Panevezio Statybos Trestas

Annual / Quarterly Financial Statement • Apr 8, 2014

AB Panevėžio Statybos Trestas

Separate financial statements for the year 2013

AB Panevėžio Statybos Trestas Separate financial statements

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	42
Supplement re compliance	73

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 Swedbank, AB AB Šiaulių Bankas OAO Bank VTB ZAO IKB Evropeiski OAO KS EvrositiBank

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

+370 5 210 2600 Phone: +370 5 210 2659 Fax: E-mail: vilnius@kpma.lt Website: kpmg.com/It

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 (hereinafter "the financial statements") of AB Panevėžio Statybos Trestas (hereinafter "the Company"), which comprise the separate statement of financial position as at 31 December 2013, 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 5-41.

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 2013, 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 2013, set out on pages 42-100 of the financial statements, and have not identified any material inconsistencies between the financial information included in the annual report and the separate financial statements of AB Panevežio Statybos Trestas for the year ended 31 December 2013.

On behalf of KPMG Baltics, UAB

Domantas Dabulis Partner pp Certified Auditor

Vilnius, the Republic of Lithuania 31 March 2014

Confirmation of the Company's responsible employees

Supervisory Service To: 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 Panevėžio Statybos Trestas concerning the audited separate financial statements and the annual report for the year 2013 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).

By this confirmation of responsible employees 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 liabilities, the financial position, the result and cash flows of AB Panevėžio 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

9 Becen

AB Panevėžio Statybos Trestas Finance Director Dalė Bernotaitienė

Approved on
Minutes No.

Separate statement of financial position

as at 31 December

In Litas

	Note	2013	2012
ASSIETS
Non-current assets
Property, plant and equipment	13	16,044,567	15,057,724
Intangible assets	14	130,408	189,483
Investments in subsidiaries	ો ર	33,442,836	33,442,031
Loans granted	16	15,673,293	13,156,728
Other assets		176,677	102,089
Deferred tax assets	12	735,666	413,621
Total non-current assets		66,203,447	62,361,676
Current assets
Inventories	17	2,541,914	9,022,609
Trade receivables	18	41,678,743	75,698,974
Prepayments		3,907,464	10,466,093
Loans granted	19	12,231,132	20,164,102
Other financial assets	20	3,000,000	3,677,048
Other assets	20	7,217,883	117,740
Advance income tax		460,838	1,158,518
Cash and cash equivalents	21	48,192,425	17,892,250
Total current assets		119,230,399	138,197,334
TOTAL ASSETS		185,433,846	200,559,010

The notes on pages 10-41 are an integral part of these financial statements.

Dalius Gesevičius Managing Director Chief Accountant Danguolė Širvinskienė

31/03/2014 31/03/2014

Approved on Minutes No.

Separate statement of financial position (continued)

as at 31 December

In Litas

	Note	2013	2012
EQUITY AND LIABILITIES
Equity
Share capital	22	16,350,000	16,350,000
Reserves	22	7,517,140	6,963,400
Retained earnings		108,737,798	108,555,020
Total equity		132,604,938	131,868,420
Non-current liabilities
Warranty provision	25	1,297,928	1,195,432
Deferred tax liabilities	12	1,038,019	940,301
Total non-current liabilities		2,335,947	2,135,733
Current liabilities
Loans and borrowings	24	0	539,517
Trade payables		17,953,077	42,547,398
Prepayments received	18	24,530,030	2,624,945
Current tax payable		387,685	19,858
Other liabilities	26	7,622,169	20,823,139
Total current liabilities		50,492,961	66,554,857
Total liabilities		52,828,908	68,690,590
TOTAL EQUITY AND LIABILITIES		185,433,846	200,559,010

The notes on pages 10-41 are an integral part of these financial statements.

Dalius Gesevičius Managing Director Danguolė Širvinskienė Chief Accountant

31/03/2014 31/03/2014

Approved on Minutes No.

Separate statement of comprehensive income

for the year ended 31 December

In Litas

	Note	2013	2012
Revenue Cost of sales	5 6	202,935,329 (190,273,319)	262,847,052 (247,430,383)
Gross profit		12,662,010	15,416,669
Other income Sales expenses	10 7	2,552,596 (326,142)	980,420 (325,262)
Administrative expenses Other expenses	8 10	(12,270,620) (1,122,612)	(13,660,547) (1,055,107)
Result from operating activities		1,495,232	1,356,173
Finance income Finance costs	11 11	1,770,466 (2,747,124)	1,521,124 (565,381)
Profit before income tax Income tax	12	518,574 (156,453)	2,311,916 (863,767)
Net profit (loss)		362,121	1,448,149
Other comprehensive income Revaluation of property, plant and equipment Effect of deferred tax Items that will never be reclassified to profit or loss Items that are or may be reclassified to profit or loss Total other comprehensive income		973,464 (190,317) 783,147 0 783,147	(14,423) 0 (14,423) 0 (14,423)
Total comprehensive income		1,145,268	1,433,726
Basic and diluted earnings per share	23	0.02	0.09

The notes on pages 10–41 are an integral part of these financial statements.

Managing Director	Dalius Gesevičius
Chief Accountant	Danguolė Širvinskienė

31/03/2014 31/03/2014

Separate financial statements AB Panevėžio Statybos Trestas

Approved on

Minutes No.

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

Separate statement of changes in equity

In Litas		Compulsory	Revaluation
	Notes Share capital	reserve	reserve	Retained earnings	Total equity
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
Total other comprehensive income			(590.405)	575.982	14.423)
I otal comprehensive income for the year			(590.405)	2.024.13	1.433.726
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
Total comprehensive income for the year
Net profit (loss)				362,121	362,121
Total other comprehensive income			553.740	229.407	783.147
Total comprehensive income for the year			553-740	591.528	.145.268
Contributions by and distributions to owners of
the Company
Dividends to owners of the Company				(408,750)	(408,750)
Total contributions by and distributions to owners				(408.750)	(408,750)
of the Company
Balance as at 31 December 2013	16,350,000	1,635,030	5,882,110	108.737.798	132,604,938

The notes on pages 10-41 are an integral part of these financial statements.

Dalius Gesevicius	Danguolė Sirvinskienė
Managing Director	Chief Accountant

31/03/2014 31/03/2014

8

Approved on
Minutes No.

Separate statement of cash flows

for the year ended 31 December

1

In Litas	Note	2013	2012
Cash flow from operating activities
Net profit		362,121	1,448,149
Adjustments for:
Depreciation and amortization		2,516,254	3,846,816
Result from disposal of property, plant and equipment		(98,746)	(74,263)
Income tax expense		156,453	863,767
Unrealized foreign currency gain		788,698	0
Other non-cash items		(718,742)	1,572,649
		3,006,038	7,657,118
Change in long-term receivables		(74,588)	(173,213)
Change in inventories		6,442,802	610,107
Change in trade receivables		34,684,247	(16,970,649)
Change in prepayments		6,558,629	(4,220,763)
Change in other assets		(6,843,855)	2,065,977
Change in trade payables		(24,594,321)	7,011,244
Change in prepayments received		21,905,085	(13,898,225)
Change in other liabilities		(13,200,970)	2,823,633
		27,883,067	(15,094,771)
Income tax paid		(249,542)	(4,286,703)
Net cash flows from operating activities		27,633,525	(19,381,474)
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible
assets		(2,501,738)	(1,727,367)
Disposal of property, plant and equipment		660,243	83,513
Acquisition of investments		(805)	(500)
Loans granted		(4,724,110)	(19,111,601)
Loans recovered		9,756,483	15,995,316
Dividends and interest received		1,485,493	380,349
Net cash flows from investing activities		4,675,566	(4,380,290)
		(403,555)	(15,067)
			(1,580,495)
Interest paid		(277,146)	(437,248)
Net cash flows from financing activities		(1,220,218)	(2,032,810)
		17,892,250	43,686,824
Effect of exchange rate fluctuations on cash held		(788,698)	0
Cash and cash equivalents at 31 December		48,192,425	17,892,250
Cash flows from financing activities Dividends paid Payment of finance lease liabilities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at 1 January		(539,517) 31,088,873	(25,794,574)

The notes on pages 10-41 are an integral part of these financial statements.

Managing Director	Dalius Gesevičius
Chief Accountant	Danguolė Sirvinskienė

31/03/2014 31/03/2014 5

9

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 789 employees as at 31 December 2013 (885 employees as at 31 December 2012).

The Company has the following branches in Lithuania: Genranga, Gerbusta, Pastatų Apdaila and Klaipstata. The Company also has a branch in Kaliningrad (Russia) and a representative office in Cherepovets (Russia), and permanent establishments in Latvia and Kingdom of Sweden.

The main shareholders of the Company are:

• · AB Panevėžio Keliai (49.78%);
• Swedbank AS (Estonia) clients (6.11%);
• · Freely negotiable shares (44.11%).

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.

Basis of preparation 2.

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 18 impairment of trade receivables, construction contract revenue;
• · Note 24 classification of leases;
• · Note 25 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 date that 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 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.

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.

Non-derivative financial instruments (continued)

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 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 significantly 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 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 impaired. An 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.

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 costs

Finance income comprises interest income and dividend 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 costs 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.

Income tax (continued)

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 2013 the Company has three segments identified: Lithuania, Russia and Latvia (2012: Lithuania, Russia and Kingdom of Sweden).

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 the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal, or in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk. Fair values are obtained from quoted market prices, discounted cash flow models and option pricing models as appropriate.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Determination of fair values (continued)

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

The fair value of assets and liabilities in the statement of financial position as at 31 December 2013 does not differ significantly from their carrying amount.

Changes in accounting policies

Except for the changes below, the Company has consistently applied the accounting policies set out in these financial statements to all periods presented in these financial statements.

The Company has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 January 2013.

Fair value measurement

IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRSs. It unifies the definition of the fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7. As a result, the Company has included additional disclosures in this regard.

In accordance with the transitional provisions of IFRS 13, the Company has applied the new fair value measurement guidance prospectively and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Company's assets and liabilities.

· Presentation of items of other comprehensive income

As a result of the amendments to IAS 1, the Company has modified the presentation of items in the statement of other comprehensive income, to present separately items that would be reclassified to profit or loss from those that would never be. Comparative information has been re-presented accordingly.

· Other amendments to standards

The following amendments to standards with effective date of 1 January 2013 did not have any impact on these financial statements:

• Amendment to IFRS 7 Offsetting of Financial Assets and Liabilities;
• Amendment to IAS 19 (2011) Employee Benefits;
• Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets.

Changes in accounting policies (continued)

New standards and interpretations not yet adopted

A number of new standards, amendments and interpretations are effective for annual periods beginning after 1 January 2014, and have not been applied in preparing these financial statements. Those which may be relevant to the Company as well as management's judgements regarding the possible impact of initial application of new and revised standards and interpretations are set out below. The Company does not plan to adopt these amendments, standards and interpretations early.

· IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities (2011)

IFRS 10 introduces a single control model to determine whether an investee should be consolidated. As a result, the Group may need to change its consolidation conclusion in respect of its investees, which may lead to changes in the current accounting for these investees. The Group does not expect the new standard to have any impact on the financial statements, since the assessment of control over its current investees under the new standard is not expected to change previous conclusions regarding the Group's control over its investees.

Under IFRS 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the subsequent accounting.

• The Group's interest is a joint operation, which is an arrangement in which the parties have rights to the assets and obligations for the liabilities, will be accounted for on the basis of the Group's interest in those assets and liabilities.
• The Group's interest in a joint venture, which is an arrangement in which the parties have rights to the net assets, will be equity-accounted.

