is Litas. The Company faces foreign currency risk on purchases and payable amounts as well as on sales and amounts receivable that are denominated in currencies other than Litas and EUR. The risk related to transactions in EUR is considered to be insignificant as the Lithuanian Litas is pegged to EUR at a fixed rate.

With a decrease in the currency exchange rate of the Russian rouble by 0.005 points, the Company's profit would decrease by approximately 1,339 thousand Litas.

Interest rate risk. The Company's issued loans and borrowings are subject to variable interest rates linked to EURIBOR and VILIBOR. No financial instruments are used to manage the risk. Taking into consideration the current level of issued and received loans, the change of interest rate would not have a material effect.

Market risk (continued)

Variable interest rate financial assets and liabilities were as follows:

	Currency	2012
lssued non-current loans	ITT.	13,156,728
Issued current loans	LTL	9,423,015
Finance lease liabilities	BOR	(539,517)
Total		22,040,226

With an increase in the interest rate by 0.5 per cent, the Company's profit would increase by approximately 110 thousand Litas.

Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital and proposes the level of dividends to ordinary shareholders based on the Company's financial results and strategic plans.

Operating risk management

The main operating risks of the Company include competition with other construction and contracting companies in the operating markets of the Company, reliability of subcontractors and other business partners, management of production capacities as well as attraction and retaining of experienced and qualified employees. Key management of the Company controls establishment of processes and procedures that mitigate the risks.

The Company's management ensures that its employees have appropriate expertise, experience and the latest knowledge to carry out the duties entrusted to them. The Company sends employees to training courses and organises internal training. The Company has internal controls in place to ensure the four-eye principle, where results of the person carrying out an operation are checked by another controller, by authorising the operation. The Company hires an external auditor for investigation of efficiency of internal processes; and schedules for audit of internal processes are being made by the internal auditor, and, as to recommendations received, processes are being reviewed and internal controls are strengthened. Also, the Company's Board and management meet regularly to discuss the matters related to performance of the Company, identification of operating risks as well as creation of plans for mitigation and elimination of the risks.

TT ..

Segments 5.

Lithuania	Russia	Ningdom of Sweden	Total
224,100,885	35,011,912	3,734,255	262,847,052
(213,111,814)	(30,561,002)	(3,757,567)	(247,430,383)
975,470	4,950	0	980,420
(8,811,969)	(1,337,907)	(96,655)	(10,246,531)
(1,055,107)	0	0	(1,055,107)
107,538	0	0	107,538
(3,734,728)	(107,160)	(4,928)	(3,846,816)
(1,529,725)	3,010,793	(124,895)	1,356,173
929,826	591,298	0	1,521,124
(190,188)	(343,980)	(31,213)	(565,381)
44,320	(908,087)	0	(863,767)
(745,767)	2,350,024	(156,108)	1,448,149

Segment assets

Year 2012 (in Litas)	Lithuania	Russia	Kingdom of Sweden	Total
Non-current assets	62,045,208	316,468	0	62,361,676
Inventories	8,962,778	59,831	0	9,022,609
Other current assets	94,389,969	34,182,594	602,162	129,174,725
Total segments assets	165,397,955	34,558,893	602,162	200,559,010
Segment liabilities
Financial liabilities	539,517	0	0	539,517
Trade accounts payable	41,152,829	1,105,339	289,230	42,547,398
Other payables	15,529,325	10,074,350	0	25,603,675
Total segment liabilities	57,221,671	11,179,689	289,230	68,690,590
Capital expenditure	1,727,367	0	0	1,727,367

5. Segments (continued)

			ﺎ
Year 2011 (in Litas)	Lithuania	Russia	Kingdom	Total
Revenue	182,572,358	25,359,433	10,782,527	218,714,318
Cost of sales	(170,722,746)	(21,822,778)	(8,002,420)	(200,547,944)
Other income	888,947	1,553	0	890,500
Operating expenses	(8,635,519)	(1,096,378)	(145,318)	(9,877,215)
Other expenses	(686,110)	0	0	(686,110)
Impairment of assets	365.111	0	0	365,111
Amortization and depreciation	(4,808,901)	(47,367)	(9,572)	(4,865,840)
Operating result	(1,026,860)	2,394,463	2,625,217	3,992,820
Financial and investing income Financial and investing	1,210,102	452,895	16,658	1,679,655
expenses	(911,623)	(131,859)	(62,456)	(1,105,938)
Income tax income (expenses)	(23,168)	(2,172,611)	(774,816)	(2,970,595)
Net profit (loss)	(751,549)	542,888	1,804,603	1,595,942
Segment assets
Year 2011 (in Litas)	Lithuania	Russia	United Kingdom	Total
Non-current assets	70,852,207	384,012	22,295	71,258,514
Inventories	9,747,686	17,984	3,349	9,769,019
Other current assets	109,695,251	14,807,307	3,070,330	127,572,888
Total segment assets	190,295,144	15,209,303	3,095,974	208,600,421

Segment liabilities

Total segment assets

Financial liabilities	2,120,012	0	0	2,120,012
Trade accounts payable	32,394,019	2,868,183	273,952	35,536,154
Other payables	28,628,032	11,798,232	83.297	40,509,561
Total segment liabilities	63,142,063	14,666,415	357,249	78,165,727
Capital expenditure	1,750,182	0	0	1,750,182

Major customer

Revenue from major customer of the Company in 2012 represents approximately 79,320 thousand Litas (2011: 29,175 thousand Litas) of the Company's total revenues.

AB Panevėžio Statybos Trestas Separate financial statements

6.	Cost of sales (In Litas)	2012	2011
		104,193,709	88,778,502
	Constructions sub-contractors Raw materials and consumables	85,074,376	57,834,907
	Personnel expenses	29,232,656	30,432,626
	Depreciation	2,599,853	3,559,475
	Amortisation	8,069	7,765
	Other costs	26,321,720	23,501,909
	Total cost of sales	247,430,383	204,115,184
7.	Sales expenses
	(In Litas)	2012	2011
	Personnel expenses	209,695	240,353
	Advertising and similar expenses	115,567	96,918
	Total sales expenses	325,262	337,271
8.	Administrative expenses
	(In Litas)	2012	2011
	Personnel expenses	6,754,515	5,367,485
	Purchased services for administration purposes	3,190,075	4,264,039
	Impairment of trade receivables	1,478,653	(2,719,632)
	Depreciation	843,056	910,114
	Operating taxes	422,744	379,042
	Amortization	17,086	13,917
	Impairment of prepayments	(72,532)	(94,053)
	Other expenses	1,026,950	1,987,787
	Total administrative expenses	13,660,547	10,108,699
9.	Personnel expenses
	(In Litas)	2012	2011
	Wages and salaries	24,860,808	24,884,058
	Compulsory social security contributions	7,724,975	7,577,519
	Daily and illness allowances	4,164,476	4,030,901
	Change in accrued vacation reserve and bonuses	(553,393)	(452,014)
	Total personnel expenses	36,196,866	36,040,464
	Included into:
	Cost of sales	29,232,656 6,754,515	30,432,626 5,367,485
	Administrative expenses Sales expenses	209,695	240,353
	Total personnel expenses	36,196,866	36,040,464

10.	Other income and expenses
	(In Litas)	2012	2011
	Rent and other income	887,352	759,990
	Gain from disposed property, plant and equipment	93,068	130,510
	Total other income	980,420	890,500
	Depreciation of rented premises and other expenses	(1,053,606)	(1,034,712)
	Loss from disposed property, plant and equipment	(1,501)	(16,132)
	Total other expenses	(1,055,107)	(1,050,844)
	Total other income and expenses, net	(74,687)	(160,344)
	11. Finance income and expenses
	(In Litas)	2012	2011
	Interest income	1,516,879	1,619,308
	Other income	4,245	60,347
	Total finance income	1,521,124	1,679,655
	Interest expense	(437,248)	(423,644)
	Foreign currency exchange loss	(110,048)	(650,950)
	Other expenses	(18,085)	(31,344)
	Total finance expenses	(565,381)	(1,105,938)
	Total finance income and expenses, net	955,743	578,717
12.	Income tax
	Income tax expense:
	(In Litas)	2012	2011
	Current tax expense	908,086	2,947,427
	Change in deferred tax	(44,319)	23,168
	Total income tax expense	863,767	2,970,595

As of 1 January 2012, the Company applied a standard rate of 15% in Lithuania, a 20% rate in Russian Federation and a rate of 26.3% in the Kingdom of Sweden (as of 1 January 2011: rate of 15% in Lithuania, a 20% rate in Russian Federation and a rate of 28% in the United Kingdom).

12. Income tax (continued)

Reconciliation of effective tax rate:

(In Litas)		2012	2011
Profit for the year Total income tax expense Profit excluding income tax		1,448,149 863,767 2,311,916		1,595,942 2,970,595 4,566,537
Income tax applying the Company's domestic tax rate	15.0%	346,787	15.0%	684,981
Effect of tax rates in foreign jurisdictions	7.0%	162,906	10.3%	471,099
Non deductible expenses Tax exempt income	28.2% (2.2)%	652,157 (50,513)	28.6% (0.6)%	1,308,232 (27,231)
Current year losses for which no
deferred tax asset was previously recognised Utilized tax losses for which no deferred	0%	0	12.2%	556,682
tax asset was previously recognised Change in unrealized temporary	(8.8)%	(203,251)	0%	0
differences	(1.9)%	(44,319)	(0.5)%	(23,168)
	37.3%	863,767	65.0%	2,970,595

Deferred tax:

(In Litas)	2012		2011
	Temporary differences	Deferred tax	Temporary differences	Deferred tax
Impairment of trade receivables	11,161,986	1,674,298	9,683,333	1,452,500
Accrued bonuses	360,222	54.033	1,155,754	173,363
Vacation reserve	816,027	122,404	690,723	103,608
Warranty provision	1,195,432	179,315	1,060,670	159,101
Stock write down to NRV	310,134	46,520	173,831	26,075
Taxable losses	2,356,205	353,431	3,711,212	556,682
Differences of tax regimes in foreign
jurisdictions	9,711,144	1,456,672	8.054.944	1,208,242
Not recognized deferred tax assets Total deferred tax assets		(3,473,052) 413,621		(3,206,080) 473,491
Revaluation of land and buildings	6,268,671	940,301	6,963,265	1,044,490
Deferred tax liability		940,301		1,044,490
Deferred tax, net		(526,680)		(2-0.999)

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Part of deferred tax has not been recognized due to uncertainty of deferred tax realisation.

Change in deferred tax:

Net deferred tax at 31 December	(526,680)	(570,999)
Recognized in profit or loss	44.319	(23.168)
Recognized in other comprehensive income		459,675
Net deferred tax at 1 January	(570.999)	(1,007,506)
(In Litas)	2012	2011

AB Panevėžio Statybos Trestas Separate financial statements

13. Property, plant and equipment

In Litas)	buildings Land and	equipment Plant and	Vehicles	Fixtures and fittings	Construction in progress	Total
Cost (fair value of land and buildings) Balance at 1 January 2011 Additions	332,425 26.367.223	16,177,133 210,221	8.631.229 727,753	9.858.708 462,283		61,034,293 1.732,682
Revaluation Jisposals	(3.411,293)	(293.756)	(77,600)	(164,857)		(3,411,293) (536,213)
Balance at 1 January 2012 Additions	23,288,355 367,771	415.676 16.093.598	352,325 9,281,382	10.156.134 398.062		58,819,469 1.533.834
Revaluation Jisposals	(14.423) (37,759)	(846.753)	(148.444)	(653.082)		(14,423) (1,686,038)
Balance at 31 December 2012	23,603,944	15.662.521	9.485.263	9.901.114		58.652.842
Depreciation and impairment losses Balance at 1 January 2011 Depreciation for the year	10,175,693 1,008,162	12,332,384 1.897.540	1,096,670 6.492.312	8.066.810 841.786		37.067.199 4.844.158
Depreciation of the assets disposed Revaluation	40.352	(276.506)	(32,599)	(163,594)		40,352 (472,699)
Balance at 1 January 2012 Depreciation for the year	997.644 11.224.207	13.953.418 1.444.213	7,556,383 775.942	8.745.002 603.862		41.479.010 3,821,661
Impairment (reversal of impairment) Depreciation of the assets disposed	(37.517) (28,765)	(846,730)	(148,436)	(644.105)		(28.765) 1.676.788)
Balance at 31 December 2012	12,155,569	14.550.901	8,183,889	8.704.759		43.595.118
At 1 January 2012 Carrying amounts	12.064.148	2.140.180	1.724.999	1,411,132		17.340.459
At 31 December 2012	11.448.375	1.101.620	1,301,374	1.196.355		15.057.024

13. Property, plant and equipment (continued)

Land and buildings are stated at revalued amount. The last revaluation was performed as at 31 December 2011 based on the valuation of the Company's land and buildings carried out by an external independent valuation company UAB Matininkai, having appropriate recognized professional qualifications and necessary experience in property valuation. In 2012, no significant changes occurred in the real estate market; therefore, in the opinion of management, there was no need for valuation of buildings at the end of 2012 and thus no adjustments related to revaluation were made in the financial statements for the year 2012. Decrease in revaluation in year 2012 (14,423 Litas) is related to sale of buildings, for which revaluation was booked (at the date of sales revaluation was reversed).

If the buildings were stated at cost, their carrying amount as at 31 December 2012 would be equal to 5,836 thousand Litas (31 December 2011: 5,786 thousand Litas).

(In Litas)	2012	2011
Depreciation included into:
Cost of sales	2,599,853	3,559,475
Administrative expenses	843,056	910,114
Other expenses	378,752	374,569
Total depreciation	3,821,661	4,844,158

Land and buildings with a net carrying amount of 8,180,270 Litas as at 31 December 2012 are pledged to the banks (refer to Note 28). At 31 December 2012, the net carrying amount of leased property, plant and equipment was 507,461 Litas (2011: 2,064,093 Litas).

Intangible assets 14.