The Group does not expect IFRS 11 to have material impact on the financial statements since it is not a party to any joint arrangements.

IFRS 12 brings together into a single standard all the disclosure requirements about an entity's interest in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group does not expect the new Standard will have a material impact on the financial statements.

These standards are effective for annual periods beginning on or after 1 January 2014 with early adoption permitted.

• IAS 27 (2011) Separate Financial Statements (effective for annual periods beginning on or after 1 January 2014)

IAS 27 (2011) carries forward the existing accounting and disclosure requirements of IAS 27 (2008) for separate financial statements, with some minor clarifications. Also, the existing requirements of IAS 28 (2008) and IAS 31 for separate financial statements have been incorporated into IAS 27 (2011). The standard no longer addresses the principle of control and requirements relating to the presentation 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.

New standards and interpretations not yet adopted (continued)

· IAS 28 (2011) Investments in Associates and Joint Ventures (effective for annual periods beginning on or after 1 January 2014)

There are limited amendments to IAS 28 (2008) which are related to associates and joint ventures held for sale and changes in interest held in associates and joint ventures. The Company does not expect the amendments to Standard to have material impact on the financial statements since it does not have any significant investments in associates or joint ventures that will be impacted by the amendments.

• • Amendments to IAS 32 on Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2014)

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 any impact on the financial statements since the Company does not apply offsetting to any of its financial assets and financial liabilities and has not entered into master netting arrangements.

· Amendments to IFRS 10, IFRS 12 and IAS 27 on Investment Entities (effective for annual periods beginning on or after 1 January 2014)

The Amendments provide an exception to the consolidation requirements in IFRS 10 and require qualifying investment entities to measure their investments in controlled entities, as well as investments in associates and joint ventures at fair value through profit or loss, rather than consolidating them. The consolidation exemption is mandatory (i.e. not optional), with the only exception being that subsidiaries that are considered as an extension of the investment entity's investing activities, must still be consolidated. An entity qualifies as an investment entity if it meets all of the essential elements of the definition of an investment entity. The Company does not expect the new standard to have any impact on the financial statements, since the Company does not qualify as an investment entity.

· Amendments to IAS 36 on Recoverable Amount Disclosures for Non-Financial Assets (effective for annual periods beginning on or after 1 January 2014)

The Amendments clarify that recoverable amount should be disclosed only for individual assets (including goodwill) or cash-generated units for which an impairment loss was recognised or reversed during the period. The Amendments also require additional disclosures related to fair value hierarchy when an impairment for individual assets (including goodwill) or cashgenerated units has been recognised or reversed in the period and recoverable amount is based on fair value less costs of disposal. The Company does not expect the new Standard will have a material impact on the financial statements.

· Amendments to IAS 39 on Novation of Derivatives and Continuation of Hedge Accounting (effective for annual periods beginning on or after 1 January 2014)

The Amendments allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws and regulations, when certain criteria are met. The Company does not expect the new standard to have any impact on the financial statements, since the Company does not apply hedge accounting.

Financial risk management 4.

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 trade receivables and loans granted.

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:

(in Litas)	2013	2012
Trade receivables	41,678,743	75,698,974
Current and non-current loans granted	27,904,425	33,320,830
Current and non-current other financial assets	9,413,754	3,677,048
Cash and cash equivalents	48,192,425	17,892,250
Total	127,189,347	130,589,102
Trade receivables:
(in Litas)	2013	2012
Municipalities and state institutions	8,083,340	9,632,335
Other	33,595,403	66,066,639
Total trade receivables	41,678,743	75,698,974

Credit risk (continued)

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

(in Litas)	2013	0/0	2012	0/0
Client 1	11,163,989	26.7	12,695,421	16.8
Client 2	11.104.430	26.6	12,145,579	16.0
Client 3	2,592,800	6.2	10,480,737	13.8
Client 4	2,513,537	6.0	8,043,448	10.6
Client 5	2,218,300	5.4	6,225,240	8.2
Client 6	1,671,863	4.1	4,102,311	5.4
Client 7	1,208,304	2.9	3,387,005	4.5
Other clients	19,703,491	47.3	29,781,219	39.4
Impairment	(10,497,971)	(25.2)	(11,161,986)	(14.7)
Total	41,678,743	100	75,698,974	100

Trade receivables according to geographic regions:

(in Litas)	2013	2012
Local market (Lithuania)	39,040,789	64,590,653
Russia	1,940,337	10,585,539
Latvia	554.168	0
Sweden	143,449	522,782
Total	41,678,743	75,698,974

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

(in Litas)	2013	Impairment	Impairment
Not overdue	22,175,566		60,051,366
Overdue 0-30 days	4,922,764		4,752,204
Overdue 30-90 days	7,461,341		540,562
More than 90 days	17,617,043	10,497,971	21,516,828	11,161,986
Total	52,176,714	10,497,971	86,860,960	11,161,986

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 were not overdue as at 31 December 2012. The maturities of current loans receivable from UAB PST Investicijos (loan amount -5,603,752 Litas) and AB Panevėžio Keliai (loan amount -4,000,000 Litas) are past due as at 31 December 2013 (see Note 19). The Company plans that UAB PST Investicijos will repay the loan in 2014. The regulation of the Board's meeting includes an issue regarding the postponement of the maturity of the loan issued to AB Panevėžio Keliai.

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

Credit risk (continued)

Current and non-current other financial assets include term deposits at banks, amount receivable from the subsidiary and accrued receivable from the customer.

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 2013, including calculated interest, as to the agreements, are presented below:

	Carrying	Contractual	6 months	6-12
In Litas		amount net cash flows or less			months
Liabilities
Loans and borrowings	()	()	0
Trade creditors		17,953,077 17,953,077 17,953,077
Total		17,953,077 17,953,077 17,953,077

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

	Carrying	Contractual 6 months or		6-12
(in Litas)		amount net cash flows	less	months	1-2 years 2-5 years
Liabilities
Loans and 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

Interest rate applied for calculation of contractual net cash flows:

	2013
Loans and borrowings
	2012
Loans and borrowings	1.24% - 2.51%

Market risk

Market risk is the risk that changes in market prices, such as changes in foreign currency 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. As at 31 December 2013 and 2012 the Company did not use any derivative financial instruments.

Currency risk. The Company is exposed to the risk of changes in foreign currency rates on sales, purchases and borrowings that are denominated in a currency other than the functional currency Litas.

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

	31 December 2013	Average 2013	31 December 2012	Average 2012
1 EUR =	3.4528	3.4528	3.4528	3.4528
1 LVL =	4.9184	4.9228	4.9520	4.9518
1 SEK =	0.3849	0.3994	0.4004	0.3967
1 USD =	2.5098	2.6012	2.6060	2.6867
1 RUB =	0.0767	0.0817	0.0859	0.0865
1 GBP =	4.1391	4.0671	4.2015	4.2565

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

Year 2013 (Litas)	LTL	EUR	RUB	LVL	GBP	SEK
Non-current loans granted	12,281,635	3,391,658
Trade receivables	39,029,862	10,927	1,940,337	554,168		143,449
Current loans granted Current and non-current other	12,050,579	180,553
financial assets	4,579,834	4,833,920
Cash and cash equivalents	37,808,834	2,825	10,183,149		53,194	144,423
Loans and borrowings
Trade payables	(16,403,269)	(169,813)	(1,379,995)
Total exposure	89,347,475	8,250,070	10,743,491	554,168	53,194	287,872
Year 2012 (Litas)	LTL	EUR	RUB	USD	GBP	SEK
Non-current loans granted	13,156,728
Trade receivables	64,583,946	6,707	10,585,539			522,782
Current loans granted	9,423,015		10,741,087
Current and non-current other
financial assets	3,677,048
Cash and cash equivalents	13,193,138	546,473	3,416,369	27,473	124,092	584,705
Loans and 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

The functional currency of the Company is Litas. The Company faces the risk of changes in foregn currency rates 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.

Market risk (continued)

With a decrease in the currency exchange rate of the Russian rouble by 0.005 points, the Company's profit would decrease by approximately 700 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.

Variable interest rate financial assets and liabilities were as follows:

	Currency	2013
Issued non-current loans	ITL	15,673,293
Issued current loans	ITL	12,231,132
Total		27,904,425

With an increase in the interest rate by 0.5 per cent, the Company's profit would increase by approximately 140 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.

AB Panevėžio Statybos Trestas Separate financial statements

5. Segments

Year 2013 (in Litas)	Lithuania	Russia	Latvia	Total
Revenue	161,057,961	40,051,757	1,825,611	202,935,329
Cost of sales	(145,405,838)	(41,811,169)	(1,414,244)	(188,631,251)
Other income	2,536,614	15,982	0	2,552,596
Operating expenses	(11,118,313)	(1,278,877)	(24,628)	(12,421,818)
Other expenses	(896,727)	(13,720)	0	(910,447)
Impairment of assets	356,708	130,369	0	487,077
Amortization and depreciation	(2,382,144)	(118,615)	(15,495)	(2,516,254)
Operating result	4,148,261	(3,024,273)	371,244	1,495,232
Finance income	1,406,771	363,695	0	1,770,466
Finance costs	(2,033,839)	(713,011)	(274)	(2,747,124)
Income tax income (expenses)	26,959	(127,738)	(55,674)	(156,453)
Net profit (loss)	3,548,152	(3,501,327)	315,296	362,121

Segment assets
Year 2013 (in Litas)	I ithuania	Russia	Latvia	Total
Non-current assets	66,018,572	184,875	0	66,203,447
Inventories	2,417,088	119,744	5,082	2,541,914
Other current assets	101,556,013	14,578,304	554,168	116,688,485
Total segments assets	169,991,673	14,882,923	559,250	185,433,846
Segment liabilities
Financial liabilities
Trade accounts payable	16,573,082	1,379,995	0	17,953,077
Other payables	34,826,026	49,805	0	34,875,831
Total segment liabilities	51,399,108	1,429,800	0	52,828,908
Acquisition of intangible assets and property, plant and
equipment	2,491,082	10,656	0	2,501,738

5. Segments (continued)

Year 2012 (in Litas)	Lithuania	Russia	Kingdom of Sweden	Total
Revenue	224,100,885	35,011,912	3,734,255	262,847,052
Cost of sales	(213,111,814)	(30,561,002)	(3,757,567)	(247,430,383)
Other income	975,470	4,950	0	980,420
Operating expenses	(8,811,969)	(1,337,907)	(96,655)	(10,246,531)
Other expenses	(1,055,107)	0	0	(1,055,107)
Impairment of assets	107,538	0	0	107,538
Amortization and depreciation	(3,734,728)	(107,160)	(4,928)	(3,846,816)
Operating result	(1,529,725)	3,010,793	(124,895)	1,356,173
Finance income	929,826	591,298	0	1,521,124
Finance costs	(190,188)	(343,980)	(31,213)	(565,381)
Income tax income (expenses)	44,320	(908,087)	0	(863,767)
Net profit (loss)	(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

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 segment 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
Acquisition of intangible assets and property, plant and equipment	1,727,367	0	0	1,727,367

Major customer

Revenue from major customer of the Company in 2013 represents approximately 34,264 thousand Litas (2012: 79,320 thousand Litas) of the Company's total revenues.

6.	Cost of sales (In Litas)	2013	2012
	Raw materials and consumables Constructions sub-contractors Personnel expenses Depreciation	70,228,988 69,886,104 28,203,183 1,576,560	85,074,376 104,193,709 29,232,656 2,599,853
	Amortization	65,508	8,069
	Other costs	20,312,976	26,321,720
	Total cost of sales	190,273,319	247,430,383
7.	Sales expenses
	(In Litas)	2013	2012
	Personnel expenses Advertising and similar expenses	233,495 92,647	209,695 115,567
	Total sales expenses	326,142	325,262
8.	Administrative expenses
	(In Litas)	2013	2012
	Personnel expenses	6,846,113	6,754,515
	Purchased services for administration purposes	3,368,508	3,190,075 422,744
	Operating taxes Depreciation	1,159,808 658,330	843,056
	Amortization	3,691	17,086
	Impairment of prepayments	(534,884)	(72,532)
	Impairment of trade receivables	(664,015)	1,478,653
	Other expenses	1,433,069	1,026,950
	Total administrative expenses	12,270,620	13,660,547
9.	Personnel expenses
	(In Litas)	2013	2012
	Wages and salaries	24,448,514	24,860,808
	Compulsory social security contributions	7,707,109	7,724,975
	Daily and illness allowances	3,366,892	4,164,476
	Change in accrued vacation reserve and bonuses	(239,724)	(553,393)
	Total personnel expenses	35,282,791	36,196,866
	Included into:		29,232,656
	Cost of sales Administrative expenses	28,203,183 6,846,113	6,754,515
	Sales expenses	233,495	209,695
	Total personnel expenses	35,282,791	36,196,866

10.	Other income and expenses (In Litas)	2013	2012
	Gain from disposed property, plant and equipment Rent and other income	2,146,271 406,325	93,068 887,352
	Total other income	2,552,596	980,420
	Depreciation of rented premises and other expenses Loss from disposed property, plant and equipment	(1,113,812) (8,800)	(1,053,606) (1,501)
	Total other expenses	(1,122,612)	(1,055,107)
	Total other income and expenses, net	1,429,984	(74,687)
11.	Finance income and costs (In Litas)	2013	2012
	Interest income Other income	1,228,119 542,347	1,516,879 4,245
	Total finance income	1,770,466	1,521,124
	Interest expense Foreign currency exchange loss Other expenses	(277,145) (2,534,275) 64,296	(437,248) (110,048) (18,085)
	Total finance costs	(2,747,124)	(565,381)
	Total finance income and costs, net	(976,658)	955,743
12.	Income tax
	Income tax expense:
	(In Litas)	2013	2012
	Current tax expense Change in deferred tax	571,096 (414,643)	908,086 (44,319)
	Total income tax expense	156,453	863,767

As of 1 January 2013, the Company applied a standard rate of 15% in Lithuania, a 20% rate in Russian Federation and a rate of 15% in Latvia (as of 1 January 2012: rate of 15% in Lithuania, a 20% rate in Russian Federation and a rate of 26.3% in the Kingdom of Sweden).

12. Income tax (continued)

Reconciliation of effective tax rate:

(In Litas)		2013	2012
Profit for the year		362,121		1,448,149
Total income tax expense		156,453		863,767
Profit before tax		518,574		2,311,916
Income tax applying the Company's
domestic tax rate	15.0%	77,786	15.0%	346.787
Effect of tax rates in foreign
jurisdictions	8.2%	42.579	7.0%	162.906
Non deductible expenses	47.3%	245,176	28.2%	652,157
Tax exempt income	(15.4)%	(79,966)	(2.2)%	(50,513)
Utilized tax losses for which no deferred
tax asset was previously recognised	(68.2)%	(353,431)	(8.8)%	(203,251)
Change in unrealized temporary
differences	43.3%	224,309	(1.9)%	(44,319)
	30.2%	156,453	37.3%	863,767

Deferred tax:

(In Litas)	2013		2012
	Temporary differences	Deferred tax	Temporary differences	Deferred tax
Impairment of trade receivables	10,497,971	1,574,696	11,161,986	1,674,298
Accrued bonuses	132,899	19,935	360,222	54,033
Vacation reserve	808,949	121,342	816,027	122,404
Warranty provision	1,297,928	194,689	1,195,432	179,315
Stock write-down to NRV	348,027	52,204	310,134	46,520
Taxable losses	0	0	2,356,205	353,431
Differences of tax regimes in foreign jurisdictions	80,872	12,131	9,711,144	1,456,672
Total deferred tax assets Not recognized deferred tax assets Recognized deferred tax assets		1,974,997 (1,239,331) 735,666		3,886,673 (3,473,052) 413,621
Revaluation of land and buildings	6,920,129	1,038,019	6,268,671	940,301
Deferred tax liability		1,038,019		940,301
Deferred tax, net		(302,353)		(526,680)

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:

(In Litas)	2013	2012
Net deferred tax at 1 January	(526,680)	(570,999)
Recognized in other comprehensive income	(190,316)
Recognized in profit or loss	414.643	44.319
Net deferred tax at 31 December	(302,353)	(526,680)

AB Panevėžio Statybos Trestas Separate financial statements

13. Proberty, plant and equipment

	Land and	Plant and		Fixtures and	Construction in
In Litas)	buildings	equipment	Vehicles	fittings	progress	l ota
Cost (fair value of land and buildings)
Balance at 1 January 2012	23,288,355	16.093.598	9,281,382	10.156.134		58.819.469
Additions	367,771	415.676	352,325	398.062		1.533.834
Revaluation	(14.423)					(14.423)
Jisposals	(37.759)	(846.753)	(148.444)	(653.082)		(1.686.038)
Balance at 1 January 2013	23.603.944	15.662.521	9.485.263	9.901.114		58.652.842
Additions	112,787	1,803,756	422,104	152,599		2,491,246
Kevaluation	1,268,779					1,268,779
Jisposals	(473,145)	(193.339)	(49.799)	(461.155)		(1,177,438)
Transferred accumulated depreciation	12,489,523)					(12,489,523)
Balance at 31 December 2013	12,022,842	17,272,938	9,857,568	9,592,558		48,745,906
Depreciation and impairment losses Balance at 1 January 2012	11.224.207	13.953.418	7,556,383	8.745.002		41.479.010
Depreciation for the year	997.644	1.444.213	775.942	603,862		3.821.661
mpairment (reversal of impairment)	(28,765)					(28,765)
Depreciation of the assets disposed	(37.517)	(846.730)	(148.436)	(644.105)		(1.676.788)
Balance at 1 January 2013	12,155,569	14.550.901	8.183.889	8.704.759		43,595,118
Depreciation for the year	651.249	733.116	566.158	496.165		2,446,688
mpairment (reversal of impairment)	(235,003)					(235,003)
Depreciation of the assets disposed	(82,292)	(56.721)	(46,022)	(430.906)		(615.941)
Elimination of accumulated depreciation	12,489,523)					12,489,523
Balance at 31 December 2013		15,227,296	8.704.025	8,770.018		32,701,339
Carrying amounts At 1 January 2013	11.448.375	1,111,620	1.301.374	1.196.355		15,057,724
At 31 December 2013	12,022,842	2,045,642	1,153,543	822.540		16.044.567

13. Property, plant and equipment (continued)

Land and buildings are stated at revalued amount. The last revaluation was performed as at 31 December 2013 based on the consulting on possible market prices of the Company's land and buildings provided by independent valuation company UAB Matininkai, having appropriate recognized professional qualifications and necessary experience in valuation of property at certain location and of certain category.

The fair value of buildings and land equal to 12,023 thousand Litas is attributable to Level 3 under the hierarchy of fair value. The valuation was performed using the market comparison technique.

Significant unobservable data was used in fair value measurement, i.e. price per square meter/are. The fair value would increase with an increase in price per square meter/are and decrease with a decrease in price per square meter/are.

If the buildings and land were stated at cost, their carrying amount as at 31 December 2013 would be equal to 5,464 thousand Litas (31 December 2012: 5,836 thousand Litas).

(In Litas)	2013	2012
Depreciation included into:
Cost of sales	1,576,560	2,599,853
Administrative expenses	658.330	843.056
Other expenses	211.798	378,752
Total depreciation	2,446,688	3,821,661

Land and buildings with a net carrying amount of 7,420,000 Litas as at 31 December 2013 are pledged to the banks (refer to Note 27). As at 31 December 2013 the Company had no leased property, plant and equipment (at 31 December 2012, the net carrying amount of leased property, plant and equipment was 507,464 Litas).

Intangible assets 14.

(In Litas)	Software	Other	Total
Cost Balance at 1 January 2012 Additions	689,682 193,533	16,280	705,962 193,533
Balance at 1 January 2013 Additions Disposals	883,215 10,492 (2,400)	16,280	899,495 10,492 (2,400)
Balance at 31 December 2013	891,307	16,280	907,587
Amortization and impairment losses Balance at 1 January 2012 Amortization for the year	668,578 25,155	16,279	684,857 25,155
Balance at 1 January 2013 Amortization for the year Amortization of the assets disposed	693,733 69,566 (2,399)	16,279	710,012 69,566 (2,399)
Balance at 31 December 2013	760,900	16,279	777,179
Carrying amount At 1 January 2013	189,482	1	189,483
At 31 December 2013	130,407	1	130,408

14. Intangible assets (continued)

2013	2012
65,508	8,069
3,691 367	17,086
69,566	25,155

15. Investments in subsidiaries

(In Litas)	2013		2012
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	96%	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
OOO Teritorija	87.5%	805	0%	0
Impairment		(13,175)		(13,175)
Total investment		33,442,836		33,442,031

Financial information about the subsidiaries can be specified as follows:

(In Litas)	Type of activities	Equity as at 31/12/2013	Net profit (loss) for 2013	Equity as at 31/12/2012	Net profit (loss) for 2012
UAB PST Investicijos (consolidated - see
below)	Real estate development	15,077,762	(2,987,699)	16,651,351	2,210,392
000 Baltlitstroj	Constructions	2,860,057	3,016,614	33,821	876,363
	Constructions: electricity
UAB Vekada	instalments	5,315,674	548,127	5,184,713	451,637
	Constructions: wooden
UAB Skydmedis	houses	2,475,509	964,821	1,780,745	458,002
	Constructions: conditioning
UAB Alinita	equipment	190,905	71,620	119,285	196,977
UAB Metalo Meistrai	Constructions	1,086,403	(17,065)	1,103,468	(60,281)
SIA PS Trests	Constructions	(781,317)	(2,618)	(784,021)	45,091
TUB Vilniaus Papėdė	Real estate development	2,773	219	3,808	220
Kingsbud Sp.z.o.o	Constructions	60,615	19,100	42,060	(9,320)
OOO Teritorija	Real estate development	(90,804)	(112,576)	0	0

15. Investments in subsidiaries (continued)

Based on the management's assessment, the investment in SIA PS Trests is impaired; therefore, 100% impairment was recognized for this investment. The recoverable amount calculated for the investment in UAB PST Investicijos (see below) showed no impairment; therefore, impairment was not accounted for. According to the management, other investments are also not impaired.