(In Litas)	Software	Other	Total
Cost Balance at 1 January 2011 Additions Disposals	672,182 17,500	16,280	688,462 17,500
Balance at 1 January 2012 Additions Disposals	689,682 193,533	16,280	705,962 193,533
Balance at 31 December 2012	883,215	16,280	899,495
Amortization and impairment losses Balance at 1 January 2011 Amortization for the year Amortisation of the assets disposed	646,896 21,682	16,279	663,175 21,682
Balance at 1 January 2012 Amortization for the year Amortisation of the assets disposed	668,578 25,155	16,279	684,857 25,155
Balance at 31 December 2012	693,733	16,279	710,012
Carrying amount At 1 January 2012	21,104	1	21,105
At 31 December 2012	189,482	1	189,483

15. Investments in subsidiaries

(In Litas)	2012		2011
Subsidiary	Ownership	Cost	Ownership	Cost
UAB PST Investicijos	68%	30,652,000	68%	30,652,000
000 Baltlitstroj	100%	1,177,672	100%	1.177.672
UAB Vekada	96%	776,482	06%	776.482
UAB Skydmedis	100%	500,000	100%	500.000
UAB Alinita	100%	240,000	100%	240.000
UAB Metalo Meistrai	100%	81,500	100%	81,500
SIA PS Trests	100%	13,175	100%	13,175
TUB Vilniaus Papėdė	69%	10,000	69%	10,000
Kingsbud Sp.z.o.o	100%	4,377	100%	4,377
Impairment		(13,175)		(13,175)
Total investment		33,442,031		33,442,031

Financial information about the subsidiaries can be specified as follows:

(In Litas)	Type of activities	Equity as at 31/12/2012	Net profit (loss) for 2012	Equity as at 31/12/2011	Net profit (loss) for 2011
UAB PST Investicijos (consolidated - see
below)	Development of real estate	16,651,351	2,210,392	14,890,736	(1,809,669)
000 Baltlitstroj	Constructions	33,821	876,363	(307,421)	1,120,067
	Constructions: electricity
UAB Vekada	instalments	5,184,713	451,637	4,524,873	65,503
	Constructions: wooden
UAB Skydmedis	houses	1,780,745	458,002	1,322,743	256.484
	Constructions: conditioning
UAB Alinita	equipment	119,285	196,977	(77,693)	(155,372)
UAB Metalo Meistrai	Constructions	1,103,468	(60,281)	1,163,749	(242,989)
SIA PS Trests	Constructions	(784,021)	45,091	(827,456)	(4,390)
Kingsbud Sp.z.o.o	Constructions	42,060	(9,320)	47,488	80,145
TUB Vilniaus Papėdė	Development of real estate	3,808	220	2,470	(11,255)

When preparing the financial statements estimation of recoverable amounts of the investments was prepared. Recoverable amount of investment into UAB PST Investicijos was estimated taking recoverability of individual construction projects being developed. For each construction project under development a special purpose entity has been established and as at 31 December 2012 UAB PST Investicijos has the following special purpose subsidiaries:

(In Litas)	Ownership	Equity as at 31/12/2012	Net profit (loss) for 2012	Equity as at 31/12/2011	Net profit (loss) for 2011
000 Baltevromarket	100%	(11,409,022)	(319,769)	(10,639,477)	(1,557,340)	(i)
UAB Verkių Projektas	100%	5,523,791	4.006.853	1,516,938	1.254.357	(ii)
UAB Ateities Projektai	100%	957.165	(16,948)	974.116	(1,345,088)	(111)
UAB Kauno Erdvė	100%	(4,629,738)	(141,629)	(4,488,109)	(395.903)	(iii)
UAB Sakališkės	100%	(4,351,167)	(198.694)	(4,152,473)	492,217	(iii)
UAB Seškinės Projektai	100%	4.452,341	(12,371)	4,464,712	(142,489)	(iii)

15. Investments in subsidiaries (continued)

• (i) Investicijos is related to the real estate project being developed by OOO Baltevromarket in Kaliningrad. OOO Baltevromarket continues successful development of real estate project: in 2012, removal of high pressure gas pipes (total length of 1,524 metres) from the built zone was started; documentation for the sale of the object is being prepared. After the end of the heating season, the gas will be connected through a new line. In 2012, negotiations with potential temants took place and in 2013 rent agreements are planned to be concluded. To support the recoverable amount, the Company has a market price estimate prepared by an independent valuer. According to the evaluation of the real estate expert Newsec/Re&Solution, the market value of OOO Baltevromarket as at 31 December 2011 amounted to 67,370,000 EUR. In the valuation, the discounted cash flows method was used. Key inputs used by the valuator could be detailed as follows:
  • discount rate 10%; .
  • exit yield 8.5%;
  • · shopping centre area: rent prices from 10 to 34 EUR/sq.m., occupancy rate from 75 to 98%;
  • · living area: sale price 1,100 EUR/sq.m .;
  • · hotel area: number of rooms 250, price per accommodation from 85 to 95 EUR/night, average occupation - 70%.

In 2012, no significant changes occurred in the real estate market; therefore, in the opinion of management, there was no need for valuation of OOO Baltevromarket at the end of 2012.

• (ii) office centre Ulonų Verslo Centras (Ulonų Business Centre). The office centre was delivered to the state commission. To support the recoverable amount, the Company obtained a market price evaluation of an independent real estate valuer UAB Resolution Valuations. The discounted cash flows method was used for valuation (the discount rate of 11% and the exit yield of 8.5%).
• (iii) The recoverable amounts of other projects have been estimated based on the consultations with the real estate valuer Ober-Haus Nekilnojamas Turtas regarding potential market prices. In calculation of the prices of property, the discounted cash flow method was used (the discount rate of 15% and the exit yield of 20%).

As to management's estimation, except for SIA PS Trests, investments into the subsidiaries are not impaired.

1 (01) - 2011 ( CITY 10 (11) - 21 (0) (2011) - 1
(In Litas)	Interest rate	Maturity	2012	2011
UAB PST Investicijos (loan)	6 month VILIBOR+2.2%	31/03/2015	10.858.503	5,235,649
UAB PST Investicijos (loan)	6 month VILIBOR+1.9%	01/09/2014	2,273,554
AB Panevėžio Keliai (loan)	3 month VILIBOR+1.9%	12/01/2013	()	10,000,000
Other			24.671
Total			13,156,728	15,235,649

Non-current loans granted 16

17. Other non-current financial assets

As at 31 December 2012 the Company did not have other non-current financial assets (as at 31 December 2011 other financial assets consist of term deposit at bank in amount of 3,677,048 Litas with maturity in May 2013, and a deposit as a guarantee in amount of 742,000 Litas with maturity in July 2013).

Inventories 18.

Total inventories	9,022,609	9,769,019
Write-down to net realizable value	(310,134)	(173,831)
Goods for resale	235,972	2,237,044
Raw materials and consumables	9,096,771	7,705,806
(In Litas)	2012	2011

Change in write-down of inventory to the net realizable value was stated under Cost of Sales.

Trade receivables 19.

Total trade receivables	75,698,974	60,206,979
Impairment	(11,161,986)	(9,683,333)
Accrued receivables in accordance with the stage of completion	1,729,708	1,472,111
Trade receivables due from related parties	18,129,961	7,769,473
Trade receivables due from external customers	67,001,291	60,648,728
(In Litas)	2012	2011

As at 31 December 2012 aggregate costs incurred under construction contracts in progress and recognized profits, net of recognized losses, amounted to 223,192,070 Litas (2011: 112,757,857 Litas). Progress billings under open construction contracts amounted to 244,735,903 Litas as at 31 December 2012 (2011: 122,256,984 Litas). Billings in excess of costs incurred and recognized profits are presented as deferred income (disclosed in Note 27) and amounted to 11,543,833 Litas as at 31 December 2012 (2011: 9,499,127 Litas).

As at 31 December 2012, trade receivables include retentions (retention – a fixed percentage of the total contract price which be repaid having delivered the construction after its completion and having presented the bank guarantee of the retained cash or warrantee document of the insurance company) of 7,688,215 Litas (2011: 10,288,013 Litas) relating to construction contracts in progress.

For impairment of trade receivables refer to Note 4.

20. Current loans granted

(In Litas)	Interest rate	Maturity	2012	2011
UAB PST Investicijos (loan)	6 month VILIBOR+1.9%	12/05/2013	5,423,015	5,891,956
000 Baltlitstroj (loan)	5% fixed	01/09/2013	10,741,087	7,883,396
AB Panevėžio Keliai*	3 month VILIBOR+1.9%	11/01/2013	4,000,000
Other current loans			()	12,000
Total			20,164,102	13,787,352

*Until the reporting date the loan was not repaid.

21. Other current financial assets

As at 31 December 2012 the Company had a term deposit at bank in amount of 3,677,048 Litas with maturity in May 2013 (as at 31 December 2011: deposit as a guarantee in amount of 2,027,787 Litas with maturity in January 2012).

22.	Cash and cash equivalents
	(In Litas)	2012	2011
	Cash at bank	17,875,198	42,865,402
	Cash in hand	17,052	58.494
	Bank deposits	()	762.928
	Total cash and cash equivalents	17,892,250	43.686.824

23. Capital and reserves

The Company's authorized share capital consists of 16,350,000 ordinary shares with a nominal value of 1 Litas each. The Company's authorized share capital is fully paid. The holders of the ordinary shares are entitled to one vote per share in the shareholders' meeting and are entitled to receive dividends as declared from time to time and to capital repayment in case of decrease of the capital. There were no changes in the share capital in 2012.

Reserves are as follows:

(In Litas)	2012	2011
Revaluation reserve	5,328,370	5,918,775
Legal reserve	1,635,030	1,635,030
Total reserves	6,963,400	7,553,805

The revaluation reserve relates to the revaluation of land and buildings and is equal to the carrying amount of revaluation less the related deferred tax liability.

Movement of revaluation reserve:

	2012	2011
Revaluation reserve at 1 January	5,918,775	9,119,597
Revaluation result	0	(3,064,499)
Reversed revaluation for sold assets	(14,423)
Depreciation of revaluation reserve	(680,172)	(701,174)
Deferred tax on revaluation	0	459.675
Deferred tax on depreciation of revaluation	104,190	105,176
Revaluation reserve at 31 December	5,328,370	5,918,775

Legal reserve is a compulsory reserve allocated in accordance with the legislation. An annual allocation of at least 5% of the net profit is required until the reserve is not less than 10% of the authorized share capital. The reserve cannot be distributed.

24.	Earnings per share (In Litas)	2012	2011
	Net result for the year	1,448,149	1,595,942
	Average number of shares	16,350,000	16,350,000
	Basic and diluted earnings per share	0.09	0.10

25.	Loans and borrowings
	(In Litas)	2012	2011
	Non-current liabilities	()	537,785
	Current liabilities	539,517	1,582,227
	Total loans and borrowings	539,517	2,120,012

Borrowings include liabilities to leasing companies for the property, plant and equipment acquired by finance lease with a carrying value of 507,461 Litas as at 31 December 2012.

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specific asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Company the right to control the use of the underlying asset.

Finance lease liabilities are payable as follows:

In 2012 (in Litas)	Minimum payments	Interest	Principal amount
Payable within one year	550,210	10,693	539,517
Between one and five years		0	0
	550,210	10,693	539,517
In 2011 (in Litas)	Minimum payments	Interest	Principal amount
Payable within one year	1,656,080	73,853	1,582,227
Between one and five years	548,478	10,693	537,785
	2,204,558	84,546	2,120,012

As at 31 December 2012, the Company had two effective credit agreements with banks with the limit of 15,000,000 Litas and maturity in 2013. The used amount of the credit as at 31 December 2012 is 0 Litas (as at 31 December 2011 the Company had no effective credit agreements with banks).

Warranty provision 26.

Warranty provisions are related to constructions built in 2008-2012. Based on the legislation of the Republic of Lithuania, the Company has a warranty liability for construction works. The term of liability from 5 to 10 years after delivery of construction works. Provision for warranties is based on estimates made from historical data of actually incurred costs of warranty repairs.

Change of provision for warranties is as follows: 2012 2011 Provisions for warranties in the beginning of the period 1,060,670 731,694 (709,129) (704,004) Used and recognized under cost of sales 1,038,105 838,766 Accrued during the period 1,195,432 1,060,670 Provisions for warranties at the end of the period

Other liabilities 27.

. (In Litas)	2012	2011
Accrued vacation reserve	3,603,143	3,361,004
Accrued bonuses for employees	360,222	1.155,754
Payable salaries and related taxes	2,668,816	3,209,230
Deferred income in accordance with the stage of completion	11,543,833	9.499.127
Other liabilities	2,647,125	2,595,792
Total other liabilities	20,823,139	19,820,907

Contingencies 28.

Guarantees to third parties of 21,300,591 Litas, related to liabilities in the construction contracts of the Company, have been issued by the banks. The guarantees expire from 15 January 2013 to 17 December 2015.

Property, plant and equipment, with a carrying value of 2,917,843 Litas as at 31 December 2012, and current and future funds in bank account have been pledged to bank for the credit line issued and guarantees issued by bank.

Property, plant and equipment, with a carrying value of 5,262,427 Litas as at 31 December 2012, and current and future funds in bank account have been pledged to bank for the overdraft and guarantee limit issued. On 18 March 2013, the Credit Agreement with the bank was terminated.

Based on the Credit Agreement, inventories with a carrying value of 5,460,223 Litas as at 31 December 2012, future inflows and cash balances have been pledged to bank.

The requirement right to the income receivable as to the subcontract, current and future funds in bank account have been pledged to bank as to the guarantee limit contract.

Cash deposit in amount of 3,677,048 Litas and interest received and receivable for it have been pledged to bank for the contract performance guarantee issued to client.

The Company is involved in several court proceedings. As to management, the outcome of the proceedings will not have any significant effect on the financial statements.

29. Transactions with related parties

Related parties are defined as shareholders, employees, members of the Management Board, their close relatives and companies that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the Company, provided the listed relationship empowers one of the parties to exercise the control or significant influence over the other party in making financial and operating decisions.

The Company had sales and purchase transactions during 2012/2011 with subsidiaries, the parent company AB Panevėžio Keliai and with subsidiaries of AB Panevėžio Keliai. Transactions with related parties during 2012 are as follows:

(In Litas)	Type of transaction	2012	2011
Sales:
Companies under control
UAB PST Investicijos	Interest	517,750	306,543
000 Baltlitstroj	Goods, services, interest	18,121,280	4,837,944
UAB Metalo Meistrai	Goods and services	273,212	443,689
UAB Vekada	Goods and services	585,292	52,962
UAB Skydmedis	Goods and services	143,900	116,732
SIA PS Trests	Interest	68	801
UAB Alinita	Goods and services	200.282	41,130
UAB Verkių Projektas	Goods and services	11,992,037	642,649
TUB Vilniaus Papėdė	Cost compensation	0	10,943
Kingsbud Sp.z.o.o	Interest	0	946
Other related companies
UAB Panevėžys	Services	727	43.750
	Goods, services,	372.288	2,019,360
AB Panevėžio Keliai	interest	0	3,950
UAB Sostinės Gatvės	Goods and services	526	7,017
Other	Services
Purchases:
Companies under control		10,712,127	7,319,326
000 Baltlitstroj	Goods and services	9,277,761	3,775,275
UAB Metalo Meistrai	Goods and services	6,211,615	1,435,310
UAB Vekada	Goods and services	3,090,920	1,008,166
UAB Alinita	Goods and services	105,448	180,354
UAB Skydmedis	Goods and services	19,657	0
UAB PST Investicijos	Goods and services	53,860	0
UAB Verkių Projektas	Goods and services	947,600	1,827,377
Kingsbud Sp.z.o.o	Goods and services	26,685	12,224
TUB Vilniaus Papėdė	Goods and services
Other related companies
AB Panevėžio Keliai	Goods and services	3,451,771	3,891,913
UAB Aukštaitijos Traktas	Goods and services	5,128	27,431
UAB Keltecha	Goods and services	2,134,544	2,368,629
UAB Gelbera	Goods and services	260,912	379,900
UAB Convestus	Goods and services	319,587	320,000
UAB Ukmergės Keliai	Goods and services	19,847	0
UAB Sostinės Gatvės	Goods and services	0	207,034

29. Transactions with related parties (continued)

(In Litas)	2012	2011
Amounts receivable:
Companies under control
UAB PST Investicijos	1,344,345	717,867
000 Baltlitstroj	18,121,280	1,752,760
Kingsbud Sp.z.o.o	130,951	49,864
UAB Alinita	0	87.709
TUB Vilniaus Papėdė	3,387,005	1,192,742
UAB Verkių Projektas	2,001,558	0
UAB Metalo Meistrai	427,461	1,812,790
SIA PS Trests	30	2,981
UAB Skydmedis	36,825	0
Other related companies
UAB Panevėžys	2,243,300	2,392,300
Amounts payable:
Companies under control
UAB Vekada	2,286,315	1,156,403
UAB Skydmedis	0	10,886
UAB PST Investicijos	23,786	0
000 Baltlitstroj	0	693,355
UAB Alinita	528,256	0
Other related companies
UAB Keltecha	102,246	256,152
UAB Gelbera	17,069	29,847
AB Panevėžio Keliai	32,941	1,296,766
UAB Convestus	82,785	121,000
UAB Ukmergės Keliai	470	0
Loans receivable:
AB Panevėžio Keliai	4,000,000	10,000,000
UAB PST Investicijos	17,234,513	10,370,976
000 Baltlitstroj	10,510,898	7,883,396
SIA PS Trests	0	12,000
UAB Alinita	0	130,000

Wages, salaries and social insurance contributions, calculated to management for the year 2012, amounted to 1,754,550 Litas (2011: 1,334,968 Litas).