When preparing the financial statements estimation of the 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 2013 UAB PST Investicijos has the following special purpose subsidiaries:

(In Litas)	Ownership	Equity as at 31/12/2013	Net profit (loss) for 2013	Equity as at 31/12/2012	Net profit (loss) for 2012
ZAO ISK Baltevromarket	100%	(13,771,595)	(3,776,684)	(11,409,022)	(319,769)
UAB Verkių Projektas	100%	7.604.480	2,080,689	5,523,791	4,006,853
UAB Ateities Projektai	100%	944.785	(12,382)	957.165	(16,948)
UAB Kauno Erdvė	100%	(4,555,208)	74.530	(4,629,738)	(141,629)
UAB Sakališkės	100%	(4,683,765)	(332,598)	(4,351,167)	(198,694)
UAB Seškinės Projektai	100%	4,133,704	(318,637)	4.452.341	(12,371)

The calculation of recoverable amount is presented below:

(In Litas)	Ownership	Projects under development measured at fair values	Net liabilities	Net assets when managed projects are stated at fair value	Value of UAB PST Investicijos investments in subsidiaries
ZAO ISK Baltevromarket	100%	66,284,848	(37,339,784)	28,945,064	28,945,064	(i)
UAB Verkių projektas	100%	24,500,000	(16,895,520)	7,604,480	7,604,480	(ii)
UAB Ateities projektai	100%	1,400,000	(455,215)	944,785	944,785	(111)
UAB Kauno erdvė	100%	2,970,000	(7,525,208)	(4,555,208)	0	(111)
UAB Sakališkės	100%	5,800,000	(10,483,765)	(4,683,765)	0	(iii)
UAB Seškinės projektai	100%	4,300,000	(166,296)	4,133,704	4,133,704	(iii)
Recoverable amount of UAB PST Investicijos investments in subsidiaries					41,628,033
Other assets of UAB PST Investicijos					37,578,897
Liabilities of UAB PST Investicijos					(25,051,142)
Net assets of UAB PST Investicijos at fair value					54,155,788
Number of shares owned by AB Panevėžio Statybos Trestas				68%
The recoverable amount of UAB PST Investicijos attributable to AB Panevėžio Statybos
Trestas					36,825,936
Investment in UAB PST Investicijos in the financial statements as at 31 December 2013					30,652,000

(i) A significant portion of the recoverable amount of the investment into UAB PST Investicijos is related to the real estate project being developed by ZAO ISK Baltevromarket in Kaliningrad. In 2013, the Board of UAB PST Investicijos considered the possibilities of selling this project. In 2013, the company searched for a customer; however, no customer was found as at 31 December 2013. In 2014, project selling works are continued and deliberations over proposals are taking place. 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 DTZIMS (IMS Project Management LLC), the market value of the project developed by ZAO ISK Baltevromarket as at 31 December 2013 amounted to 66,284,848 Litas (19,197,419 EUR). The valuation of one of the land plots developed by ZAO ISK Baltevromarket was performed using the market comparison technique, based on which the value of the land plot was 13,248,014 Litas (3,836,890 EUR); another land plot was evaluated using the discounted cash flows method, based on which the value of the land plot was 53,036,834 Litas (15,360,529 EUR). Key inputs used by the valuator using the discounted cash flows method could be detailed as follows:

15. Investments in subsidiaries (continued)

• discount rate 24%; .
• exit yield 11.5%; .
• · shopping centre area: annual rent prices from 100 to 600 EUR/sq.m., occupancy rate - from 40% in the first year to 95% in the last year of the model for different premises.
• (ii) To support the recoverable amount of UAB Verkių Projektas, the Company obtained a market price evaluation of an independent real estate valuer UAB Resolution Valuations; based on this evaluation, market price of the property managed by UAB Verkių Projektas was 24,500,000 Litas. 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%).

16. Non-current loans granted

(In Litas)	Interest rate	Maturity	2013	2012
UAB PST Investicijos (loan)	6 month VILIBOR+2.2%	31/03/2015	11,974,713	10,858,503
OOO Teritorija UAB Metalo Meistrai	12% fixed 6 month VILIBOR+2.0%	20/09/2015 31/12/2017	3,391,658 306,922	0 ()
UAB PST Investicijos (loan)	6 month VILIBOR+1.9%	01/09/2014	0 0	2,273,554 24,671
Other Total			15,673,293	13,156,728

Inventories 17.

Total inventories	2,541,914	9,022,609
Write-down to net realizable value	(348,027)	(310,134)
Goods for resale	1.230	235.972
Raw materials and consumables	2,888,711	9.096.771
(In Litas)	2013	2012

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

18. Trade receivables

(In Litas)	2013	2012
Trade receivables due from customers	43.434.791	58,989,245
Accrued receivables in accordance with the stage of completion	4,406,143	1,729,708
Trade receivables due from related parties	4,335,780	26,142,007
Impairment	(10,497,971)	(11,161,986)
Total trade receivables	41,678,743	75,698,974

18. Trade receivables (continued)

As at 31 December 2013 aggregate costs incurred under construction contracts in progress and recognized profits, net of recognized losses, amounted to 57,466,139 Litas (2012: 233,192,070 Litas). Progress billings under open construction contracts amounted to 56,489,175 Litas as at 31 December 2013 (2012: 244,735,903 Litas). Billings in excess of costs incurred and recognized profits are presented as deferred income (disclosed in Note 26) and amounted to 976,964 Litas as at 31 December 2013 (2012: 11,543,833 Litas).

As at 31 December 2013, trade receivables include retention - a fixed percentage of the total contract price which shall 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 1,043,496 Litas (2012: 7,688,215 Litas) relating to construction contracts in progress.

For impairment of trade receivables refer to Note 4.

Prepayments received from customers amounted to 24,530,030 Litas as at 31 December 2013 (31 December 2012: 2,624,945 Litas). The increase as at 31 December 2013 was influenced by a larger number of new construction contracts signed at the end of the year.

19. Current loans granted

(In Litas)	Interest rate	Maturity	2013	2012
UAB PST Investicijos (loan)*	6 month VILIBOR+1.9%	12/05/2013	5,603,752	5.423.015
AB Panevėžio Keliai*	3 month VILIBOR+1.9%	11/01/2013	4.000.000	4,000,000
UAB PST Investicijos (loan)	6 month VILIBOR+1.9%	01/09/2014	2,344,675	()
UAB Metalo Meistrai	6 month VILIBOR+2.0%	31/12/2014	102,307	()
Kingsbud Sp.z.o.o	1.67% fixed	30/09/2014	173,217	0
000 Baltlitstroj (loan)	5% fixed	01/09/2013	0	10,741,087
Other current loans			7,181	O
Total			12,231,132	20,164,102

*Until the reporting date the loans were not repaid. The Company plans that UAB PST Investicijos will repay the loan in 2014. The regulation of the Board's meeting includes an issue regarding the postponement of the maturity of the loan issued to AB Panevėžio Keliai.

20.	Other current assets (In Litas)	2013	2012
	Receivable from the subsidiary OOO Baltlitstroj related to prepayment
	paid to the supplier for subsidiary	4,833,920	()
	Term deposit at bank	3,000,000	3.677.048
	Accrued receivable from the customer	1,579,834	0
	VAT overpayment	799,262	0
	Other current assets	4.867	117,740
	Total other current assets	10,217,883	3,794,788

The interest rate applicable to the term deposit at the bank as at 31 December 2013 is 0.13%, maturity - June 2014 (the interest rate applicable to the term deposit at the bank as at 31 December 2012 is 1.88%, maturity - May 2013).

21. Cash and cash equivalents

Total cash and cash equivalents	48,192,425	17,892,250
Cash in hand	22,954	17,052
Bank deposits	2,000,000
Cash at banks	46,169,471	17,875,198
(In Litas)	2013	2012

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 2013.

Reserves are as follows:

(In Litas)	2013	2012
Revaluation reserve	5,882,110	5,328,370
Legal reserve	1,635,030	1,635,030
Total reserves	7,517,140	6,963,400

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:

	2013	2012
Revaluation reserve at 1 January	5,328,370	5,918,775
Revaluation result	1,268,778	()
Reversed revaluation for sold assets	(295,314)	(14,423)
Depreciation of revaluation reserve	(322,005)	(680,172)
Deferred tax on revaluation	(146.020)
Deferred tax on depreciation of revaluation	48,301	104,190
Revaluation reserve at 31 December	5,882,110	5,328,370

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 paid out in dividends.

23. Earnings per share

Basic and diluted earnings per share	0.02	0.09
Net result for the year Average number of shares	362.121 16,350,000	1,448,149 16,350,000
(In Litas)	2013	2012

2012

2013

24. Loans and borrowings

(In Litas)	2013	2012
Non-current liabilities
Current liabilities		539,517
Total loans and borrowings		539.517

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
	550,210	10.693	539.517

As at 31 December 2013, the Company had two effective agreements on guarantee limits with banks, with the limit of 25,000,000 Litas and maturity in May-June 2015 (as at 31 December 2012, the Company had two effective credit agreements with the limit of 15,000,000 Litas and maturity in 2013).

25. Warranty provision

26.

Warranty provisions are related to constructions built in 2009-2013. 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:

Provisions for warranties in the beginning of the period	1,195,432	1,060,670
Used and recognized under cost of sales	(522,794)	(704,004)
Accrued during the period	625,290	838,766
Provisions for warranties at the end of the period	1,297,928	1,195,432
Other liabilities (In Litas)	2013	2012
Accrued vacation reserve	3,590,742	3,603,143
Payable salaries and related taxes	2,502,913	2,668,816
Deferred income in accordance with the stage of completion	976.964	11,543,833
Accrued bonuses for employees	132,899	360,222
Other liabilities	418,651	2,647,125
Total other liabilities	7,622,169	20,823,139

27. Contingencies

Guarantees to third parties of 6,680,515 Litas, related to liabilities in the construction contracts of the Company, have been issued by the banks. The guarantees expire from 25 January 2014 to 16 May 2015.

Property, plant and equipment, with a carrying amount of 3,290,000 Litas as at 31 December 2013, and current and future funds in bank account have been pledged to bank for the guarantee limit issued and guarantees issued by bank. The guarantee limit amounts to 15,000,000 Litas, the used amount as at 31 December 2013 is 6,580,515 Litas. The guarantee limit is effective until May 2015.

Property, plant and equipment, with a carrying amount of 4,130,000 Litas as at 31 December 2013 have been pledged to bank for the guarantee limit issued. The guarantee limit amounts to 10,000,000 Litas, the used amount as at 31 December 2013 is 100,000 Litas. The guarantee limit is effective until June 2015.

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.

28. 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 the control or significant influence over the other party in making financial and operating decisions.

28. Transactions with related parties (continued)

The Company had sales and purchase transactions during 2013/2012 with subsidiaries, the parent company AB Panevėžio Keliai and with subsidiaries of AB Panevėžio Keliai. Transactions with related parties during 2013/2012 are as follows:

(In Litas)	Type of transaction	2013	2012
Sales:
Companies under control
UAB PST Investicijos	Interest	501,044	517,750
000 Baltlitstroj	Goods, services, interest	5,445,543	18,121,280
UAB Metalo Meistrai	Goods and services	277,299	273,212
UAB Vekada	Goods and services	378,587	585,292
UAB Skydmedis	Goods and services	151,280	143,900
SIA PS Trests	Interest	0	68
UAB Alinita	Goods and services	158,210	200,282
UAB Verkių Projektas	Goods and services	1,411,065	11,992,037
OOO Teritorija	Services, interest	1,761,532	0
Kingsbud Sp.z.o.o	Interest	577	0
Other related companies
UAB Panevėžys	Goods, services	487	727
AB Panevėžio Keliai	Services, interest	2,929,906	372,288
UAB Ukmergės Keliai	Goods and services	230,085	0
Other	Services	266	526
Purchases:
Companies under control
000 Baltlitstroj	Goods and services	29,330,374	10,712,127
UAB Metalo Meistrai	Goods and services	2,519,330	9,277,761
UAB Vekada	Goods and services	4,665,011	6,211,615
UAB Alinita	Goods and services	4,687,642	3,090,920
UAB Skydmedis	Goods and services	110,266	105,448
UAB PST Investicijos	Goods and services	21,860	19,657
UAB Verkių Projektas	Goods and services	33,974	53,860
UAB Seškinės Projektai	Services	250	0
UAB Panevėžys	Services	1,723	0
SIA PS Trests	Services	4,819	0
Kingsbud Sp.z.o.o	Goods and services	1,614,876	947,600
TUB Vilniaus Papėdė	Goods and services	23,105	26,685
Other related companies
AB Panevėžio Keliai	Goods and services	2,002,755	3,451,771
UAB Aukštaitijos Traktas	Goods and services	30,420	5,128
UAB Keltecha	Goods and services	42,126	2,134,544
UAB Gelbera	Goods and services	171,285	260,912
UAB Convestus	Goods and services	187,202	319,587
UAB Ukmergės Keliai	Goods and services	301,399	19,847

28. Transactions with related parties (continued)

(In Litas)	2013	2012
Amounts receivable:
Companies under control
UAB PST Investicijos	0	23.786
000 Baltlitstroj	4.944.368	17,891,091
Kingsbud Sp.z.o.o	67,094	130,951
TUB Vilniaus Papėdė	31,219	3,387,005
UAB Verkių Projektas	41,771	2,001,558
UAB Metalo Meistrai	35,591	427,461
SIA PS Trests	0	30
OOO Teritorija	717,348	0
UAB Skydmedis	26,786	36,825
Other related companies
AB Panevėžio Keliai	1,087,223	0
UAB Panevėžys	2,218,300	2,243,300
Amounts payable:
Companies under control
UAB Vekada	1,448,163	2,286,315
UAB PST Investicijos	0	23,786
UAB Seškinės Projektai	61	0
000 Baltlitstroj	434,011	0
SIA PS Trests	5,206	0
UAB Alinita	254,789	528,256
Other related companies
UAB Keltecha	0	102,246
UAB Gelbera	12,872	17,069
AB Panevėžio Keliai	0	32,941
UAB Convestus	0	82,785
UAB Ukmergės Keliai	0	470
Loans receivable:
AB Panevėžio Keliai	4,000,000	4,000,000
ÜAB PST Investicijos	19,923,140	18,555,072
000 Baltlitstroj	0	10,741,087
UAB Metalo Meistrai	409,229	0
OOO Teritorija	3,391,658	0
Kingsbud Sp.z.o.o	173,217	0

Wages, salaries and social insurance contributions, calculated to management for the year 2013, amounted to 1,673,242 Litas (2012: 1,754,550 Litas).

29. Fair value of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction under current market conditions in the main (or the most favourable) market independent on whether this price is directly observable or established using valuation techniques.

29. Fair value of financial instruments (continued)

The following methods and assumptions are used by the Company to estimate the fair value of the financial instruments.

Cash

Cash represents cash on hand stated at value equal to the fair value.

Receivables

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. Fair value of trade and other receivables with outstanding maturities shorter than six months with no stated interest rate is deemed to approximate their face value on initial recognition and carrying value on any subsequent date as the effect of discounting is immaterial. This fair value is determined for disclosure purposes.

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 agreement. Fair value of shorter term financial liabilities with no stated interest rate is deemed to approximate their face value on initial recognition and carrying value on any subsequent date as the effect of discounting is immaterial.

Fair values are categorised within different levels in a fair value hierarchy, which disclosed the significance of initial inputs used in the valuation techniques. The fair value hierarchy consists of these levels:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - original inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

Level 3 - original inputs for the asset or liability that are not based on observable market data (unobservable original inputs).

The Company has no financial assets and liabilities stated at fair value.

Financial instruments not measured at fair value

The main financial instruments of the Company which are not measured at fair value include trade and other receivables, trade and other payables, current and non-current borrowing funds. As to the Company's management, the carrying amounts of these financial instruments approximate their fair values, as borrowings costs are related to interbank borrowing interest rate VILIBOR and EURIBOR, while other financial assets and liabilities are current; therefore, the changes in their fair values are insignificant.

Subsequent events 30.

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

Managing Director	Dalius Gesevičius	31/03/2014 W. JUSIN
Chief Accountant	Danguolė Sirvinskienė	31/03/2014

41

PANEVĖŽIO STATYBOS TRESTAS AB CONSOLIDATED ANNUAL REPORT FOR THE YEAR 2013

1. ACCOUNTING PERIOD COVERED BY THE ANNUAL REPORT

The report covers the year 2013.

2. THE ISSUER AND ITS CONTACT DETAILS

Public limited liability company Panevėžio statybos
trestas
16,350,000 Litas
P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania
(+370 45) 505 503
(+370 45) 505 520
pst(a)pst.lt
Public limited liability company
30 October 1993, Panevėžys City Board
AB 9376
147732969
LT477329610
State Enterprise Centre of Registers
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.

Vision - to become the acknowledged leader in the construction sector, using the advanced technologies and ensuring quality as well as the agreed work completion terms.

Mission - while honestly fulfilling our obligations, developing long-term cooperation and proposing mature solutions in construction, we increase the value to shareholders and develop activity of the company. We create the environment of higher quality to business, society and people.

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.

On 2 December 2013 after termination of the agreement with DNB bankas, AB Panevežio statybos trestas AB signed the agreement for accounting for financial instruments with Financial Brokerage Company Finasta AB.

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

The ordinary registered shares of Panevežio statybos trestas AB, totalling 16,350,000 pieces, 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 2010 through 2013 (in Litas)

Company share price variation at VSE in 2013 (in Litas)

Last price 31 Dec. 2012	Average share price for 2013	Highest price during 1-12 months	Lowest price during 1-12 months	Last price 31 Dec. 2013
3.208 Litas	4.118 Litas	5.007 Litas	3.266 Litas	3.902 Litas

		Capitalization, million Litas
2009	2010	2011	2012	2013
61.97	110.08	61.53	52.45	63.79

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 (hereinafter "PST") is the only Lithuanian construction company with more than 55 years of experience in construction business. During its long history the company completed lots of projects of exceptional significance and complexity, which have contributed to economic growth and environmental improvement in Lithuania, thus creating a higher quality of living environment for all people of the country. Throughout the period the company has followed such core values as honesty, responsibility, professionalism, high quality of work and efficient solutions. Namely these values have enabled the company to achieve our goals. Operation of PST companies has significant impact on the country's infrastructure development: the implemented unique projects of national importance contribute to enhancement of the image as the responsible company among customers and business partners. Customers trust PST and appreciate the company as an experienced developer of large and technologically complex projects. Such attitude of our clients is being strived for through persistent work and investing in employees, introduction and use of new technologies in production, and this allows easy implementation of projects having various levels of complexity.

In 2013 the company was awarded the gold medal for construction of Combined Heat and Power Plant in Klaipeda.

In 2013 Panevėžio statybos trestas AB successfully completed its activities in one of the largest and most complex projects in Lithuania - construction of 4,500 tons/day Dry Clinker Production Line in Akmenes cementas AB. In addition, Fish Processing Plant with storage facilities was completed in Biruliškiy Village, Kaunas District Municipality, and handed over to the customer Baltic Fish Export UAB. In 2013 construction of Driver Practical Training Centre (vehicle tracks) in Panevėžys and reconstruction of Panevėžys City Vyturio Progymnasium were completed.

In 2013 the company started its activities on the following new projects: construction of Joint Centre for Life Sciences and related buildings at Sauletekio Ave. 9, Vilnius, construction of Klaipeda City Head Police Headquarters and supplementary buildings (parking areas), construction of the Aviation Fuel Base (engineering infrastructure facilities, transportation lines - access roads, railway) at the Air Force Base of the Lithuanian Armed Forces (NATO project) in Šiauliai.

In 2013 the following branches were operating under the name of the company: Gerbusta, focusing on construction of engineering networks and landscaping, Pastatų apdaila, carrying out indoor and outdoor finishing works, 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.

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 Kingdom of Sweden and the Republic of Latvia.

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 the Notes to the Separate Financial Statements (Note 4) and in the Notes to the Consolidated Financial Statements (Note 4).

7. INFORMATION ON SUBSIDIARIES OF THE COMPANY

As at 31 December 2013 the Company Group of Panevėžio statybos trestas AB included the following companies:

Subsidiaries	Type of activities	Share controlled (per cent)	Registered address
Skydmedis UAB	Construction: panel houses	100	Pramonės Str. 5, Panevėžys Tel.: +370 45 583341
Metalo meistrai UAB	Construction	100	Tinklų Str. 7, Panevėžys Tel. +370 45 464677
Vekada UAB	Construction: electrical installation	96	Marijony Str. 36, Panevėžys Tel .: +370 45 461311
Panevėžio statybos trestas AB and partner's Vilniaus papėdė TUB	Real estate development	69	Tuskulėnų Str. 33, Vilnius
Alinita UAB	Construction: conditioning equipment	100	Tinkly Str. 7, Panevėžys Tel.+370 45 467630
Kingsbud Sp.z.o.o.	Intermediation services	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
Teritorija OOO	Real estate development	87.5	Lunacharskovo Lane 43- 27, Cherepovets Vologda County
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	100	Verkių Str. 25C, Vilnius
Seškinės projektai UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Sakališkės UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Kauno erdvė UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Verkių projektas UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Baltevromarket ZAO ISK	Real estate development	100	Pobeda Square 10, Kaliningrad

Skydmedis UAB (company code 148284718) was established and began 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 2013 the company received income of 11,551.5 thousand Litas and generated net profit in the amount of 964.8 thousand Litas. Compared to the year 2012 (7,601.7 thousand Litas), the annual turnover increased by 51.96 per cent. In 2013 the major part of income, 73.79 per cent, was received in other countries, such as Denmark, Norway, Sweden, France and Switzerland. 26.21 per cent of income was received in Lithuania.

	2011	20192	2013
Income from sales, thousand Litas	6,783.2	7,601.7	11,551.5
Gross profit, thousand Litas	1,375.4	1,946.8	3,350.2
Net profit, thousand Litas	256.5	458.0	964.8
Gross profitability	20.3%	25.6%	29,0%
Net profitability	3.8%	6.0%	8.4%
Return on equity, % (ROE)	19.39	25.72	38.97
Current liquidity ratio	2.2	2.2	2.1
Acid test (Quick) ratio	ો ડ	1.6	1.5

The main performance indicators of Skydmedis UAB are as follows:

In 2013 Skydmedis UAB started introducing the Lean system, which ensures continuous improvement and elimination of unnecessary activities (losses) in order to create a higher value to the customer and increase own competitiveness.

While continuously improving the production process and quality, the company has scheduled participation in three exhibitions in 2014 taking place in France, Switzerland and Norway to present its products, make the company known wider as well as increase the number of foreign customers and attract new customers. At the end of 2013 the certificate for the house structures was issued to Skydmedis UAB by Sintef (Norway). This allows the company to strengthen its presence in the segment of the top quality wooden panel-frame houses, the products are adapted to foreign markets and meet stringent quality standards.

At the end of 2013 Skydmedis UAB had 76 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 2013 the income from sales amounted to 10,982.7 thousand Litas. The income of the company in Lithuania makes 42.18 per cent, in Norway - 46.73 per cent and in other countries (Russia, Germany and Sweden) - 11.09 per cent.