30. Determination of fair values

A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair value is defined as the estimated amount for which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm's length transaction, other than in forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash flow models and option pricing models as appropriate.

Trade and other receivables, other financial assets

The fair value of trade and other receivables is estimated at the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Short term receivables are not discounted.

30. Determination of fair values (continued)

Financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements. Short term payables are not discounted,

The fair value of the assets and liabilities reported in the statement of financial position as at 31 December 2012 does not differ significantly from their carrying amounts.

31. Subsequent events

There were no other subsequent events which would have an effect on the financial statements or require a disclosure.

Managing Director

Dalius Gesevičius

Chief Accountant

Danguolė Širvinskienė

PANEVĖŽIO STATYBOS TRESTAS AB CONSOLIDATED ANNUAL REPORT FOR THE YEAR 2012

1. ACCOUNTING PERIOD COVERED BY THE ANNUAL REPORT

The report covers the year 2012.

2. THE ISSUER AND ITS CONTACT DETAILS

Name of issuer	Public limited liability company Panevėžio statybos
	trestas
Authorised capital	16,350,000 Litas
Address of registered office	P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania
Telephone	(+370 45) 505 503
Fax	(+370 45) 505 520
E-mail	pst(a)pst.lt
Legal-organisational form	Public limited liability company
Date and place of registration	30 October 1993, Panevėžys City Board
Registration No.	AB 9376
Company Register code	147732969
VAT code	IT477329610
Administrator of Legal Entity	State Enterprise Centre of Registers
Register
Website	www.pst.lt

3. PRINCIPLE NATURE OF ACTIVITIES OF THE ISSUER

The main area of activities of the company and its subsidiaries (Group) is designing and construction of buildings, structures, equipment and communications and other objects for various applications in and outside Lithuania, sale of building materials, and real estate development. In addition to the above activities, the company is engaged in rent of premises and mechanisms.

4. CONTRACTS WITH INTERMEDIARY OF PUBLIC TRADING IN SECURITIES

On 7 February 2006 the Agreement No. 5792 was signed with the Public Limited Liability Company DNB bankas located at Basanavičiaus Str. 26, Vilnius, which was entrusted to manage the account of securities issued by the company.

5. DATA ON TRADING IN SECURITIES OF THE ISSUER IN REGULATED MARKETS

The ordinary registered shares of Panevėžio statybos trestas AB, totalling 16,350,000 pcs, the nominal value of each being one Litas, have been on the Official Trading List of the Vilnius Stock Exchange (VSE) since 13 July 2006.

Company share price variation at VSE for the period of 2009 through 2012 (in Litas)

Last price	Average share	Highest price	Lowest price	Last price
31 Dec. 2011	price for 2012	for 2012	for 2012	31 Dec. 2012
3.764 Litas	3.565 Litas	4.554 Litas	3.056 Litas	3.208 Litas

Capitalization, million Litas
2008	2009	2010	2011	2012
24.53	61.97	110.08	61.53	52.45

6. FAIR REVIEW OF THE COMPANY'S POSITION, PERFORMANCE AND DEVELOPMENT OF THE COMPANY'S BUSINESS, DESCRIPTION OF THE PRINCIPAL RISKS AND UNCERTAINTIES IT FACES

Panevėžio statybos trestas AB remains one of the largest companies in Lithuania.

In 2012 Panevėžio statybos trestas AB successfully completed fulfilment of the contract with Fortum Klaipeda UAB for construction of Klaipeda CHP Plant, finished construction and put into use the real estate development project Ulonų verslo centras (Ulonai Business Centre).

The company was awarded the gold medal "Lithuanian Product of the Year" for the completed real estate development project Ulonų verslo centras in 2012.

In 2012 Panevėžio statybos trestas AB successfully completed construction of admission emergency department and a connecting corridor, and reconstruction of premises at the Kelme hospital, reconstruction of the Culture Centre of Seduva, Radviliškis District Municipality, and its surrounding area, renovation and development of the water supply and waste water infrastructure in Krekenava, Panevėžys District.

In 2012, the company successfully continued works in one of the largest and most complicated projects in Lithuania - construction of 4,500 tons per day dry clinker production line at Akmenes cementas AB.

In 2012 the following branches were operating under the name of the company: Gerbusta, focusing on construction of engineering networks and landscaping, Pastaty apdaila, carrying out indoor and outdoor finishing works, and Vilnius branch Genranga, performing general contracting activities and project management in Vilnius Region, and Klaipstata, performing general contracting activities and project management in Klaipeda Region.

Market members value the company as an experienced builder of large and technologically complicated objects. Such approach of customers has been achieved as a result of hard work and continuous internal improvement of the company - qualified and experienced employees work for the company, the company has a few licences and certificates attesting that management of the company is done in a qualitative manner and meets the requirements of the European standards.

The company paid great attention to the quality of works carried out, environment protection and occupational safety. The company has successfully implemented and is working in accordance with the quality management system LST EN ISO 9001:2008 and environment management system LST EN ISO 14001:2005. To ensure prevention of accidents at work, occupational safety and health violations of organizational manner in the company and reduce the number of occupational diseases the company has implemented the occupational safety and health management system meeting the requirements of the international standard BS OHSAS 18001:2007 (LST 1977:2008).

In 2008 the National Accreditation Bureau of Lithuania renewed accreditation for the Construction Laboratory of the company for 5 more years in accordance with LST EN ISO/IEC 17025:2005 thus granting the right to perform tests with construction materials.

Valuable experience in the construction of complicated objects was gained in the course of the years. The activities are widely developed in terms of both services and geography because projects are implemented not only in Lithuania. There are branches operating in Cherepovets and Kaliningrad, Russian Federation, subsidiary companies in the Russian Federation and the Republic of Poland as well as a permanent establishment in the United Kingdom of Great Britain and Northern Ireland, and a permanent establishment in the Kingdom of Sweden, which was registered in 2012.

Risk factors related to the company's activities:

• · Persistent decline in construction market;
• · Shortage of qualified labour;
• · Stringent credit terms at the banks;
• · Extremely increased and intense competition;
• · Low prices of construction services;
• . Damping;
• Delays in payments made by customers; .
• Black economy.

Other information on the types of risks arising to the Group and risk management is provided in Note 4 of the Explanatory Notes to the Separate Financial Statements and in Note 4 of the Explanatory Notes to the Consolidated Financial Statements.

7. INFORMATION ON SUBSIDIARIES OF THE COMPANY

As of 31 December 2012 the Company Group of Panevėžio statybos trestas AB included the following companies:

Subsidiaries	Type of activities	Share controlled (per cent)	Registered address
Skydmedis UAB	Production of wood constructions	100	Pramones Str. 5, Panevėžys Tel .: +370 45 583341
Metalo meistrai UAB	Production of metal constructions	100	Tinkly Str. 7, Panevėžys Tel. +370 45 464677
Vekada UAB	Electrical installation works	તે ઉર્ણ	Marijonų Str. 36, Panevėžys Tel .: +370 45 461311
Vilniaus papėdė TUB	Construction works	69	Naugarduko Str. 100, Vilnius
Alinita UAB	Ventilation and conditioning systems in buildings	100	Tinkly Str. 7, Panevėžys Tel.+370 45 467630
KINGSBUD Sp.zo.o.	Wholesale in construction materials	100	A. Patli 16-400, Suwalki, Poland
PS TRESTS SIA	Construction	100	Vietalvas Str. 5, Riga
BALTLITSTROIJ OOO	Construction	100	Sovetskij Ave. 43, Kaliningrad Tel .: 0074012350435
PST investicijos UAB	Real estate development	68	Verkių Str. 25C, Vilnius Tel .: +370 5 2102130
Subsidiaries of PST investicijos UAB:
Ateities projektai UAB	Real estate development and sales	100	Verkių Str. 25C, Vilnius
Seškinės projektai UAB	Real estate development and sales	100	Verkių Str. 25C, Vilnius
Sakališkės UAB	Real estate development and sales	100	Verkių Str. 25C, Vilnius
Kauno erdvė UAB	Real estate development and sales	100	Verkių Str. 25C, Vilnius
Verkių projektas UAB	Real estate development and sales	100	Verkių Str. 25C, Vilnius
ISK Baltevromarket ZAO	Construction investment company	100	Chernyakhovsk Str. 6, Kaliningrad

Skydmedis UAB (company code 148284718) was established and started its activities on 17 June 1999.

The main activity of the company is production of timber-frame/element houses, fabrication of wood structures and joinery for construction purposes, cutting and planning of wood, wholesale and retail in building materials, production of pallets, stands and other wooden items for loading, building outfit.

In 2012 the company received income of 7,656.7 thousand Litas and generated net profit in the amount of 458 thousand Litas. The major part of income, i.e. 88.9 per cent, was received in other countries, such as Denmark, Norway, Iceland and Sweden, 11.1 per cent of income was received in Lithuania.

	2010	2011	20152
Income from sales, thousand Litas	4.207.6	6.783.2	7,601.7
Gross profit, thousand Litas	943.0	1,375.4	1,946.8
Net profit, thousand Litas	222.0	256.5	458.0
Gross profitability	22.4%	20.3%	25.6%
Net profitability	5.3%	3.8%	6.0%
Return on equity, % (ROE)	20.83	19.39	25.72
Current liquidity ratio	1.8	2.2	2.2
Acid test (Quick) ratio	1.4	1 5	1.6

The main performance indicators of Skydmedis UAB are as follows:

In 2013 certification of products should be completed. This will allow securing the market in the segment of top quality timber-frame/element houses while expanding export to the Scandinavian countries, the products will be adapted to the foreign markets and meet strict quality standards. Moreover, the company will have a better opportunity to compete with the Norwegian timber house producers, be able to sell their products through real estate developers participating in projects of larger scope.

At the end of 2012 Skydmedis UAB had 63 employees. The share capital is divided into one thousand ordinary shares the value of one share being 500 Litas. The main shareholder is Panevėžio statybos trestas AB holding 100% of shares.

Metalo meistrai UAB (company code 148284860) was founded on 16 June 1999 and started its activity on 1 July 1999. The company is engaged in fabrication of various metal structures and their elements.

In 2012 income from sales increased by 39.5 per cent compared to 2011 and amounted to 10,907 thousand Litas, however net loss in the amount of 62 thousand Litas was incurred.

	2010	2011	20112
Income from sales, thousand Litas	5.876	7.819.5	10,907.4
Gross profit, thousand Litas	745	256.2	574 3
Net profit, thousand Litas	250	-243	-60
Gross profitability	12.7%	3.3%	5.3%
Net profitability	4.3%	-3.1%	-0.6%
Return on equity, % (ROE)	17.77	-20.88	-5.46
Current liquidity ratio	1.86	0.96	0.88
Acid test (Quick) ratio	0.99	0.36	0.82

The main performance indicators of Metalo meistrai UAB are as follows:

At the end of 2012 the company had 59 employees.

The company has the quality management system ISO 9001:2008, environment protection management system ISO 14001:2004 introduced and got the certificates for EN 1090 - steel structure production quality control - and ISO 3834-3 - quality management system for fusion welding of metallic materials.

In 2013 the company plans to continue production of steel structures and their elements, increase turn-over and profitability, respond to market changes. The efforts will be put in search of new sales orders in and outside Lithuania.

There were no changes in authorized share capital and the shareholder structure, i.e. as before, the share capital totalling 500,000 Litas is divided into 1,000 ordinary shares the value of one share being 500 Litas. The main shareholder is Panevėžio statybos trestas AB holding 100% of shares.

Vekada UAB (company code 147815824) was established on 1 January 1963 and had the name of Elektros montavimo valdyba (Electrical Installation Department), later on 16 May 1994 it was re-registered as Vekada UAB. The main activities of the company are electrical installation works on subcontracts. During the reporting year, alongside with the normal electrical work, the work areas related to low currents were under expansion: video surveillance systems, security and fire alarm systems. Electrical installation work was started in the field of renewable energy sources.

In 2012 the company received income of 10.861 million Litas and generated net profit in the amount of 451.6 thousand Litas.

	2010	2011	2012
Income from sales, thousand Litas	9.770.0	7,252.9	10,860.5
Gross profit, thousand Litas	1.140.0	1,187.0	1,579.0
Net profit, thousand Litas	-428.0	65.5	451.6
Gross profitability	11.7%	16.4%	14.5%
Net profitability	-4.4%	0.9%	4.2%
Return on equity, % (ROE)	-9.17	1.45	9.11
Current liquidity ratio	7.99	6.13	3.26
Acid test (Quick) ratio	7.28	5.05	3.09

The main performance indicators of Vekada UAB are as follows:

At the end of 2012 the company had 73 employees.

During the accounting year there were no changes in the authorised share capital of the company and structure of the shareholders, i.e. as before, the share capital amounting to 211,488 Litas is divided into 52,872 ordinary shares the value of one share being 4 Litas. The main shareholder is Panevėžio statybos trestas AB holding 95.6% of shares, the remaining part is held by natural persons.

Alinita UAB (company code 141619046) was established on 8 December 1997. The main activities of the company are installation of heating, ventilation and air-conditioning systems in buildings, installation of indoor water supply, sewerage and fire fighting systems in buildings, designing and commissioning of indoor engineering systems.

	2010	2011	2012
Income from sales, thousand Litas	1.578	1,788	4,127
Gross profit, thousand Litas	174.0	188.9	694.7
Net profit, thousand Litas	-142.0	-155.4	197.0
Gross profitability	11.0%	10.6%	16.8%
Net profitability	-9.0%	-8.7%	4.8%
Current liquidity ratio	0.99	1.00	1.05
Acid test (Quick) ratio	0.93	0.90	0.88

The main performance indicators of Alinita UAB are as follows:

The company has all certificates required for performance of the listed activities. In 2012 the company had 26 employees.