	2011	20162	2013
Income from sales, thousand Litas	7,819.5	10,907.4	10,982.7
Gross profit, thousand Litas	256.2	574.3	725.7
Net profit, thousand Litas	-243	-60	- 7
Gross profitability	3.3%	5.3%	6.6%
Net profitability	-3.1%	-0.6%	-0.2%
Return on equity, % (ROE)	-20.88	-5.46	-1.57
Current liquidity ratio	0.96	0.88	1.06
Acid test (Quick) ratio	0.36	0.82	0.70

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

At the end of 2013 the company had 65 employees.

In 2013 the company started introducing the Lean system and using the production management program Monitor.

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 2014 the company plans to continue production of steel structures and their elements, increase turn-over and profitability, respond to changes in the market. The forces will be used in search of new sales order in and outside Lithuania including Norway.

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. During the reporting year alongside with the usual electrical work areas related to low currents were under expansion: video surveillance systems, security and fire alarm systems, control of engineering systems. Electrical installation work was started in the field of renewable energy sources.

In 2013 the company received income of 12.062 million Litas and generated the net profit amounting to 548.1 thousand Litas. The annual turnover increased by 11% compared to 2012.

	2011	2012	2013
Income from sales, thousand Litas	7.252.9	10,860.5	12,062.3
Gross profit, thousand Litas	1.187.0	1,579.0	1,810.5
Net profit, thousand Litas	65.5	451.6	548.1
Gross profitability	16.4%	14.5%	15,0%
Net profitability	0.9%	4.2%	4.5%
Return on equity, % (ROE)	1.45	9.11	9.86
Current liquidity ratio	6.13	3.26	5.27
Acid test (Quick) ratio	5.05	3.09	4.83

The main performance indicators of Vekada UAB are as follows:

At the end of 2013 the company had 69 employees.

In 2014 the wider range of services is planned in the area of installation activities, the tasks are set for mastering automation of building control systems and automation of production processes in industrial facilities.

During the reporting year the occupational health and safety management system in accordance with OHSAS 18001 was introduced in the company, quality management standard ISO 9001 and environmental management standard ISO 14001 are in the process of implementation.

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.

In 2013 the company received income of 5,589 thousand Litas. The income increased by 35% compared to 2012.

	2011	2012	2013
Income from sales, thousand Litas	1,788	4,127	5,589
Gross profit, thousand Litas	188.9	694.7	520.0
Net profit, thousand Litas	-155.4	197.0	71.6
Gross profitability	10.6%	16.8%	9.3%
Net profitability	-8.7%	4.8%	1.3%
Current liquidity ratio	1.00	1.05	1.09
Acid test (Quick) ratio	0.90	0.88	1.00

The main performance indicators of Alinita UAB are as follows:

In 2013, the company had implemented the following management standards: ISO 9001, ISO 14001, OHSAS 18001. The standard implementation is regularly audited by an international certification company BM TRADA. Regular internal audits are performed by Panevėžio statybos trestas AB. Implementation of management standards allows the employees to better understand the company's goals.

The company has all certificates required for performance of the listed activities. In 2013 the company had 39 employees.

The share capital 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.

Panevėžio statybos trestas AB and partner's Vilniaus papėdė TŪB (company code 12545197) was founded in 2000. The partnership was established for the period of building the Palace of the Grand Dukes of Lithuania. The partnership does not make any profit from its activities; expenses are distributed among the partnership members in proportion to their activities carried out.

Referring to the Law on Reconstruction and Function of the Palace of the Grand Dukes of Lithuania, the opening ceremony of the palace was scheduled for July 2009; however, due to lack of funding construction completion was delayed and the works in Part A of the Palace was completed in May 2013.

The closing procedure of Panevėžio statybos trestas AB and partners' Vilniaus papėdė UAB is planned to be started in 2014.

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.

Baltlitstroij OOO (company code 236006) was founded and started its activities on 20 October 2000. The main activity of the company is construction works. In 2013 the company had 71 employees. In 2013, the company received income of 97.8 million Litas, i.e. twice as much as in 2012, when income amounted to 51.5 million Rubles. In 2013, the company generated profit of 3 million Litas. Profit in 2012 amounted to 0.9 million Litas.

In 2013 as well as in the previous years all activities of the company were carried out in the Kaliningrad Region. The major part of the income in 2013 was from reconstruction of the Kaliningrad County Hospital and construction of the cinema Rossija, which were completed in the reporting year and the cinema Rossija was handed over.

In 2013 the contract was signed for construction of a kindergarten for 240 children in Sovetsk, Kaliningrad Region.

	2011	2012	2013
Income from sales, thousand Litas	62,357	51,480	97,814
Gross profit, thousand Litas	3,236.7	1,795.8	811.6
Net profit, thousand Litas	1,120.1	878.4	3,016.6
Gross profitability	5.2%	3.5%	8.3%
Net profitability	1.8%	1.7%	3.1%
Current liquidity ratio	0.98	1.00	1.11
Acid test (Quick) ratio	0.97	0.49	1.03

The main performance indicators of Baltlitstroij OOO are as follows:

The company is planning to maintain its activities in Kaliningrad Region. In 2014 the contract was signed for construction of the municipal waste landfill in the town of Nieman, Kaliningrad Region.

The authorised capital of the company amounts to 12,000 thousand Rubles, 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. As at 31 December 2013 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 and complying with the requirements of the banks, which provide project financing.

	2011	2012	2013
Income from sales, thousand Litas	237.1	1,039.0	2,566.9
Financial and investment activities, thousand Litas	-1,417.5	3,096.0	-2,336.0
Net profit, thousand Litas	-1,809.7	2,210.0	-2,988.0
Return on equity (ROE)	-16.67	13.27	-19.82
Current liquidity ratio	1.75	1.88	1.63
Acid test (Quick) ratio	1.74	1.83	1.60

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

The plans for the year 2014 include changes in the organisational structure of the company, keeping developing real estate projects in Lithuania and selling the project of Baltevromarket in Kaliningrad Region.

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 at 31 December 2013, the authorized capital of the company is 49,404,500 Litas and it is divided into 494,045 registered ordinary shares with the nominal value of 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.

In 2013 the company's income increased by 61 per cent and amounted to 3,243.3 thousand Litas. The main performance indicators of Kingsbud Sp.zo.o. are as follows:

	2011	2012	2013
Income from sales, thousand Litas	2,377.3	2,013.6	3,243.3
Gross profit, thousand Litas	278.2	176.2	223.0
Net profit, thousand Litas	80.1	-9.3	19.1
Gross profitability	11.7%	8.8%	6.9%
Net profitability	3.4%	-0.5%	0.6%
Return on equity (ROE)	1.69	-22.16	31 21
Current liquidity ratio	1.75	1.19	1.22
Acid test (Quick) ratio	1.75	1.15	1.10

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.

Teritorija OOO (company code 3528202650). The company is involved in real estate preparation and sales.

In November 2013 the Board of Panevėžio statybos trestas AB adopted a resolution to acquire the company Teritorija OOO and provide financing to implementation of a real estate project in Cherepovets. The company was acquired in December 2013.

The main shareholder of the company is Panevėžio statybos trestas AB (87.5%).

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

In 2013 the income of the Group was lower by 2 per cent compared to that of 2012 and amounted to 294.7 million Litas (300.1 million Litas in 2012). In 2013 the company received income of 202.9 million Litas (262.8 million Litas in 2012). During the reporting year the PST Group generated the net profit in the amount of 1.03 million Litas, whereas in 2012 the profit the PST Group amounted to 5.05 million Litas. In 2013 the Company generated the net profit in the amount of 0.362 million Litas, whereas in 2012 the net profit amounted to 1.4 million Litas.

Income and net profit variation for the Company:

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

The results (in thousands Litas) of the parent company and the Group of Panevėžio statybos trestas AB for the years 2011 through 2013 are as follows:

	Group			Company
2011	2012	2013	Items	2011	2012	2013
285,549	300,142	294.698	Income	218,714	262,847	202,935
264,019	277,379	266,847	Cost	204,115	247,430	190,273
21,530	22,763	27,851	Gross profit	14,599	15,417	12,662
7.54	7.58	વે 45	Gross profit margin (per cent)	6.67	5.87	6.24
6,016	1,454	5,900	Operating result	4,153	1,431	65
2.11	0.48	2	Operating result from turnover (per cent)	1.9	0.54	0.03
10.792	12,206	6,361	Profit before taxes, interest, depreciation and amortization PIBITID A	9,857	6,596	3,312
3.8	4.1	2.16	EBITDA margin (per cent)	4.51	2.51	1.63
0.31	1.68	0.35	Nets profit (loss) margin (per cent)	0.73	0.55	0.18
0.09	0.28	0.06	Profit (loss) per share (Litas)	0.1	0.09	0.02
0.8	4.35	0.86	Return on equity (per cent) (ROE)	1.22	1.1	0.27
0.39	2.14	0.44	Return on assets or asset profitability (ROA)	0.77	0.72	0.20
0.73	3.75	0.72	Return on investments (ROI)	1.2	1.08	0.27
1.79	1.94	2.08	Current liquidity ratio	1.82	2.08	2.36
1.31	1.36	1.56	Acid test (Quick) ratio	1.69	1.94	2.31
0.49	0.49	0.52	Asset to equity ratio	0.63	0.66	0.72
6.84	7.1	7.35	Book value of a share	7.98	8.07	8.11
41.9	11.6	61.7	Ratio of share price and profit (P/E)	38.6	36.2	176.2
0.55	0.45	0.53	Ratio of share price and book value (P/BV)	0.47	0.4	0.48

The critical impact on the results of the Company and the Group is attributable to Ruble conversion to Litas in the items of the balance sheets provided for the branch, representative office and subsidiary company of Panevėžio statybos trestas AB, Baltlitstroij OOO and the subsidiary company of PST investicijos UAB, Baltevromarket ZAO ISK, all of them operating in Russia. Due to significant fall in exchange rate of the Russian Ruble, the loss suffered from financial activities over the year 2013 amounted to 6.6 million Litas.

Russian ruble (RUB)

01/01/2013 - 31/12/2013

Income by activity types

The main income of the company by activity types is from building and construction activities. In 2013 the income of the Group from building and construction activities totalled 92%, the income from real estate amounted to 0.8%, made products and other income amounted to 7.2%. In 2012 the income of the Group from building and construction activities totalled 95.6%, the income from real estate amounted to 0.3%, other income amounted to 4.1%.

		Group		Company
million Litas	2011	2012	2013	2011	2012	2013
Construction works	274.45	286.89	271.21	218.71	262.85	202.94
Real estate	0.24	0.99	2.21
Made products	6.37	6.79	20.03
Other	4.50	5.47	1.24

Operating income (million Litas) by countries:

		Group		Company
million Litas	2011	2012	2013	2011	2012	2013
I ithuania	194.24	219.19	175.69	182.57	224.10	161.06
Russian Federation	74.47	68.43	103.66	25.36	35.01	40.05
Scandinavian countries	4.46	9.60	11.77		3.73
United Kingdom	10.78			10.78
Latvia			1.83			1.83
Other countries	1.04	2.92	1.76

In 2013 the main activity of the company was mainly performed in Lithuania and made 79.4% of all works carried out by the company (85.3% in 2012). The income of the Group from the works performed inside the country made 59.6% of the income whereas in 2012 it was 73%.

Environment protection

Quality, environment protection, occupational health and safety play a very important role in activities of PST. Quality (ISO 9001), environmental (ISO 14001) and occupational health and safety management systems introduced and available at the Company allow taking proper care of these factors. Assessments of professional risk are carried out, analyses are performed and measures for risk reduction or elimination are taken for each site. For the purposes of healthy environment saving and pollution prevention ensuring at the initial stage of each project an Environment Protection Plan including specific measures for significant activity management is prepared. In 2008 the Lithuanian National Accreditation Bureau accredited the Construction Laboratory of the Company in accordance with LST EN ISO/IEC 17025:2005 for the period of 5 years, thus granting it the right to perform tests of building materials.

Employees

Professional, competent and responsible employees are the biggest asset of PST. Therefore, much attention is paid to motivation of employees: environment favourable for generation and implementation of new ideas is being created, sharing of information is being promoted. Loyalty and constant training of employees allow the company achieving planned targets and earning particularly favourable appreciation of the customers. In modern environment, competence of employees is one of the key factors describing the competitiveness of the company. While taking this factor into account, the company encourages employees in all organizational levels to learn and improve their skills. The employees are motivated not only by material incentives competitive salaries, progressive bonus system but also by exceptional quality of working environment. In co-operation with IT professionals and following global technologies, we continuously invest in creation, purchase of new software programs and their adapting in everyday activities.

Number of employees on	2012		2013
payroll	Group	Company		Company
Management	28	12	29	12.3
Specialists	308	232	295	227.0
Workers	852	694	800	621

As at 31 December 2013, the number of employees in the group was 1,064, in the company -789.

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	30	26				()
Specialists	301	231	10	47	12
Workers	733	38	13	198	389	તે રે

Average gross wages (Litas):

Average salary/wage LTL	2012		2013
	Group	Company	Group	Company
Management	7.061	8,785	7,597	8,381
Specialists	3,587	3,661	3,492	3,572
Workers	1.981	1.988	2.219	2,208

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

In 2013 the company paid much attention to qualification improvement. Training in the company is done in three directions using:

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

9. IMPORTANT EVENTS HAVING OCCURRED SINCE THE END OF THE PRECEDING FINANCIAL YEAR

On 22 March 2013 Panevėžio statybos trestas AB signed the contract with the State Institution the Directorate of the Vilnius Castles for re-erection of Part B of the Palace of the Grand Dukes for the amount of 61.3 million Litas. The preliminary date for work completion is planned for 31 December 2017.

On 23 May 2013 Panevėžio statybos trestas AB signed the contract with Turto bankas VĮ for construction of the main and auxiliary buildings of Klaipeda City Police Headquarters. The total value of the contract, including VAT, amounts to 61 million Litas. The total duration of the project is 18 months.

On 23 May 2013 Panevėžio statybos trestas AB signed the contract with State Service for Protected Areas under the Ministry of Environment for establishment of visitors' centre in Žagare Regional Park. The total value of the contract, including VAT, amounts to 9.8 million Litas. The total duration of the project is 6 months with a possibility to extend the contract for 8 more months.

On 11 June 2013 Panevėžio statybos trestas AB signed the contract with Vilnius University for construction of the Joint Centre for Life Sciences. The total value of the contract, including VAT, amounts to 106.46 million Litas. The total duration of the project is 21 months.

On 8 July 2013 Panevėžio statybos trestas AB signed the contract with the Ministry of National Defence of the Republic of Lithuania for construction of the Aviation Fuel Base (engineering infrastructure facilities, transportation lines - access roads, railway) at the Air Force Base of the Lithuanian Armed Forces in Šiauliai. Duration of the project is 18 months. The beginning of works is scheduled for July 15.

On 24 July 2013 Panevėžio statybos trestas AB signed the contract with Klaipėdos profesinio mokymo ir reabilitacijos centras VšĮ (Klaipėda Vocational Training and Rehabilitation Centre) for construction of new buildings. The newly built office building will be equipped with driver education classes and storage for visual aid exhibits, whereas practical training of drivers of various categories will take place on a new training track by creating artificial obstacles for driving (wet road, rain, sliding road surface). The total value of the contract including VAT exceeds 15 million Litas.

On 30 October 2013 Panevėžio statybos trestas AB signed the contract with Schmitz Cargobull Baltic UAB for the factory expansion and area landscaping. The area of the new building addition will be nearly 3,000 square meters and works are going to be completed by July 2014.

10. INFORMATION ON RESEARCH AND DEVELOPMENT ACTIVITIES PERFORMED BY THE COMPANY

In 2013 the Company performed market research in the Kingdom of Sweden and the Republic of Latvia to investigate possibilities for activity expansion for Panevėžio statybos trestas AB.

On the basis of the co-operation agreement between Vilnius Gediminas Technical University and Panevežio statybos trestas AB, experimental research was carried out with two reinforced concrete slabs with remaining plastic inserts.

11. PERFORMANCE PLANS AND FORECASTS OF THE COMPANY

The coming year still will not to be easy for the company. 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 a problem. 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 shareholders' value.

12. AUTHORISED CAPITAL OF THE ISSUER AND ITS STRUCTURE

As at 31 December 2013 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.

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

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

13. INFORMATION ON THE SHAREHOLDERS OF THE ISSUER

As at 31 December 2013, the number of shareholders holding or controlling more than 5 per cent of the authorised capital of the company was 2,075:

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) clients Liivalaia 8, Tallinn Estonia Company code: 10060701	998,198	6.11	6.11
Freely negotiable shares	7,212,870	44.11	44.11

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.

14. 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.

Dividends are taxable in accordance with the Law on Income Tax of Individuals and Law on Corporate Income Tax of the Republic of Lithuania.

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.

The General Meeting of Shareholders of Panevėžio statybos trestas AB that took place on 25 April 2013 made the decision to pay dividends in the amount of 408,705 Litas for the year 2012. The dividends were paid by DNB bankas AB in accordance with the agreement signed. As at 31 December 2013, 98.54 per cent of dividends were paid.

	Profit of financial year allocated for dividends
	2008	2009	2010	2012
Total amount allocated for dividends, Litas	1,144,500	1,144,500	1,144,500	408,750
Dividends per share	0.07	0.07	0.07	0.025
Ratio of dividends to net profit, %	2.4%	23.8%	11.3%	28.2%
Dividend profitability (dividends per share / share price as at the end of the period), 0/0	4.7%	1.8%	1.0%	0.8%

15. ALL RESTRICTIONS OF SECURITIES TRANSFER

Not relevant.

16. DESCRIPTION OF MAIN INVESTMENTS MADE DURING THE REPORTING PERIOD INCLUDING THEIR AMOUNT

All investments are provided in the Notes to the Separate Financial Statements (Note 15) and the Notes to the Consolidated Financial Statements (Note 1).

17. ALL AGREEMENTS BETWEEN SHAREHOLDERS WHICH ARE KNOWN TO THE ISSUER AND WHICH MAY RESTRICT TRANSFER OF SECURITIES AND (OR) VOTING RIGHTS

None.

18. AUTHORIZATIONS OF ISSUER'S BODIES TO ISSUE AND PURCHASE ISSUER'S SHARES

None.

19. 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.

20. 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 members of 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 Managing Director shall organize the 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	Number of shares	Capital, %	Votes, 0/0
Tertius IJAB		704,638	80	80
Panevėžio keliai AB	Chairman of the Board	531,675	28.47	28.47
Lauktuvės jums UAB	Chairman of the Board	11,069	50.15	50.15
Pokštas UAB		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 valdyba AB		21,490	9.29	9.29
Naujasis Užupis UAB	Chairman of the Board
Panevėžys 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	Chairman of the Board
Convestus UAB	Vice-President, Chairman of the Board	50,000	રે જે	રે0
Alproka UAB	Chairman of the Board
Kauno tiltai AB		492	0.31	0.31
Panoden UAB	Member of the Board

Term of office: November 2010 through November 2014

No previous convictions.

Company name	Capacity	Number of shares	Capital, %	Votes, %
Panevėžio keliai AB	Member of the Board	529,861	28.33	28.33
Lauktuvės jums UAB	Member of the Board	11,001	49.85	49.85
Pokštas 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 ZUT UAB	Member of the Board	1,057	48.98	48.98
Panevėžys UAB	Member of the Board	157,225	49.98	49.98
Specializuota komplektavimo valdyba AB		21,470	9.28	9.28
PST investicijos UAB	Chairman of the Board	12,644	2.9	2.9
Naujasis Užupis UAB	Member of the Board
Convestus UAB	President, Member of the Board	50,000	રેી	50
Alproka UAB	Member of the Board
Kauno tiltai AB		492	0 31	0.31
Meinora UAB	Director	100	100	100
Serana UAB	Director	650	તે રે	ે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 ABRAMAVIČIENĖ – the Member of the Board. No membership in the capital of the company. Membership in the activities of the companies below:

Company name	Capacity	Number of shares	Capital, %	Votes, %
Convestus UAB	Internal auditor
Panevėžio keliai AB	Member of the Board
Ukmergės keliai UAB	Member of the Board

Terms of office: November 2010 through November 2014

No previous convictions.

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

Company name	Capacity	Number of shares	Capital, %	Votes, %
Akvalda UAB		500	33.33	33.33
Emulteka UAB		11	11	11
Bass UAB		40	40	40
Panevėžio statybos trestas AB	Member of the Board
Panevėžio keliai AB	Member of the Board	101,735	5.45	5.45

Terms of office: November 2010 through November 2014

No previous convictions.

ARTURAS BUČAS – the Member of the Board. No membership in the capital of the company.

Membership in the activities of the companies below:

Company name	Capacity	Number of shares Capital, % Votes, %
Dvarčionių keramika AB	Shareholder
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 ŠIRVINSKIENE - Chief Accountant of the company. Holds no shares of the company. University Education (LŽUA, 1983, accounting - economics).

No previous convictions.

Information on amounts calculated to managers during the reporting year (Litas):

In 2013 there were no special payments to the members of the Company Board.

Information on wages for managers of the issuer for 2013

thousands Litas	2013
For the members of the Board (tantiemes and wages)	169
In average for one member of the Board (per month)	3
Members of administration (Managing Director and Chief Accountant)	212
In average for one member of administration (per month)	9

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 duties of the audit committee are as follows:

• 1) to monitor the financial reporting process;
• 2) to monitor the effectiveness of the company's internal control, internal audit where applicable, and risk management systems;
• 3) to monitor the carrying out of audit;
• 4) to monitor the independence and objectivity of the auditor or audit firm.

The audit committee at Panevėžio statybos trestas AB consists of the following members:

Lina Ragelienė - Deputy Chief Accountant of Panevėžio statybos trestas AB. Holds no shares of the Company.

Regina Sukarevičienė – Economist of Panevėžio statybos trestas AB. Holds no shares of the Company.

Irena Kriaučiūnienė – Independent Auditor of IDG auditoriai UAB. Holds no shares of the Company.

21. 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.

22. 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.

23. INFORMATION ON SIGNIFICANT TRANSACTIONS BETWEEN THE RELATED PARTIES

All transactions between the related parties are provided in the Notes to the Separate Financial

Statements (Note 28) and the Notes to the Consolidated Financial Statements (Note 28).