The share capital of the company totalling 10,000 Litas is divided into 100 ordinary shares the value of one share being 100 Litas. In 2004 Panevėžio statybos trestas AB acquired 100 % of shares.

Vilniaus papede TUB (company code 12545197) is the general partnership founded in 2000. The partnership was established for the period of building of the Palace of the Grand Dukes of Lithuania. The partnership does not generate any profit from its activities, and its expenses are distributed among the partnership members in proportion to their activities carried out.

The capital of the partnership is comprised of contributions of its founders totalling 14,500 Litas. 10,000 Litas accounting for 69 per cent was the contribution of Panevėžio statybos trestas AB. Other founders are also legal persons.

Baltlitstroii OOO (company code 236006) was founded and started its activities on 20 October 2000. The main activity of the company is construction works. In 2012 the company had 54 employees.

In 2012 the company received income of 51.480 million Litas and made net profit in the amount of 0.878 thousand Litas.

	20110	2011	2012
Income from sales, thousand Litas	25.473	62,357	51,480
Gross profit, thousand Litas	3.632	3,236.7	1.795.8
Net profit, thousand Litas	-105	1,120.1	878.4
Gross profitability	14.3%	5.2%	3.5%
Net profitability	-0.4%	1.8%	1.7%
Current liquidity ratio	0.81	0.98	1.00
Acid test (Quick) ratio	0.77	0.97	0.49

The main performance indicators of Baltlitstroij OOO are as follows:

The authorised capital of the company amounts to 12,000 thousand Roubles, 100% of shares are held by Panevėžio statybos trestas AB.

PST investicijos UAB (company code 124665689) was founded on 23 December 1998. The main activity of the company is preparation and sales of real estate. On 31 December 2012 the company group of PST investicijos UAB consisted of the parent company PST investicijos UAB and the following subsidiary companies: Sakališkės UAB, Kauno erdvė UAB, Ateities projektai UAB, Verkių projektas UAB, Šeškinės projektai UAB, Baltevromarket ZAO ISK.

PST investicijos UAB participates in the real estate projects either itself or through its subsidiary companies. Such performance development (by establishing a subsidiary company for an individual project) was chosen to calculate the result of each project as accurately as possible.

	2010	2011	20192
Income from sales, thousand Litas	1,329	237.1	1,039.0
Financial and investment activities, thousand Litas	10,035	-1,417.5	2,528.7
Net profit, thousand Litas	796.1	-1,809.7	1,642.7
Return on equity (ROE)	48.90	-16.67	14.44
Current liquidity ratio	50.72	1.75	1.88
Acid test (Quick) ratio	3.70	1.74	1.83

The main performance indicators of PST investicijos UAB are as follows:

In 2012 the real estate development project Ulony versio centras (Ulonai Business Centre) was successfully completed and put into use.

The main shareholders of the company are Panevežio statybos trestas AB (68.34%) and Panevėžio keliai AB (25.25%). The remaining part of shares is held by several natural persons (8.49%). As of 31 December 2012, the authorized capital of the company is 49,404,500 Litas and it is divided into 494,045 registered ordinary shares the nominal value of one share being 100 Litas.

KINGSBUD Sp.zo.o. (company code 200380717) was founded on 11 August 2010. The main activity of the company is wholesale in construction materials. The goal of the company is to carry out service of the main company and wholesale in construction materials.

	2010	2011	2012
Income from sales, thousand Litas	61	2,377.3	2,013.6
Gross profit, thousand Litas	8.9	278.2	176.2
Net profit, thousand Litas	-34.7	80.1	-9.3
Gross profitability	14.5%	11.7%	8.8%
Net profitability	-56.7%	3.4%	-0.5%
Return on equity (ROE)	-114.46	1.69	-22.16
Current liquidity ratio	0.23	1.75	1.19
Acid test (Quick) ratio	0.23	1.75	1.15

The main performance indicators of KINGSBUD Sp.zo.o are as follows:

The authorized capital of the company amounts to 5,000 Zlotys. The capital is divided into 100 contributions of the nominal value of 50 Zlotys each. Panevėžio statybos trestas AB controls 100% of shares.

8. ANALYSIS OF FINANCIAL AND NON-FINANCIAL PERFORMANCE, INFORMATION RELATED TO ENVIRONMENT AND EMPLOYEE MATTERS

In 2012, the income of the Group was higher by 5.1 per cent compared to that of 2011 and amounted to 300.1 million Litas (285.5 million Litas in 2011). The income of the company was higher by 20.2 per cent than in 2011. In 2012 it amounted to 262.8 million Litas (218.7 million Litas in 2011). During the accounting year the PST Group generated the net profit in the amount of 5.05 million Litas, whereas in 2011 the profit of the PST Group amounted to 0.9 million Litas. In 2012 the Company generated the net profit in the amount of 1.4 million Litas, and in 2011 the net profit amounted to 1.6 million Litas.

Income and net profit variation for the Group:

All financial data in the present annual report have been calculated following the International Financial Reporting Standards (IFRS) and expressed in the national currency of Lithuania - the Litas (LTL).

	Group			Company
2010	2011	2012	Items	2010	2011	2012
200,529	285,549	300,142	Income	168,903	218,714	262,847
171,035	264,019	277,379	Cost	147,096	204,115	247,430
29,495	21,530	22,763	Gross profit	21,807	14,599	15,417
14.71	7.54	7.58	Gross profit margin (per cent)	12.91	6.67	5.87
7,684	6,016	6,889	Operating result	9,508	4,153	1,356
3.83	2.11	2.30	Operating result from turnover (per cent)	5.63	1.90	0.52
27,179	10,792	12,206	Profit before taxes, interest, depreciation and amortization EBUDA	17,352	9,857	6,596
13.6	3.8	4.1	EBITDA margin (per cent)	10.3	4 51	2.51
8.91	0.31	1.68	Nets profit (loss) margin (per cent)	6.01	0.73	0.55
0.94	0.09	0.31	Profit (loss) per share (Litas)	0.62	0.10	0.09
15.7	0.80	4.35	Return on equity (per cent) (ROE)	7.65	1.22	1.10
8.99	0.39	2.14	Return on assets or asset profitability (ROA)	5.44	0.77	0.72
12.82	0.73	3.75	Return on investments (ROI)	7.4	1.20	1.08
2.69	1.79	1.93	Current liquidity ratio	2.25	1.82	2.08
2.05	1.31	1.34	Acid test (Quick) ratio	2.2	1.69	1.94
0.57	0.49	0.49	Asset to equity ratio	0.71	0.63	0.66
6.97	6.84	7.10	Book value of a share	8.11	7.98	8.07
7.2	41.9	10.38	Ratio of share price and profit (P/E)	10.8	38.6	36.2
0.96	0.55	0.45	Ratio of share price and book value (P/BV)	0.83	0.47	0.40

The results (in thousand Litas) of the parent company and the Company Group of Panevežio statybos trestas AB for the years 2010 through 2012 are as follows:

The operating income of the company based on business segments is from building and construction activities. In 2012 the income of the Group from building and construction activities totalled 95.6%, the income from real estate amounted to 0.3%, made products and other income amounted to 4.4%. In 2011 the income of the Group from building and construction activities totalled 96.1%, the income from real estate amounted to 0.1%, other income amounted to 3.9%.

		Group		Company
million Litas	2010	2011	2012	2010	2011	2012
Construction works	192.90	274.45	286.89	168.90	218.71	262.85
Real estate	1.33	0.24	0.99
Made products	3.41	6.37	6.79
Other	2.90	4.50	5.47

Income from main activity (million Litas) by geographical segments:

		Group		Company
million Litas	2010	2011	2012	2010	2011	2012
Lithuania	180.60	194.24	219.19	155.65	182.57	224.10
Russian Federation	17.11	74.47	68.43	13.26	25.36	35.01
Scandinavian countries	2.21	4.46	9.60			3.73
United Kingdom		10.78			10.78
Other countries	0.61	1.04	2.92

In 2012 the main activity of the company was performed in Lithuania and comprised 85.3% of all works carried out by the company (83.5% in 2011). The income of the Group from the works performed inside the country made 73% of the income whereas in 2011 it was 68.2%.

9. IMPORTANT EVENTS AFTER THE END OF THE PRECEDING FINANCIAL YEAR

There were no important events since the end of the preceding year.

10. PERFORMANCE PLANS AND FORECASTS OF THE COMPANY

The coming year is still likely not to be easy both for the company and for the whole construction sector. Construction costs increase due to increase in prices of building materials and pay for qualified employees. Furthermore, as emigration level remains high, shortage of qualified labour force is still an issue. In addition to that, the number of construction companies started increasing again, thus making competition in the construction sector stronger.

Next year efforts will be put to maintain stability by continuing the started activities, looking for possibilities to implement new projects with the clear target to remain the largest construction company in Lithuania. We will seek to increase the shareholders' value.

11. AUTHORISED CAPITAL OF THE ISSUER AND ITS STRUCTURE

As of 31 December 2012 the authorised capital of the company amounted to 16,350,000 Litas, divided into 16,350,000 ordinary registered shares (ORS) the nominal value of each share being 1.00 Litas. All shares are non-certificated and fully paid. The proof of ownership is the record in the securities accounts.

The composition of the issuer's authorised capital is as follows:

Share type	Number of shares (pcs.)	Par value (Litas)	Total par value (Litas)	Emission code
Ordinary registered shares (ORS)	16,350,000	1	16,350,000	101446

12. INFORMATION ON THE SHAREHOLDERS OF THE ISSUER

As of 31 December 2012, the number of shareholders holding or controlling more than 5 per cent of the authorised capital of the company was 2,270:

Name, surname of a shareholder (company name, type, headquarter address, company code)	Number of ordinary registered shares held by a shareholder under ownership right (pcs.)	Share of the authorized capital held (%)	Portion of votes granted by the shares held under ownership right (%)	Portion of votes owned by the shareholder along with acting persons (%)
Panevėžio keliai AB S. Kerbedžio Str. 7, Panevėžys, Company code: 147710353	8,138,932	49.78	49.78
SWEDBANK AS (Estonia) CLUBINTS Liivalaia 8, Tallinn Estonia Company code 10060701	987,598	6.04	6.04
Freely negotiable shares	7,223,470	44.18	44.18

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 shareholders of Panevežio statybos trestas AB is 16,350,000.

13. DIVIDENDS

The decision to pay dividends is taken and the amount to be paid as a dividend is set by the General Meeting of the Shareholders. The company pays the allocated dividends within 1 month from the date when decision on profit appropriation has been taken.

The persons who were the shareholders of the company at the tenth business day from the General Meeting of the Shareholders that had adopted the relevant decision are entitled to the dividends.

Following the Law on Income Tax of Individuals of the Republic of Lithuania and Law on Profit Tax of the Republic of Lithuania, any dividends are subject to income tax in the rate of 20 per cent. Such tax is calculated, deducted and paid to the budget by the company.

The General Meeting of Shareholders of Panevėžio statybos trestas AB that took place on 26 April 2012 made the decision to pay no dividends for the year 2011.

	Profit of financial year allocated for dividends
	2007	2008	2009	2010
Total amount allocated for dividends, Litas	3,760,500	1,144,500	1,144,500	1,144,500
Dividends per share	0.23	0.07	0.07	0.07
Ratio of dividends to net profit, %	15.1%	2.4%	23.8%	11.3%
Dividend profitability (dividends per share / share price as of the end of the period), %	1.5%	4.7%	1.8%	1.0%

14. EMPLOYEES

As of 31 December 2012, the number of employees in the Group was 1,134, in the company – 885.

Number of	2011		2012
employees on payroll	Group	Company	Group	Company
Management	29	12	28	12
Specialists	288	228	308	232
Workers	868	726	852	રેજેવ

Education level of the Group's employees for the end of the period:

Groups of employees	Payroll number	University education	Higher non- university education	Community college education	Secondary education	Incomplete secondary education
Management	29	25		1
Specialists	305	229	11	51	13
Workers	800	24	20	149	502	105

Average gross wages:

	2011		2012
Average salary/wage	Group	Company	Group	Company
Management	5,978	6,434	7,061	8,785
Specialists	3.111	3,196	3.587	3,661
Workers	1 'તેરેર ર	1.985	1.981	1.988

Employment contracts do not include any special rights or obligations of employees or some part of them.

In 2012 the company paid much attention to qualification improvement. Training in the company is organized in three directions using:

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

15. PROCEDURE FOR AMENDMENT OF THE ARTICLES OF ASSOCIATION OF THE ISSUER

The Articles of Association of the Company may be amended only by the General Meeting of Shareholders by at least 2/3 majority vote of the total votes of the shareholders attending the meeting. The resolution amending the Articles of Association shall be adopted in the procedure set forth in Articles 27 or 30 of the Law on Companies of the Republic of Lithuania.

16. MANAGEMENT BODIES OF THE ISSUER

Referring to the Articles of Association of Panevėžio statybos trestas AB, the management bodies of the company are the General Meeting of Shareholders, the Board and the Managing Director. The Supervisory Council shall not be formed in the Company.

The competence of the General Meeting of Shareholders shall not be different from the competence specified in the Law on Companies.

The Board of the Company consisting of five members shall be elected by the General Meeting of Shareholders for a period not longer than 4 years. At present there are five members in the Board. The procedure of electing and dismissing the Board shall not be different from that prescribed by the Law on Companies.

The Board is led by the Chairman of the Board. The Board shall elect the Chairman from the members of the Board.

The Board shall elect and dismiss the Head of the Company - Managing Director, fix his salary, set other terms and conditions in the employment contract with him, approve his job description, give incentives and impose penalties. The Head of the Company is in charge of organising current business activities of the company.

The Board:

REMIGIJUS JUODVIRŠIS - the Chairman of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME	CAPACITY	NOMBER OF SHARES	CAPITAL, 0/0	VOTES, 0/0
TERTIUS UAB		704,638	80	80
PANEVĖŽIO KELIAI AB	Member of the Board	531,675	28.47	28.47
LAUKTUVES JUMS UAB	Member of the Board	11,069	50.15	50.15
POKSTASTIAB		111	50	50
KLOVAINIŲ SKALDA AB		203,526	3.78	3.78
GELBERA UAB	Member of the Board	34	34	34
KELTECHA UAB	Member of the Board
EMULTEKA UAB		14	14.0	14.0
GUSTONIŲ ŽUT UAB	Member of the Board	1,057	48.98	48.98
SPECIALIZUOTA KOMPLEKTAVIMO		21,490	9.29	9.29
VALDYBA AB
NAUJASIS UŽUPIS UAB	Chairman of the Board
PANEVEZYS UAB	Member of the Board	157,191	49.98	49 98
PST INVESTICIJOS UAB	Member of the Board	16,407	4.4	4 4
KIRTIMŲ AUTOTRANSPORTAS AB	Member of the Board
CONVESTUS UAB	Vice-President, Chairman of the Board	50,000	50	રેી
ALPROKA UAB	Chairman of the Board
KAUNO TILTAI AB		492	031	0.31

Term of office: November 2010 through November 2014

No previous convictions.

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, 0/0	VOTES, %
PANEVĖŽIO KELIAI AB	Chairman of the Board	529,861	28.33	28.33
LAUKTUVES JUMS UAB	Member of the Board	11,001	49.85	49.85
POKSTAS UAB	Director	111	50.0	50.0
KLOVAINIŲ SKALDA AB	Member of the Board	203,129	3.77	3.77
GELBERA UAB	Member of the Board	34	34	34
EMULTEKA UAB		12	12.0	12.0
GUSTONIŲ ŽUT UAB	Member of the Board	1.057	48.98	48.98
PANEVEZYSUAB	Member of the Board	157,225	49.98	49.98
SPECIALIZUOTA KOMPLEKTAVIMO		21,470	9.28	9.28
VALDYBA AB
PST INVESTICIJOS UAB	Chairman of the Board, Director	12.644	2.9	2.9
NAUJASIS UŽUPIS UAB	Member of the Board
CONVESTUS UAB	President, Member of the Board	50,000	50	50
ALPROKA UAB	Member of the Board
KAUNO TILTAI UAB		492	0.31	0.31
MEINORA UAB	Director	100	100	100
SERANA UAB	Director	950	તે રે	તે રે
TERTIUS UAB		176.159	20	20
PANODEN UAB	Member of the Board

GVIDAS DROBUŽAS - the Member of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

Term of office: November 2010 through November 2014

No previous convictions.

IRMA ABRAMAVIČIENE - the Member of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, % VOTES, %
CONVESTUS UAB	Internal auditor
PANEVĖŽIO KELIAI AB	Member of the Board

Terms of office: November 2010 through November 2014

No previous convictions.

COMPANY NAME	CAPACITY	NUMBER OF SHARTES	CAPITAL, 0/0	VOTES, %
AKVALDA UAB		500	33.33	33.33
EMULTEKA UAB		11	11	11
BASS UAB		40	40	40
PANEVEZIO STATYBOS TRESTAS	Member of the
AB	Board
PANEVĖŽIO KELIAI AB	Member of the Board	101,735	5.45	5.45

VILIUS GRAŽYS - the Member of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

Terms of office: November 2010 through November 2014

No previous convictions.

ARTURAS BUCAS - the Member of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, % VOTES, %
DVARCIONIŲ KERAMIKA AB	Shareholder	356
PANEVĖŽIO KELIAI AB	Member of the
	Board

Terms of office: November 2010 through November 2014

No previous convictions.

Administration:

DALIUS GESEVICIUS - Head of the Company Administration, Managing Director. Holds 15 shares of the company. University education (VISI, 1984, construction engineering). No previous convictions.

DANGUOLE SIRVINSKIENE - Chief Accountant of the company. Holds no shares of the company. University Education (LŽUA, 1983, accounting - economics). No previous conviction.

Information on amounts of money during the accounting period (Litas):

In 2012 there were no special benefits to the members of the Board.

	Manager of the Company	Chief Accountant
Calculated amount of money	184.468	60.599

Audit committee

Following Article 52 of the Law on Audit of the Republic of Lithuania, the General Meeting of Shareholders of Panevėžio statybos trestas AB elects the audit committee. The audit committee consists of three members one of them being independent. The term of office of the audit committee is one year. The continuous term of office of a committee member cannot exceed 12 years.

The following members make the audit committee at Panevėžio statybos trestas AB - Roma Morozovienė (Panevėžio statybos trestas AB), Regina Sukarevičio statybos trestas AB) and Irena Kriaučiūnienė - an independent auditor.

17. ALL MATERIAL AGREEMENTS TO WHICH THE ISSUER IS A PARTY AND WHICH WOULD COME INTO EFFECT, BE AMENDED OR TERMINATED IN CASE OF CHANGE IN THE ISSUER'S CONTROL, ALSO THEIR IMPACT EXCEPT THE CASES WHERE THE DISCLOSURE OF THE NATURE OF THE AGREEMENTS WOULD CAUSE SIGNIFICANT DAMAGE TO THE ISSUER

None

18. ALL AGREEMENTS OF THE ISSUER AND THE MEMBERS OF ITS MANAGEMENT BODIES OR THE EMPLOYEE AGREEMENTS PROVIDING FOR A COMPENSATION IN CASE OF THE RESIGNATION OR IN CASE THEY ARE DISMISSED WITHOUT DUE REASON OR THEIR EMPLOYMENT IS TERMINATED IN VIEW OF THE CHANGE OF CONTROL OF THE ISSUER

None

19. INFORMATION ON SIGNIFICANT TRANSACTIONS BETWEEN THE RELATED PARTIES

All transactions between the related parties are provided in the Annual Financial Statements.

20. INFORMATION ON COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The information regarding compliance with the corporate governance code is presented in Appendix 1 to the Annual Report.

21. PUBLICLY DISCLOSED INFORMATION

Title of announcement	Category of announcement	Language	IDate
PST won the tender for reconstruction of the Palace of the Grand Dukes, Part B, announced by the Vilnius Castles Directorate	Notification on material event	Lt, En	8 March 2013
Unaudited Performance Results of Panevėžio statybos trestas AB and the Company Group for 2012	Notification on material event	Lt, En	27 Feb. 2013
Panevėžio statybos trestas AB information	Notification on material event	Lt, En	13 Feb. 2013
Temporary Measures of Protection Reversed	Notification on material event	Lt, En	2 Jan. 2013
Notification on Acquisition of a Block of Shares	Notification on material event	Lt, En	19 Dec. 2012
Regarding Protracted Settlement	Notification on material event	Lt, En	12 Dec. 2012
Unaudited Performance Results of Panevėžio statybos trestas AB and the Company Group for Nine Months of 2012	Notification on material event	Lt, En	30 Nov. 2012
Resolutions Adopted by Extraordinary General Meeting of Shareholders	Notification on material event	Lt. En	07 Nov. 2012
Draft Resolutions of Extraordinary General Meeting of Shareholders	Notification on material event	Lt, En	17 Oct. 2012
Convening of the Extraordinary General Meeting of Shareholders	Notification on material event	Lt, En	8 Oct. 2012
Unaudited Performance Results of Panevėžio statybos trestas AB and the Company Group for First Half of 2012	Interim information	Lt, En	31 Aug. 2012
Unaudited Performance Results of Panevėžio statybos trestas AB and the Company Group for First Quarter of 2012	Interim information	Lt, En	31 May 2012
Panevėžio statybos trestas AB has signed the contract with Baltic Fish Export UAB	Notification on material event	Lt, En	9 May 2012
Resolutions of Annual General Meeting of Shareholders	Notification on material event	Lt, En	26 April 2012
Change in Announced Preliminary Consolidated Result	Notification on material event	Lt, En	5 April 2012
Draft Resolutions of Annual General Meeting of Shareholders	Notification on material event	Lt, En	5 April 2012
Convening of Annual General Meeting of Shareholders	Notification on material event	Lt, En	26 March 2012
Revised Interim Financial Statements for 2011	Interim information	Lt, En	1 March 2012
Unaudited Performance Results of Panevėžio statybos trestas AB and the Company Group for 2011	Interim information	Lt, En	29 Feb. 2012

All notices of Panevėžio statybos trestas AB to be made public in accordance with the legal requirements are announced following the timelines prescribed by the laws and legal acts of the Republic of Lithuania. Notices of material events of the company are presented to the Securities Commission of the Republic of Lithuania, Vilnius Stock Exchange, information disclosure and disseminations system OMX Company News Service and published on the website of the company.

Managing Director

Dalius Gesevičius

Appendix to the Consolidated annual report

Disclosure form concerning the compliance with the Governance Code for the companies listed on the regulated market

The public limited liability company ,,Panevėžio statybos trestas", following Article 21 paragraph 3 of the Law on Securities of the Republic of Lithuania and item 20.5 of the Trading Rules of the Vilnius Stock Exchange, discloses its compliance with the Governance Code, approved by the VSE for the companies listed on the regulated market, and its specific provisions. In the event of non-compliance with the Code or with certain provisions thereof, it must be specified which provisions are not complied with and the reasons of non-compliance.

PRINCIPLES/ RECOMMENDATIONS Principle I: Basic Provisions shareholder value.	YES/NO NOT APPLICABLE	COMMENTARY The overriding objective of a company should be to operate in common interests of all the shareholders by optimizing over time
1.1. A company should adopt and make public the company's development strategy and objectives by clearly declaring how the company intends to meet the interests of its shareholders and optimize shareholder value.	Yes	The company's strategy and objectives are made public in the website http//www.pst.lt and notices for the Vilnius Stock Exchange and in the periodic notices to the BNS news agency, notices in the newspapers, at the press conferences.
1.2. All management bodies of a company should act in Yes furtherance of the declared strategic objectives in view of the need to optimize shareholder value.
1.3. A company's supervisory and management bodies Yes should act in close co-operation in order to attain maximum benefit for the company and its shareholders.		The board of the company is responsible not only for the strategic management of the company but also analyses and evaluates the material on all items of the company activities presented by the managers: implementation of activity strategy, activity arrangement, financial status, etc.
1.4. A company's supervisory and management bodies should ensure that the rights and interests of persons other than the company's shareholders (e.g. employees, creditors, suppliers, clients, local community), participating in or connected with the company's operation, are duly respected.	Yes

Principle II: The corporate governance framework

The corporate governance framework strategic guidance of the company, the effective oversight of the company's management bodies, an appropriate balance and distribution of functions between the company's bodies, protection of the shareholders' interests.

2.1. Besides obligatory bodies provided for in the Law on Companies of the Republic of Lithuania - a general shareholders' meeting and the chief executive officer, it is recommended that a company should set up both a collegial supervisory body and a collegial management body. The setting up of collegial bodies for supervision and management facilitates clear separation of management and supervisory functions in the company, accountability and control on the part of the chief executive officer, which, in its turn, facilitate a more efficient and transparent management process.	No	The collegial management body -- the board and one-person management body - managing director are set up in the company. The collegial supervisory body - supervisory board is not formed.
2.2. A collegial management body is responsible for the strategic management of the company and performs other key functions of corporate governance. A collegial supervisory body is responsible for the effective supervision of the company's management bodies.	No	The supervision of the company's activities and the responsibility and control of the chief executive officer are ensured by the board analyzing and evaluating the material on all items of the company activities presented by the chief executive officer.
2.3. Where a company chooses to form only one collegial body, it is recommended that it should be a supervisory body, i.e. the supervisory board. In such a case, the supervisory board is responsible for the effective monitoring of the functions performed by the company's chief executive officer.	No	One collegial management body is formed - the board that effectively supervises the functions performed by the company's chief executive officer.
2.4. The collegial supervisory body to be elected by the general shareholders' meeting should be set up and should act in the manner defined in Principles III and IV. Where a company should decide not to set up a collegial supervisory body but rather a collegial management body, i.e. the board, Principles III and IV should apply to the board as long as that does not contradict the essence and purpose of this body. '	Yes
2.5. Company's management and supervisory bodies should Yes comprise such number of board (executive directors) and supervisory (non-executive directors) board members that no individual or small group of individuals can dominate decision-making on the part of these bodies.2		The company board is made of 5 members and this number 1s considered to be sufficient.

^· Provisions of Principles III and IV are more applicable to those instances when the general shareholders' meeting elects the supervisory board, i.e. a body that is essentially formed to ensure oversight of the chief executive officer and to represent the company's shareholders. However, in case the company does not form the supervisory board but rather the board, most of the recommendations set out in Principles III and IV become important and applicable to the board as well. Furthermore, it should be noted that certain recommendations, which are in their essence and nature applicable exclusively to the supervisory board (e.g. formation of the committees), should not be competence and finctions of these bodies according to the Republic of Lithuania (Official Guzete, 2003, No 123-574) are different. For instance, item 3.1 of the Code concerning oversight of the extent it concerns the oversight of the chief excutive officer of the company, but not of the board itself; item 4.1 of the Code concerning recommendations to the extent it relates to the provision of recommendations to the executive officer; item 4.4 of the Code concerning independence of the collegial body elected by the general neeting from the company's management bodies is applied to the extent it concerns independence from the chief exceutive officer.

² Definitions 'executive director' and 'non-executive director' are used in cases when a company has only one collegial body.

2.6. Non-executive directors or members of the supervisory	No	The supervisory board is not formed.
board should be appointed for specified terms subject to
individual re-election, at maximum intervals provided for in
the Lithuanian legislation with a view to ensuring necessary
development of professional experience and sufficiently
frequent reconfirmation of their status. A possibility to
remove them should also be stipulated however this
procedure should not be easier than the removal procedure
for an executive director or a member of the management
hoard.
2.7. Chairman of the collegial body elected by the general	Yes	The chairman of the board is not and has never been the chief
shareholders' meeting may be a person whose current or		executive officer of the company.
past office constitutes no obstacle to conduct independent
and impartial supervision. Where a company should decide
not to set up a supervisory board but rather the board, it is
recommended that the chairman of the board and chief
executive officer of the company should be a different
person. Former company's chief executive officer should
not be immediately nominated as the chairman of the
collegial body elected by the general shareholders' meeting.
When a company chooses to departure from these
recommendations, it should furnish information on the
measures it has taken to ensure impartiality of the
supervision.

Principle III: The order of the formation of a collegial body to be elected by a general shareholders' meeting

The order of the formation a collegial body to be elected by a general shareholders' meeting should ensure representation of minority shareholders, accountability of this body to the shareholders and objective monitoring of the company's operation and its management bodies.3

3.1. The mechanism of the formation of a collegial body to Yes	The mechanism of the board formation ensures that the
be elected by a general shareholders' meeting (hereinafter in	minority shareholders were properly represented in the board.
this Principle referred to as the 'collegial body') should
ensure objective and fair monitoring of the company's
management bodies as well as representation of minority
shareholders.

³ Attention should be drawn to the fact that in the situation where the collegial body elected by the general shareholders' meeting is the board, it is natural that being a management body it should ensure oversight not of all management bodies of the company, but only of the single-person body of management, i.e. the company's chief executive officer. This note shall apply in respect of item 3.1 as well.

3.2. Names and surnames of the candidates to become members of a collegial body, information about their education, qualification, professional background, positions taken and potential conflicts of interest should be disclosed early enough before the general shareholders' meeting so that the shareholders would have sufficient time to make an informed voting decision. All factors affecting the candidate's independence, the sample list of which is set out in Recommendation 3.7. should be also disclosed. The collegial body should also be informed on any subsequent changes in the provided information. The collegial body should, on yearly basis, collect data provided in this item on its members and disclose this in the company's annual report.	Yes	The company collects and discloses all information about the members of the collegial body, their professional background, qualification, conflicts of interests in the periodic reports of the company that are published.
3.3. Should a person be nominated for members of a collegial body, such nomination should be followed by the disclosure of information on candidate's particular competences relevant to his/her service on the collegial body. In order shareholders and investors are able to ascertain whether member's competence is further relevant, the collegial body should, in its annual report, disclose the information on its composition and particular competences of individual members which are relevant to their service on the collegial body.	Yes
3.4 In order to maintain a proper balance in terms of the current qualifications possessed by its members, the desired composition of the collegial body shall be determined with regard to the company's structure and activities, and have this periodically evaluated. The collegial body should ensure that it is composed of members who, as a whole, have the required diversity of knowledge, judgment and experience to complete their tasks properly. The members of the audit committee, collectively, should have a recent knowledge and relevant experience in the fields of finance, accounting and/or audit for the stock exchange listed companies. At least one of the members of the remuneration committee should have knowledge of and experience in the field of remuneration policy.	Yes	The board is formed considering the company's structure and activities, the experience of its members, diversity of knowledge related to the company activities allow doing the work properly.
3.5. All new members of the collegial body should be offered a tailored program focused on introducing a member with his/her duties, corporate organization and activities. The collegial body should conduct an annual review to identify fields where its members need to update their skills and knowledge.	Yes	The new members are introduced with the company and the regulations of the company board. The members of the board constantly participate at various refresher courses and seminars where they collect information about the essential changes in the legal acts regulating the company's activities.

3.6. In order to ensure that all material conflicts of interest related with a member of the collegial body are resolved properly, the collegial body should comprise a sufficient4 number of independent' members.	No	Historically the company exhibits the situation that the sufficiency of the independent members has not been considered. As the trading of the company shares takes place actively and the minority shareholders take an active part in the management of the company, the company will seek implementation of this principle.
3.7. A member of the collegial body should be considered to be independent only if he is free of any business, family or other relationship with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment. Since all cases when member of the collegial body is likely to become dependant are impossible to list, moreover, relationships and circumstances associated with the determination of independence may vary amongst companies and the best practices of solving this problem are yet to evolve in the course of time, assessment of independence of a member of the collegial body should be based on the contents of the relationship and circumstances rather than their form. The key criteria for identifying whether a member of the collegial body can be considered to be independent are the following: 1) He/she is not an executive director or member of the board (if a collegial body elected by the general shareholders' meeting is the supervisory board) of the company or any associated company and has not been such during the last five years; 2) He/she is not an employee of the company or some any company and has not been such during the last three years, except for cases when a member of the collegial body does not belong to the senior management and was elected to the collegial body as a representative of the employees; 3) He/she is not receiving or has been not receiving significant additional remuneration from the company or associated company other than remuneration for the office in the collegial body. remuneration includes additional Such participation in share options or some other performance based pay systems; it does not include compensation payments for the previous office in the company (provided that such payment is no way related with later position) as per pension plans (inclusive of deferred compensations);	No	Four members of the Board are the members of the Board of the largest shareholder - the related company. One member of the Board works for the company that has important business relations - provided internal audit and consultancy services.

⁴ The Code does not provide for a concetent members to comprise a collegial body . Many odes in foreign the collecicle one processes the collecicle one processor the collecic concrete number of independent members (e.g. at least 1/3 of the members of the collegial body) to comprise the collegial body. However, having regard to the novelty of the institution of inders in Lithuania and potential problems in finding and electing a concere number of independent members, the Code provides for a more flexible wording and allows the companies themselves to decide what number of independent members is sufficient. Of ecod profices in a not rises in a collegial body is encouraged and will constitute an example of more suitable corporate governance.

³ It is notable that in some companies all members of the collegial body may, due to a very small number of minority shareholders, be elected by the votes of the majority shareholders. But even a member of the collegial body elected by the majority shareholders may be considered independent if he/she meets the independence criteria set out in the Code.

• 4) He/she is not a controlling shareholder or representative of such shareholder (control as defined in the Council Directive 83/349/EEC Article 1 Part 1);
• 5) He/she does not have and did not have any material business relations with the company or associated company within the past year directly or as a partner, shareholder, director or superior employee of the subject having such relationship. A subject is considered to have business relations when it is a major supplier or service provider (inclusive of financial, legal, counseling and consulting services), major client or organization receiving significant payments from the company or its group;
• 6) He/she is not and has not been, during the last three years, partner or employee of the current or former external audit company of the company or associated company;
• 7) He/she is not an executive director or member of the board in some other company where executive director of the company or member of the board (if a collegial body elected by the general shareholders' meeting is the supervisory board) is non-executive director or member of the supervisory board, he/she may not also have any other material relationships with executive directors of the company that arise from their participation in activities of other companies or bodies;
• 8) He/she has not been in the position of a member of the collegial body for over than 12 years;
• 9) He/she is not a close relative to an executive director or member of the board (if a collegial body elected by the general shareholders' meeting is the supervisory board) or to any person listed in above items 1 to 8. Close relative is considered to be a spouse (common-law spouse), children and parents.

3.8. The determination of what constitutes independence is fundamentally an issue for the collegial body itself to determine. The collegial body may decide that, despite a particular member meets all the criteria of independence laid down in this Code, he cannot be considered independent due to special personal or company-related circumstances.

3.9. Necessary information on conclusions the collegial	No
body has come to in its determination of whether a
particular member of the body should be considered to be
independent should be disclosed. When a person is
nominated to become a member of the collegial body, the
company should disclose whether it considers the person to
be independent. When a particular member of the collegial
body does not meet one or more criteria of independence set
out in this Code, the company should disclose its reasons for
nevertheless considering the member to be independent. In
addition, the company should annually disclose which
members of the collegial body it considers to be
independent.
3.10. When one or more criteria of independence set out in	No
this Code has not been met throughout the year, the
company should disclose its reasons for considering a
particular member of the collegial body to be independent.
To ensure accuracy of the information disclosed in relation
with the independence of the members of the collegial body,
the company should require independent members to have
their independence periodically re-confirmed.
3.11. In order to remunerate members of a collegial body for	Yes	The company has remunerated the members of the board for
their work and participation in the meetings of the collegial		their work for the year 2012 from the company's funds and
body, they may be remunerated from the company's funds. .		plans to do this in future. The general meeting of the
The general shareholders' meeting should approve the		shareholders approves the following amount for remuneration.
amount of such remuneration.

Principle IV: The duties and liabilities of a collegial body elected by the general shareholders' meeting

The corporate governance framework should ensure proper and effective functioning of the collegial body elected by the general shareholders' meeting, and the powers granted to the collegial body should ensure effective monitoring of the company's management bodies and protection of interests of all the company's shareholders.

4.1. The collegial body elected by the general shareholders'	Yes	Once a quarter the board hear out the report of the chief
meeting (hereinafter in this Principle referred to as the		executive officer and the finance director of the company,
'collegial body') should ensure integrity and transparency of		analyzes their activity and evaluates its effectiveness and
the company's financial statements and the control system.		provides recommendations, if required. The board analyzes,
The collegial body should issue recommendations to the		evaluates the draft of annual financial accountability of the
company's management bodies and monitor and control the		company and draft profit (loss) allocation, and presents them
company's management performance.8		to the general meeting of the shareholders.

⁶ It is notable that currently it is not yet completely clear, in what form members of the board may be remunerated for their work in these bodies. The Law on Companies of the Republic of Lithuania (Official Gazette, 2003, No 123-5574) provides that members of the supervisory board or the board may be remunerated for their work in the board by payment of annual bonuses (tantiems) in the manner prescribed by Article 59 of this Law, i.e. from the company's profit. The current wording, contrary to the wording effective before 1 January 2004, eliminates the exclusive requirement that annual bonuses (tantiems) should be the only form of the company's compensation to members of the supervisory board or the board. So it seems that the Law contains no prohibition to remuners of the supervisory board or their work in other forms, besides bonuses, although this possibility is not expressly stated either.

⁷ See Footnote 3.

⁸ See Footnote 3. In the event the collegial body elected by the general shareholders' meeting is the board, it should provide recommendations to the company's single-person body of management, i.e. the company's chief executive officer.

4.2. Members of the collegial body should act in good faith, with care and responsibility for the benefit and in the interests of the company and its shareholders with due regard to the interests of employees and public welfare. Independent members of the collegial body should (a) under all circumstances maintain independence of their analysis, decision-making and actions (b) do not seek and accept any unjustified privileges that might compromise their independence, and (c) clearly express their objections should a member consider that decision of the collegial body is against the interests of the company. Should a collegial body have passed decisions independent member has serious doubts about, the member should make adequate conclusions. Should an independent member resign from his office, he should explain the reasons in a letter addressed to the collegial body or audit committee and, if necessary, respective company-not-pertaining body (institution).	Yes
4.3. Each member should devote sufficient time and attention to perform his duties as a member of the collegial body. Each member of the collegial body should limit other professional obligations of his (in particular any directorships held in other companies) in such a manner they do not interfere with proper performance of duties of a member of the collegial body. In the event a member of the collegial body should be present in less than a half of the meetings of the collegial body throughout the financial year of the company, shareholders of the company should be notified.	Yes	The members of the company board participated at the meetings of the board and each member gave enough time to perform the duties of a board member.
4.4. Where decisions of a collegial body may have a different effect on the company's shareholders, the collegial body should treat all shareholders impartially and fairly. It should ensure that shareholders are properly informed on the company's affairs, strategies, risk management and resolution of conflicts of interest. The company should have a clearly established role of members of the collegial body when communicating with and committing to shareholders.	Yes
4.5. It is recommended that transactions (except insignificant ones due to their low value or concluded when carrying out routine operations in the company under usual conditions), concluded between the company and its shareholders, members of the supervisory or managing bodies or other natural or legal persons that exert or may exert influence on the company's management should be subject to approval of the collegial body. The decision concerning approval of such transactions should be deemed adopted only provided the majority of the independent members of the collegial body voted for such a decision.	Yes

⁹ It is notable that companies can make this requirement and provide that shareholders should be informed about failure to participate at the meetings of the collegial body if, for instance, a member of the collegial body participated at less than 2/3 or 3/4 of the meetings. Such measures, which ensure active pation in the meetings of the collegial body, are encouraged and will constitute an example of more suitable corporate governance.

4.6. The collegial body should be independent in passing Yes
	decisions that are significant for the company's operations
	and strategy. Taken separately, the collegial body should be
	independent of the company's management bodies".
	Members of the collegial body should act and pass decisions
	without an outside influence from the persons who have
	elected it. Companies should ensure that the collegial body
	and its committees are provided with sufficient
	administrative and financial resources to discharge their
	duties, including the right to obtain, in particular from
	employees of the company, all the necessary information or
	to seek independent legal, accounting or any other advice on
	issues pertaining to the competence of the collegial body
	and its committees. When using the services of a consultant
	with a view to obtaining information on market standards
	for remuneration systems, the remuneration committee
	should ensure that the consultant concerned does not at the
	same time advice the human resources department,
	executive directors or collegial management organs of the
	company concerned.

¹⁰ In the event the collegial body elected by the general shareholders' meeting is the recommendation concerning its independence from the company's management bodies applies to the independence from the company's chief executive officer.

4.7. Activities of the collegial body should be organized in a manner that independent members of the collegial body could have major influence in relevant areas where chances of occurrence of conflicts of interest are very high. Such areas to be considered as highly relevant are issues of nomination of company's directors, determination of directors' remuneration and control and assessment of company's audit. Therefore when the mentioned issues are attributable to the competence of the collegial body, it is recommended that the collegial body should establish nomination, remuneration, and audit committees11. Companies should ensure that the functions attributable to the nomination, remuneration, and audit committees are carried out. However they may decide to merge these functions and set up less than three committees. In such case a company should explain in detail reasons behind the selection of alternative approach and how the selected approach complies with the objectives set forth for the three different committees. Should the collegial body of the company comprise small number of members, the functions assigned to the three committees may be performed by the collegial body itself, provided that it meets composition requirements advocated for the committees and that adequate information is provided in this respect. In such case provisions of this Code relating to the committees of the collegial body (in particular with respect to their role, operation, and transparency) should apply, where relevant, to the collegial body as a whole.	No	The collegial body of the company's management is a board performing the functions of the nomination, remuneration committees. The Board of the company chooses and approves the candidacy of the manager of the company - Managing Director, and agrees with the candidacies of directors of the company offered by the Managing Director It constantly evaluates their experience, professional capabilities and implementation of the company's strategic goals, hears out the reports. The board of the company selects the candidate for the external audit and provides proposals to the general shareholders' meeting for approval. On 26 April 2012 the audit committee was elected during the Annual General Meeting of the Shareholders.
4.8. The key objective of the committees is to increase efficiency of the activities of the collegial body by ensuring that decisions are based on due consideration, and to help organize its work with a view to ensuring that the decisions it takes are free of material conflicts of interest. Committees should exercise independent judgement and integrity when exercising its functions as well as present the collegial body with recommendations concerning the decisions of the collegial body. Nevertheless the final decision shall be adopted by the collegial body. The recommendation on creation of committees is not intended, in principle, to constrict the competence of the collegial body or to remove the matters considered from the purview of the collegial body itself, which remains fully responsible for the decisions taken in its field of competence.	Yes

^1-1The Law of the Republic of Lithuania on Audit (Official Gazette, 2008, No 82-5323) determines that an Audit Committee shall be formed in each public interest entity (including, but not limited to public companies whose securities are traded in the regulated market of the Republic of Lithuania and/or any other member state ).

4.9. Committees established by the collegial body should normally be composed of at least three members. In companies with small number of members of the collegial body, they could exceptionally be composed of two members. Majority of the members of each committee should be constituted from independent members of the collegial body. In cases when the company chooses not to set up a supervisory board, remuneration and audit committees should be entirely comprised of non-executive directors. Chairmanship and membership of the committees should be decided with due regard to the need to ensure that committee membership is refreshed and that undue reliance is not placed on particular individuals. Chairmanship and membership of the committees should be decided with due regard to the need to ensure that committee membership is refreshed and that undue reliance is not placed on particular individuals.	Yes	The audit committee consists of three members. One member conforms to the requirements for independence. The audit committee is elected for the period of one year.
4.10. Authority of each of the committees should be determined by the collegial body. Committees should perform their duties in line with authority delegated to them and inform the collegial body on their activities and performance on regular basis. Authority of every committee stipulating the role and rights and duties of the committee should be made public at least once a year (as part of the information disclosed by the company annually on its corporate governance structures and practices). Companies should also make public annually a statement by existing committees on their composition, number of meetings and attendance over the year, and their main activities. Audit committee should confirm that it is satisfied with the independence of the audit process and describe briefly the actions it has taken to reach this conclusion.	Yes	The rules of the audit committee were approved and published on the website of the company
4.11. In order to ensure independence and impartiality of the committees, members of the collegial body that are not members of the committee should commonly have a right to participate in the meetings of the committee only if invited by the committee. A committee may invite or demand participation in the meeting of particular officers or experts. Chairman of each of the committees should have a possibility to maintain direct communication with the shareholders. Events when such are to be performed should be specified in the regulations for committee activities.	Yes	Applicable to the audit committee

4.12. Nomination Committee. 4.12.1. Key functions of the nomination committee should be the following:	Not applicable	The committee is not formed.
· Identify and recommend, for the approval of the collegial body, candidates to fill board vacancies. The nomination committee should evaluate the balance of skills, knowledge and experience on the management body, prepare a description of the roles and capabilities required to assume a particular office, and assess the time commitment expected. Nomination committee can also consider candidates to members of the collegial body delegated by the shareholders of the company; · Assess on regular basis the structure, size, composition and performance of the supervisory and management bodies, and make recommendations to the collegial body regarding the means of achieving necessary changes; · Assess on regular basis the skills, knowledge and experience of individual directors and report on this to the collegial body; · Properly consider issues related to succession planning; · Review the policy of the management bodies for selection and appointment of senior management. 4.12.2. Nomination committee should consider proposals by other parties, including management and shareholders. When dealing with issues related to executive directors or members of the board (if a collegial body elected by the
general shareholders' meeting is the supervisory board) and senior management, chief executive officer of the company should be consulted by, and entitled to submit proposals to the nomination committee.
4.13. Remuneration Committee. 4.13.1. Key functions of the remuneration committee should be the following: · Make proposals, for the approval of the collegial body, on the remuneration policy for members of management bodies and executive directors. Such policy should address all forms of compensation, including the fixed remuneration, performance-based remuneration schemes, pension arrangements, and termination payments. Proposals considering performance-based remuneration schemes should be accompanied with recommendations on the related objectives and evaluation criteria, with a view to properly aligning the pay of executive director and members of the management bodies with the long-term interests of the shareholders and the objectives set by the collegial body; · Make proposals to the collegial body on the individual remuneration for executive directors and member of management bodies in order their remunerations are consistent with company's remuneration policy and the evaluation of the performance of these persons concerned. In doing so, the committee should be properly informed on the total compensation obtained by executive directors and members of the management bodies from the affiliated companies; · Ensure that remuneration of individual executive directors or members of management body is proportionate to the remuneration of other executive directors or members of management body and other staff members of the company; · Periodically review the remuneration policy for executive directors or members of management body, including the policy regarding share-based remuneration, and its implementation;	Not applicable	The committee is not formed.

· Make proposals to the collegial body on suitable forms of contracts for executive directors and members of the management bodies; · Assist the collegial body in overseeing how the company complies with applicable provisions regarding the remuneration-related information disclosure (in particular the remuneration policy applied and individual remuneration of directors); · Make general recommendations to the executive directors and members of the management bodies on the level and structure of remuneration for senior management (as defined by the collegial body) with regard to the respective information provided by the executive directors and members of the management bodies. 4.13.2. With respect to stock options and other share-based incentives which may be granted to directors or other employees, the committee should: · Consider general policy regarding the granting of the above mentioned schemes, in particular stock options, and make any related proposals to the collegial body; · Examine the related information that is given in the company's annual report and documents intended for the use during the shareholders meeting; · Make proposals to the collegial body regarding the choice between granting options to subscribe shares or granting options to purchase shares, specifying the reasons for its choice as well as the consequences that this choice has. 4.13.3. Upon resolution of the issues attributable to the competence of the remuneration committee, the committee should at least address the chairman of the collegial body
and/or chief executive officer of the company for their
opinion on the remuneration of other executive directors or members of the management bodies. 4.13.4. The remuneration committee should report on the exercise of its functions to the shareholders and be present at the annual general meeting for this purpose.

4.14. Audit Committee.	Yes	On 26 April 2012 the audit committee was elected during the
		Annual General Meeting of the Shareholders. The audit
4.14.1. Key functions of the audit committee should be the following:		committee consists of three members. The audit committee
· Observe the integrity of the financial information provided		organizes its work following the rules of the audit committee
by the company, in particular by reviewing the relevance		approved during the meeting of the shareholders.
and consistency of the accounting methods used by the
company and its group (including the criteria for the
consolidation of the accounts of companies in the group);
· At least once a year review the systems of internal control
and risk management to ensure that the key risks (inclusive
of the risks in relation with compliance with existing laws
and regulations) are properly identified, managed and reflected in the information provided;
· Ensure the efficiency of the internal audit function, among
other things, by making recommendations on the selection,
appointment, reappointment and removal of the head of the
internal audit department and on the budget of the
department, and by monitoring the responsiveness of the
management to its findings and recommendations. Should
there be no internal audit authority in the company, the need
for one should be reviewed at least annually; · Make recommendations to the collegial body related with
selection, appointment, reappointment and removal of the
external auditor (to be done by the general shareholders'
meeting) and with the terms and conditions of his
engagement. The committee should investigate situations
that lead to a resignation of the audit company or auditor
and make recommendations on required actions in such
situations;
· Monitor independence and impartiality of the external
auditor, in particular by reviewing the audit company's compliance with applicable guidance relating to the rotation
of audit partners, the level of fees paid by the company, and
similar issues. In order to prevent occurrence of material
conflicts of interest, the committee, based on the auditor's
disclosed inter alia data on all remunerations paid by the
company to the auditor and network, should at all times
monitor nature and extent of the non-audit services. Having
regard to the principals and guidelines established in the 16
May 2002 Commission Recommendation 2002/590/EC, the
committee should determine and apply a formal policy establishing types of non-audit services that are (a)
excluded, (b) permissible only after review by the
committee, and (c) permissible without referral to the
committee;
· Review efficiency of the external audit process and
responsiveness of management to recommendations made in
the external auditor's management letter.
4.14.2. All members of the committee should be furnished
with complete information on particulars of accounting,
financial and other operations of the company. Company's
management should inform the audit committee of the
methods used to account for significant and unusual
transactions where the accounting treatment may be open to
different approaches. In such case a special consideration
should be given to company's operations in offshore centers
and/or activities carried out through special purpose vehicles
(organizations) and justification of such operations.
4.14.3. The audit committee should decide whether
participation of the chairman of the collegial body, chief
executive officer of the company, chief financial officer (or
superior employees in charge of finances, treasury and
accounting), or internal and external auditors in the
meetings of the committee is required (if required, when).

The committee should be entitled, when needed, to meet with any relevant person without executive directors and members of the management bodies present. 4.14.4. Internal and external auditors should be secured with not only effective working relationship with management, but also with free access to the collegial body. For this purpose the audit committee should act as the principal
contact person for the internal and external auditors. 4.14.5. The audit committee should be informed of the internal auditor's work program, and should be furnished with internal audit's reports or periodic summaries. The audit committee should also be informed of the work program of the external auditor and should be furnished with report disclosing all relationships between the independent auditor and the company and its group. The committee should be timely furnished information on all issues arising from the audit.
4.14.6. The audit committee should examine whether the company is following applicable provisions regarding the possibility for employees to report alleged significant irregularities in the company, by way of complaints or through anonymous submissions (normally to an independent member of the collegial body), and should ensure that there is a procedure established for proportionate and independent investigation of these issues and for appropriate follow-up action.
4.14.7. The audit committee should report on its activities to the collegial body at least once in every six months, at the time the yearly and half-yearly statements are approved.
4.15. Every year the collegial body should conduct the assessment of its activities. The assessment should include evaluation of collegial body's structure, work organization and ability to act as a group, evaluation of each of the collegial body member's and committee's competence and work efficiency and assessment whether the collegial body has achieved its objectives. The collegial body should, at least once a year, make public (as part of the information the company annually discloses on its management structures and practices) respective information on its internal organization and working procedures, and specify what material changes were made as a result of the assessment of the collegial body of its own activities.	No

Principle V: The working procedure of the company's collegial bodies

The working procedure of supervisory and management bodies established in the company should ensure efficient operation of these bodies and decision-making and encourage active co-operation between the company's bodies.

5.1. The company's supervisory and management bodies (hereinafter in this Principle the concept 'collegial bodies' covers both the collegial bodies of supervision and the collegial bodies of management) should be chaired by chairpersons of these bodies. The chairperson of a collegial body is responsible for proper convocation of the collegial body meetings. The chairperson should ensure that information about the meeting being convened and its agenda are communicated to all members of the body. The chairperson of a collegial body should ensure appropriate conducting of the meetings of the collegial body. The chairperson should ensure order and working atmosphere during the meeting.	Yes
5.2. It is recommended that meetings of the company's collegial bodies should be carried out according to the schedule approved in advance at certain intervals of time. Each company is free to decide how often to convene meetings of the collegial bodies, but it is recommended that these meetings should be convened at such intervals, which would guarantee an interrupted resolution of the essential corporate governance issues. Meetings of the company's supervisory board should be convened at least once in a quarter, and the company's board should meet at least once a month 12.	Yes	The meeting of the company's collegial body - the board takes place based on the periodicity approved in advance and in accordance with the planned agenda.
5.3. Members of a collegial body should be notified about Yes the meeting being convened in advance in order to allow sufficient time for proper preparation for the issues on the agenda of the meeting and to ensure fruitful discussion and adoption of appropriate decisions. Alongside with the notice about the meeting being convened, all the documents relevant to the issues on the agenda of the meeting should be submitted to the members of the collegial body. The agenda of the meeting should not be changed or supplemented during the meeting, unless all members of the collegial body are present or certain issues of great importance to the company require immediate resolution.		Each member of the board can introduce himself/herself to the documents of the meeting, reports, and draft decisions three days prior to the meeting day.

¹⁷ The frequency of meetings of the collegial body provided for in the recommendation must be applied in those cases when both additional collegial bodies are formed at the company, the board and the supervisory board. In the event only one additional collegial body is formed in the company, the frequency of its meetings may be as established for the supervisory board, i.e. at least once in a quarter.

5.4. In order to co-ordinate operation of the company's	Not	The supervisory board is not formed.
collegial bodies and ensure effective decision-making	applicable
process, chairpersons of the company's collegial bodies of
supervision and management should closely co-operate by
co-coordinating dates of the meetings, their agendas and
resolving other issues of corporate governance. Members of
the company's board should be free to attend meetings of
the company's supervisory board, especially where issues
concerning removal of the board members, their liability or
remuneration are discussed.

Principle VI: The equitable treatment of shareholders and shareholder rights

The corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. The corporate governance framework should protect the rights of the shareholders.

6.1. It is recommended that the company's capital should consist only of the shares that grant the same rights to voting, ownership, dividend and other rights to all their holders.	Yes	The company's capital is comprised from ordinary registered shares granting equal personal and non-property rights to their owners.
6.2. It is recommended that investors should have access to the information concerning the rights attached to the shares of the new issue or those issued earlier in advance, i.e. before they purchase shares.	Yes
6.3. Transactions that are important to the company and its shareholders, such as transfer, investment, and pledge of the company's assets or any other type of encumbrance should be subject to approval of the general shareholders' meeting.15 All shareholders should be furnished with equal opportunity to familiarize with and participate in the decision-making process when significant corporate issues, including approval of transactions referred to above, are discussed.	No	The Articles of Association do not assign the decision making to the general shareholders' meeting if they are related to the long-term assets the balance sheet value of which is higher than 1/20 of the company's authorized capital, investment transfer, rent, mortgage, purchase, etc.
6.4. Procedures of convening and conducting a general shareholders' meeting should ensure equal opportunities for the shareholders to effectively participate at the meetings and should not prejudice the rights and interests of the shareholders. The venue, date, and time of the shareholders' meeting should not hinder wide attendance of the shareholders.	Yes	The place, date and time of the general shareholders' meeting are chosen in a manner ensuring the possibilities to all shareholders to attend the shareholders' meeting actively. The shareholders are informed about the convening of the general shareholders' meeting in public and no later than 21 days prior to the meeting the shareholders are allowed to familiarize themselves to the draft resolutions.

¹³ The Law on Companies of the Republic of Lithuania (Official Guzette, 2003, No 123-5574) no longer assigns resolutions concerning the investment, transfer, lease, mortgage or acquisition of the long-terms assess accounting for more than 1/20 of the company's authorised capital to the competence of the general shareholders' meeting. However, transactions that are important and material for the company's activity should be considered and approved by the general shareholders' meeting. The Law on Companies contains no prohibition to this effect either. Yet, in order not to encumber the company's activity and escape an unreasonably frequent consideration of transactions at the meetings, companies are free to establish their own criterial transactions, which are subject to the approval of the meeting. While establishing these criteria of material transactions, companies may follow the criteria set out in items 3, 4, 5 and 6 of paragraph 4 of Article 34 of the Law on Companies or derogate from them in view of the specific nature of their operation and their attempt to ensure uninterrupted, efficient functioning of the company.

6.5. If is possible, in order to ensure shareholders living abroad the right to access to the information, it is recommended that documents on the course of the general shareholders' meeting should be placed on the publicly accessible website of the company not only in Lithuanian language, but in English and /or other foreign languages in advance. It is recommended that the minutes of the general shareholders' meeting after signing them and/or adopted resolutions should be also placed on the publicly accessible website of the company. Seeking to ensure the right of foreigners to familiarize with the information, whenever feasible, documents referred to in this recommendation should be published in Lithuanian, English and/or other foreign languages. Documents referred to in this recommendation may be published on the publicly accessible website of the company to the extent that publishing of these documents is not detrimental to the company or the company's commercial secrets are not revealed.	Yes
6.6. Shareholders should be furnished with the opportunity to vote in the general shareholders' meeting in person and in absentia. Shareholders should not be prevented from voting in writing in advance by completing the general voting ballot.	Yes	Each shareholder can participate in the meeting in person or delegating the participation to some other person.
6.7. With a view to increasing the shareholders' opportunities to participate effectively at shareholders' meetings, the companies are recommended to expand use of modern technologies by allowing the shareholders to participate and vote in general meetings via electronic means of communication. In such cases security of transmitted information and a possibility to identify the identity of the participating and voting person should be guaranteed. Moreover, companies could furnish its shareholders, especially shareholders living abroad, with the opportunity to watch shareholder meetings by means of modern technologies.	No

Principle VII: The avoidance of conflicts of interest and their disclosure

The corporate governance framework should encourage members of the corporate bodies to avoid conflicts of interest and assure transparent and effective mechanism of disclosure of conflicts of interest regarding members of the corporate bodies.

7.1. Any member of the company's supervisory and Yes
management body should avoid a situation, in which his/her
personal interests are in conflict or may be in conflict with
the company's interests. In case such a situation did occur, a
member of the company's supervisory and management
body should, within reasonable time, inform other members
of the same collegial body or the company's body that has
elected him/her, or to the company's shareholders about a
situation of a conflict of interest, indicate the nature of the
conflict and value, where possible.

7.2. Any member of the company's supervisory and	Yes
management body may not mix the company's assets, the
use of which has not been mutually agreed upon, with
his/her personal assets or use them or the information which
he/she learns by virtue of his/her position as a member of a
corporate body for his/her personal benefit or for the benefit
of any third person without a prior agreement of the general
shareholders' meeting or any other corporate body
authorized by the meeting.
7.3. Any member of the company's supervisory and Yes
management body may conclude a transaction with the
company, a member of a corporate body of which he/she is.
Such a transaction (except insignificant ones due to their
low value or concluded when carrying out routine
operations in the company under usual conditions) must be
immediately reported in writing or orally, by recording this
in the minutes of the meeting, to other members of the same
corporate body or to the corporate body that has elected
him/her or to the company's shareholders. Transactions
specified in this recommendation are also subject to
recommendation 4.5.
7.4. Any member of the company's supervisory and	Yes
management body should abstain from voting when
decisions concerning transactions or other issues of personal
or business interest are voted on.

Principle VIII: Company's remuneration policy

Remuneration policy and procedure for approval, revision and disclosure of directors' remuneration established in the company should prevent potential conflicts of interest and abuse in determining remuneration of directors, in addition it should ensure publicity and transparency both of company's remuneration policy and remuneration of directors.

8.1. A company should make a public statement of the No company's remuneration policy (hereinafter the remuneration statement) which should be clear and easily understandable. This remuneration statement should be published as a part of the company's annual statement as		The company observes the motivation system of the directors approved by the Board.
well as posted on the company's website.
8.2. Remuneration statement should mainly focus on directors' remuneration policy for the following year and, if appropriate, the subsequent years. The statement should contain a summary of the implementation of the remuneration policy in the previous financial year. Special attention should be given to any significant changes in company's remuneration policy as compared to the previous financial year.	No	Recommendations provided in item 8.1 are not followed.

8.3. Remuneration statement should leastwise include the	No	Recommendations provided in item 8.1 are not followed.
following information:
· Explanation of the relative importance of the variable and
non-variable components of directors' remuneration;
· Sufficient information on performance criteria that entitles
directors to share options, shares or variable components of
remuneration;
· An explanation how the choice of performance criteria
contributes to the long-term interests of the company;
· An explanation of the methods, applied in order to
determine whether performance criteria have been fulfilled;
· Sufficient information on deferment periods with regard to
variable components of remuneration;
· Sufficient information on the linkage between the
remuneration and performance;
· The main parameters and rationale for any annual bonus
scheme and any other non-cash benefits;
· Sufficient information on the policy regarding termination
payments;
· Sufficient information with regard to vesting periods for
share-based remuneration, as referred to in point 8.13 of this
Code;
· Sufficient information on the policy regarding retention of
shares after vesting, as referred to in point 8.15 of this Code;
· Sufficient information on the composition of peer groups
of companies the remuneration policy of which has been
examined in relation to the establishment of the
remuneration policy of the company concerned;
· A description of the main characteristics of supplementary
pension or early retirement schemes for directors;
· Remuneration statement should not include commercially
sensitive information.
8.4. Remuneration statement should also summarize and	No	Recommendations provided in item 8.1 are not followed.
explain company's policy regarding the terms of the
contracts executed with executive directors and members of
the management bodies. It should include, inter alia,
information on the duration of contracts with executive
directors and members of the management bodies, the
applicable notice periods and details of provisions for
termination payments linked to early termination under
contracts for executive directors and members of the
management bodies.

8.5. Remuneration statement should also contain detailed
information on the entire amount of remuneration, inclusive	No	Recommendations provided in item 8.1 are not followed.
of other benefits, that was paid to individual directors over
the relevant financial year. This document should list at
least the information set out in items 8.5.1 to 8.5.4 for each
person who has served as a director of the company at any
time during the relevant financial year.
8.5.1. The following remuneration and/or emoluments-
related information should be disclosed:
· The total amount of remuneration paid or due to the
director for services performed during the relevant financial
year, inclusive of, where relevant, attendance fees fixed by
the annual general shareholders meeting;
· The remuneration and advantages received from any
undertaking belonging to the same group;
· The remuneration paid in the form of profit sharing and/or
bonus payments and the reasons why such bonus payments
and/or profit sharing were granted;
· If permissible by the law, any significant additional
remuneration paid to directors for special services outside
the scope of the usual functions of a director;
· Compensation receivable or paid to each former executive
director or member of the management body as a result of
his resignation from the office during the previous financial
year;
· Total estimated value of non-cash benefits considered as
remuneration, other than the items covered in the above
points.
8.5.2. As regards shares and/or rights to acquire share
options and/or all other share-incentive schemes, the
following information should be disclosed:
· The number of share options offered or shares granted by
the company during the relevant financial year and their
conditions of application;
· The number of shares options exercised during the relevant
financial year and, for each of them, the number of shares
involved and the exercise price or the value of the interest in
the share incentive scheme at the end of the financial year;
· The number of share options unexercised at the end of the
financial year; their exercise price, the exercise date and the
main conditions for the exercise of the rights;
· All changes in the terms and conditions of existing share
options occurring during the financial year.
8.5.3. The following supplementary pension schemes-
related information should be disclosed:
· When the pension scheme is a defined-benefit scheme,
changes in the directors' accrued benefits under that scheme
during the relevant financial year;
· When the pension scheme is defined-contribution scheme,
detailed information on contributions paid or payable by the
company in respect of that director during the relevant
financial year.
8.5.4. The statement should also state amounts that the
company or any subsidiary company or entity included in
the consolidated annual financial report of the company has
paid to each person who has served as a director in the
company at any time during the relevant financial year in
the form of loans, advance payments or guarantees,
including the amount outstanding and the interest rate.

8.6. Where the remuneration policy includes variable components of remuneration, companies should set limits on the variable component(s). The non-variable component of remuneration should be sufficient to allow the company to withhold variable components of remuneration when performance criteria are not met.	Yes	The motivation system of the directors defining evaluation criteria of performance results has been approved in the company since 9 March 2007.
8.7. Award of variable components of remuneration should Yes be subject to predetermined and measurable performance criteria.		The motivation system of the directors defining evaluation criteria of performance results has been approved in the company since 9 March 2007.
8.8. Where a variable component of remuneration is Yes awarded, a major part of the variable component should be deferred for a minimum period of time. The part of the variable component subject to deferment should be determined in relation to the relative weight of the variable component compared to the non-variable component of remuneration.		The motivation system of the directors defining evaluation criteria of performance results has been approved in the company since 9 March 2007.
8.9. Contractual arrangements with executive or managing directors should include provisions that permit the company to reclaim variable components of remuneration that were awarded on the basis of data which subsequently proved to be manifestly misstated.	No
8.10. Termination payments should not exceed a fixed amount or fixed number of years of annual remuneration, which should, in general, not be higher than two years of the non-variable component of remuneration or the equivalent thereof.	No	Redundancy pay are allowed following the law of the Republic of Lithuania
8.11. Termination payments should not be paid if the termination is due to inadequate performance.	No	Redundancy pay are allowed following the law of the Republic of Lithuania
8.12. The information on preparatory and decision-making processes, during which a policy of remuneration of directors is being established, should also be disclosed. Information should include data, if applicable, on authorities and composition of the remuneration committee, names and sumames of external consultants whose services have been used in determination of the remuneration policy as well as the role of shareholders' annual general meeting.	No	Recommendations provided in item 8.1 are not followed
8.13. Shares should not vest for at least three years after their award.	Not applicable
8.14. Share options or any other right to acquire shares or to be remunerated on the basis of share price movements should not be exercisable for at least three years after their award. Vesting of shares and the right to exercise share options or any other right to acquire shares or to be remunerated on the basis of share price movements, should be subject to predetermined and measurable performance criteria.	Not applicable

8.15. After vesting, directors should retain a number of	Not
shares, until the end of their mandate, subject to the need to	applicable
finance any costs related to acquisition of the shares. The
number of shares to be retained should be fixed, for
example, twice the value of total annual remuneration (the
non-variable plus the variable components).
8.16. Remuneration of non-executive or supervisory	Not
directors should not include share options.	applicable
8.17. Shareholders, in particular institutional shareholders,	Not
should be encouraged to attend general meetings where	applicable
appropriate and make considered use of their votes
regarding directors' remuneration.
8.18. Without prejudice to the role and organization of the	Not
relevant bodies responsible for setting directors'	applicable
remunerations, the remuneration policy or any other
significant change in remuneration policy should be
included into the agenda of the shareholders' annual general
meeting. Remuneration statement should be put for voting
in shareholders' annual general meeting. The vote may be
either mandatory or advisory.
8.19. Schemes anticipating remuneration of directors in	Not
shares, share options or any other right to purchase shares or	applicable
be remunerated on the basis of share price movements
should be subject to the prior approval of shareholders'
annual general meeting by way of a resolution prior to their
adoption. The approval of scheme should be related with the
scheme itself and not to the grant of such share-based
benefits under that scheme to individual directors. All
significant changes in scheme provisions should also be
subject to shareholders' approval prior to their adoption; the
approval decision should be made in shareholders' annual
general meeting. In such case shareholders should be
notified on all terms of suggested changes and get an
explanation on the impact of the suggested changes.
8.20. The following issues should be subject to approval by	Not
the shareholders' annual general meeting:	applicable
· Grant of share-based schemes, including share options, to
directors;
· Determination of maximum number of shares and main
conditions of share granting;
· The term within which options can be exercised;
· The conditions for any subsequent change in the exercise
of the options, if permissible by law;
· All other long-term incentive schemes for which directors
are eligible and which are not available to other employees
of the company under similar terms. Annual general
meeting should also set the deadline within which the body
responsible for remuneration of directors may award
compensations listed in this article to individual directors.

8.21. Should national law or company's Articles of	Not
Association allow, any discounted option arrangement under	applicable
which any rights are granted to subscribe to shares at a price
lower than the market value of the share prevailing on the
day of the price determination, or the average of the market
values over a number of days preceding the date when the
exercise price is determined, should also be subject to the
shareholders' approval.
8.22. Provisions of Articles 8.19 and 8.20 should not be	Not
applicable to schemes allowing for participation under	applicable
similar conditions to company's employees or employees of
any subsidiary company whose employees are eligible to
participate in the scheme and which has been approved in
the shareholders' annual general meeting.
8.23. Prior to the annual general meeting that is intended to	Not
consider decision stipulated in Article 8.19, the shareholders	applicable
must be provided an opportunity to familiarize with draft
resolution and project-related notice (the documents should
be posted on the company's website). The notice should
contain the full text of the share-based remuneration
schemes or a description of their key terms, as well as full
names of the participants in the schemes. Notice should also
specify the relationship of the schemes and the overall
remuneration policy of the directors. Draft resolution must
have a clear reference to the scheme itself or to the summary
of its key terms. Shareholders must also be presented with
information on how the company intends to provide for the
shares required to meet its obligations under incentive
schemes. It should be clearly stated whether the company
intends to buy shares in the market, hold the shares in
reserve or issue new ones. There should also be a summary
on scheme-related expenses the company will suffer due to
the anticipated application of the scheme. All information
given in this article must be posted on the company's
website.

Principle IX: The role of stakeholders in corporate governance

The corporate governance framework should recognize the rights of stakeholders as established by law and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial sustainability. For the purposes of this Principle, the concept "stakeholders" includes investors, employees, creditors, suppliers, clients, local community and other persons having certain interest in the company concerned.

9.1. The corporate governance framework should assure Yes
that the rights of stakeholders that are protected by law are
respected.

9.2. The corporate governance framework should create No
conditions for the stakeholders to participate in corporate
governance in the manner prescribed by law. Examples of
mechanisms of stakeholder participation in corporate
governance include: employee participation in adoption of
certain key decisions for the company; consulting the
employees on corporate governance and other important
issues; employee participation in the company's share
capital; creditor involvement in governance in the context
of the company's insolvency, etc.
9.3. Where stakeholders participate in the corporate	No
governance process, they should have access to relevant
information.

Principle X: Information disclosure and transparency

The corporate governance framework should ensure that timely and accurate is made on all material information regarding the company, including the financial situation, performance and governance of the company.

10.1. The company should disclose information on: · The financial and operating results of the company; · Company objectives; · Persons holding by the right of ownership or in control of a block of shares in the company; · Members of the company's supervisory and management bodies, chief executive officer of the company and their remuneration; · Material foreseeable risk factors; · Transactions between the company and connected persons, as well as transactions concluded outside the course of the company's regular operations; · Material issues regarding employees and other stakeholders; · Governance structures and strategy. This list should be deemed as a minimum recommendation, while the companies are encouraged not to limit themselves to disclosure of the information specified in this list.	Y es
10.2. It is recommended to the company, which is the parent of other companies, that consolidated results of the	Y es
whole group to which the company belongs should be
disclosed when information specified in item 1 of
Recommendation 10.1 is under disclosure.
10.3. It is recommended that information on the professional background, qualifications of the members of supervisory and management bodies, chief executive officer of the company should be disclosed as well as potential conflicts of interest that may have an effect on their decisions when information specified in item 4 of Recommendation 10.1 about the members of the company's supervisory and management bodies is under disclosure. It is also recommended that information about the amount of remuneration received from the company and other income should be disclosed with regard to members of the company's supervisory and management bodies and chief executive officer as per Principle VIII.	Yes

10.4. It is recommended that information about the links between the company and its stakeholders, including employees, creditors, suppliers, local community, as well as the company's policy with regard to human resources, employee participation schemes in the company's share capital, etc. should be disclosed when information specified in item 7 of Recommendation 10.1 is under disclosure.	Yes
10.5. Information should be disclosed in such a way that neither shareholders nor investors are discriminated with regard to the manner or scope of access to information. Information should be disclosed to all simultaneously. It is recommended that notices about material events should be announced before or after a trading session on the Vilnius Stock Exchange, so that all the company's shareholders and investors should have equal access to the information and make informed investing decisions.	Yes	The company presents the information through the information by NASDAQ OMX disclosure system used ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- "Globenewswire" in the Lithuanian and English languages at the same time. The company does not disclose any information that might have effect on the price of its securities in the comments, interviews or any other ways before such information is announced through the information system of the exchange.
10.6. Channels for disseminating information should Yes provide for fair, timely and cost-efficient or in cases provided by the legal acts free of charge access to relevant information by users. It is recommended that information technologies should be employed for wider dissemination of information, for instance, by placing the information on the company's website. It is recommended that information should be published and placed on the company's website not only in Lithuanian, but also in English, and, whenever possible and necessary, in other languages as well.		The company plans to sign a contract with Vilniaus vertybiniy popierių birža, AB (Vilnius Stock Exchange) regarding the creation of the column for the link with the investors in the website of the company where all information published by the information disclosure and distribution system NASDAQ OMX "Globenewswire" was also published in the website of the company.
10.7. It is recommended that the company's annual reports and other periodical accounts prepared by the company should be placed on the company's website. It is recommended that the company should announce information about material events and changes in the price of the company's shares on the Stock Exchange on the company's website too.	Yes

Principle XI: The selection of the company's auditor

The mechanism of the selection of the company's auditor should ensure of the firm of auditor's conclusion and opinion.

11.1. An annual audit of the company's financial reports and Yes interim reports should be conducted by an independent firm of auditors in order to provide an external and objective opinion on the company's financial statements.		The audit of annual financial statement and annual report is conducted by the independent audit company.
11.2. It is recommended that the company's supervisory board and, where it is not set up, the company's board should propose a candidate firm of auditors to the general shareholders' meeting.	Yes
11.3. It is recommended that the company should disclose to Yes its shareholders the level of fees paid to the firm of auditors for non-audit services rendered to the company. This information should be also known to the company's supervisory board and, where it is not formed, the company's board upon their consideration which firm of auditors to propose for the general shareholders' meeting.		In 2012 the audit company rendered tax consultancy services.