24. INFORMATION ON COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

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

Title of Notification	Category of Notification	Language	Date
Unaudited Performance Results of Panevėžio statybos trestas AB Company and Group for the Year 2013	Interim information	Lt, En	28 Feb. 2014
Investor's Calendar for 2014	Other information	Lt, En	15 Jan. 2014
Unaudited Performance Results of Panevėžio statybos trestas AB Company and Group for Nine Months of 2013	Interim information	Lt, En	29 Nov. 2013
Resolutions Adopted by Extraordinary General Meeting of Shareholders	Notification on material event	Lt, En	27 Nov. 2013
Draft Resolutions of Extraordinary General Meeting of Shareholders	Notification on material event	Lt, En	5 Nov. 2013
Panevėžio statybos trestas AB signed the contract with Schmitz Cargobull Baltic UAB	Notification on material event	Lt. En	30 Oct. 2013
Convening of Extraordinary General Meeting of Shareholders	Notification on material event	Lt, En	28 Oct. 2013
Unaudited Performance Results of Panevėžio statybos trestas AB Company and the Group for the First Half of 2013	Interim information	Lt, En	30 Aug. 2013
Panevėžio statybos trestas AB will build Driver Training Centre ir Klaipėda	Notification on material event	Lt, En	24 July 2013
Panevėžio statybos trestas AB signed the contract with the Ministry of National Defence of the Republic of Lithuania	Notification on material event	Lt, En	8 July 2013
Panevėžio statybos trestas AB signed the contract with Vilnius University	Notification on material event	Lt, En	11 June 2013
Panevėžio statybos trestas AB signed the contract with State Service for Protected Areas under the Ministry of Environment	Notification on material event	Lt, En	23 May 2013
Panevėžio statybos trestas AB signed a contract with Turto bankas VI	Notification on material event	Lt, En	23 May 2013
Panevėžio statybos trestas AB will sign a contract with Turto bankas VI	Notification on material event	Lt, En	23 May 2013
Unaudited Performance Results of Panevėžio statybos trestas AB Company and the Group for the First Quarter of 2013	Notification on material event	Lt, En	21 May 2013

25. PUBLICLY DISCLOSED INFORMATION

Title of Notification	Category of Notification	Language	Date
Annual Information Approved by Annual General Shareholders Meeting of Panevėžio statybos trestas AB	Annual information	Lt, En	25 April 2013
Resolutions of Annual General Meeting of Shareholders	Notification on material event	Lt, En	25 April 2013
Postponed Hearing	Notification on material event	Lt, En	9 April 2013
Draft Resolutions of General Meeting of Shareholders	Notification on material event	Lt, En	4 April 2013
Convening of the Annual General Meeting of the Shareholders	Notification on material event	Lt, En	25 March 2013
Panevėžio statybos trestas AB signed the contract with the Directorate of the Vilnius Castles for re-erection of the Palace of the Grand Dukes, Part B	Notification on material event	Lt, En	22 March 2013
PST won the Tender for the Palace of the Grand Dukes, Part B, Re-erection Announced by the Vilnius Castles Directorate	Notification on material event	Lt. En	8 March 2013
Unaudited Performance Results of Panevėžio statybos trestas AB Company and the 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

All notifications 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. Information on the material events of the company is presented through the information system of NASDAQ OMX Vilnius Stock Exchange (Globe Newswire) and published on the website of the company.

Managing Director

Dalius Gesevičius

Appendix 1

Disclosure form by Panevėžio statybos trestas AB concerning the compliance with the Governance Code for the companies listed at the Vilnius Stock Exchange

Following Paragraph 3, Article 21 of the Law on Securities of the Republic of Lithuania and Item 24.5 of the Listing Rules of NASDAQ OMX Vilnius AB, the public limited liability company Panevėžio statybos trestas hereby discloses its compliance with the Governance Code for the companies listed at NASDAQ OMX Vilnius and its specific provisions. In the event of non-compliance with the Code or certain provisions thereof, it is indicated which provisions are not complied with and the reasons of such non-compliance:

PRINCIPLES/ RECOMMENDATIONS	YES/NO / NOT APPLICABLE	COMMENTARY
Principle I: Basic Provisions The overriding objective of a company should be to operate in common interests of all the shareholders by optimizing over time shareholder value.
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 on the website http//www.pst.lt, in the notices for the Vilnius Stock Exchange, periodic notices to the BNS news agency, notices in the newspapers and at the press conferences.
1.2. All management bodies of a company should act in furtherance of the declared strategic objectives in view of the need to optimize shareholder value.	Yes
1.3. A company's supervisory and management bodies should act in close co-operation in order to attain maximum benefit for the company and its shareholders.	Yes	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 should ensure the strategic guidance of 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 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	Yes	The company board is made of 5 members and this number is 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 company's board and 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 essence and nature applicable exclusively to the supervisory board (e.g. formation of the committees), should not be applied to the competence and functions of these bodies according to the Law ronmander of the Republic of Lithuania (Official Gazette, 2003, No 123-5574) are different. For instance, item 3.1 of the Code concerning oversight of the management bodies applies to the extent it concerns the oversight of the chief executive officer of the company, but not of the board itself; item 4.1 of the Code concerning recommendations to the management bodies applies to the extent it relates to the provision of recommendations to the company's chief executive officer; item 4.6 of the Code concerning independence of the collegial body elected by the general meeting from the company's management bodies is applied to the extent it concerns independence from the chief executive 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 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 board.	No	The supervisory board is not formed.
2.7. Chairman of the collegial body elected by the general shareholders' meeting may be a person whose current or 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.	Yes	The chairman of the board is not and has never been the chief executive officer of the company.

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	Though there are no independent members of the board at the
be elected by a general shareholders' meeting (hereinafter in		company, the board ensures objective and fair monitoring of
this Principle referred to as the 'collegial body') should		the company's management bodies as well as representation of
ensure objective and fair monitoring of the company's		minority shareholders.
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/No	Information on the positions taken by the members of the board or their participation in other companies, operation is continuously collected and compiled, and at the end of every year it is revised and presented in the reports prepared by the company.
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.	Y es	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 sufficient" 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. Such additional remuneration includes 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	No	All five members of the board are the members of the board of the largest shareholder - the related company.
plans (inclusive of deferred compensations);

⁴ The Code does not provide for a concrete number of independent members to comprise a collegial body. Many codes in foreign countries fix a concrete number of independent members (e.g. at least 1/3 or 1/2 of the members of the collegial body) to comprise the oodlegial body. However, having regard to the institution of independent members in Lithuania and potential problems in finding and electing a concrete number of independent members, the Code provides for a more flexible wording and allows the midnes themselves to decide what number of independent members is sufficient. Of course, a larger number of independent

wenteers in a collegial body is encouraged and will constitute an example of more suitable organise.
* It is notable that in some companis all members of the collegial body elected by the nates 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 of 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 (commonlaw 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.

Not applicable

3.9. Necessary information on conclusions the collegial 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.	No	The practice of independence assessment and disclosure for the members of the board is not applied at the company.
3.10. When one or more criteria of independence set out in 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.	No	The practice of independence assessment of and disclosure for the members of the board is not applied at the company.
3.11. In order to remunerate members of a collegial body for their work and participation in the meetings of the collegial body, they may be remunerated from the company's funds. . The general shareholders' meeting should approve the amount of such remuneration.	Yes	The general shareholders' meeting approves the amount of tantiemes allocated to the members of the board. Referring to the International Financial Reporting Standards, tantiemes for the members of the board are attributed to operating expenses of the company.

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) remailed or and 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 compensation to members of the supervisory board or the board. So it seems that the Law contains no prohibition to remunerate members of the board for 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 board participated at the meeting of the board and each of them devoted sufficient time to perform the duties as a member of the board. In all meetings of the board taken place in 2013 there was quorum prescribed by the legal acts. The members of the board participating at the meeting are recorded in the minutes of the meeting. In 2013 three members of the board participated in all meetings of the board, participation of two members of the board is 80 per cent.
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

^? It is notable that companies can make this requirement more stringent 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 of 3/4 of to partified in the measures, which ensure active paticipation in the meetings of the collegial body, are encouraged and will constitute an example of more suitable corporate governance.

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.	Not applicable	Transactions with the members of managing bodies are not concluded. Only usual activity transactions are concluded with the main shareholder.
4.6. The collegial body should be independent in passing 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 0. 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 its committees are provided with sufficient and 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.	Yes

¹⁰ In the event the collegial body elected by the general shareholders' me reommendation concerning is 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 committees . 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 25 April 2013 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
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.	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.

^" The Law of the Republic of Lithuania on Audit (Official Gazette, 2008, No 82-53233) 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).

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.
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 made public on the company's website.
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.	Not	The committee is not formed.
4.12.1. Key functions of the nomination committee should be the following:	applicable	The collegial management body of the company, the board, performs the function of the nomination committee.
1 ) 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;
2) 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;
3) Assess on regular basis the skills, knowledge and experience of individual directors and report on this to the collegial body;
4) Properly consider issues related to succession planning;
5) 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.	Not	The committee is not formed.
4.13.1. Key functions of the remuneration committee should be the following:	applicable	The collegial management body of the company, the board, performs the function of the remuneration committee.
1 ) 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;
2) 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;

3) 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;
4) Periodically review the remuneration policy for executive directors or members of management body, including the policy regarding share-based remuneration, and its implementation;
5) Make proposals to the collegial body on suitable forms of contracts for executive directors and members of the management bodies;
6) Assist the collegial body in overseeing how the company complies with applicable provisions regarding the remuneration-related information disclosure (in particular policy applied and individual the remuneration remuneration of directors);
7) 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:
1) Consider general policy regarding the granting of the above mentioned schemes, in particular stock options, and make any related proposals to the collegial body;
2) Examine the related information that is given in the company's annual report and documents intended for the use during the shareholders meeting;
3) 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.	Y es	On 25 April 2013 the audit committee was elected during the
4.14.1. Key functions of the audit committee should be the		annual general shareholders' meeting. The audit committee
following:		consists of three members (including one independent member). The audit committee organizes its work following
1) Observe the integrity of the financial information provided by the company, in particular by reviewing the relevance and consistency of the accounting methods used by the company and its group (including the criteria for the		the rules of the audit committee approved during the shareholders' meeting.
consolidation of the accounts of companies in the group);
2) 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;
3) 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;
4) 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;
5) 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;
6) 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	There is no assessment practice of internal activities and informing on that available at the company.

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 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.	Yes	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.

¹² The frequency of meetings of the collegial body provided for in the recommendation must be applied in those cass when both - The Iregioney of the entegar over problem over probe board and the supervisory board. In the event only one additional collegial addrivel on 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 conceming the investment, transfer, lease, mortgage or acquisition of the long-terms assets 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 asmonod approved by the 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 oultied 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 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	The company does not follow this recommendation as it is not possible to ensure text protection and identify the signature of a voting person. Furthermore, in the company's opinion, so far there was no need for any modern technologies at the shareholders' meeting for the purposes of participation and voting via electronic means of communication.

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 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.	Yes	The members of the management bodies act in such a manner that allows avoiding conflict of interests; therefore, in practice there is not a single event thereof.
7.2. Any member of the company's supervisory and 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.	Yes
7.3. Any member of the company's supervisory and 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 value or concluded when carrying out routine low 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.	Not applicable
7.4. Any member of the company's supervisory and management body should abstain from voting when decisions concerning transactions or other issues of personal or business interest are voted on.	Yes

Principle VIII: Company's remuneration policy

Remuneration policy and procedure for approval, revision and disclosure of directors' remuneration established in the company Itchindler and proceded of the applined, we in determining remuneration of directors, in addition it should ensure sublicity and transparency both of company's remuneration policy and remuneration of directors.

8.1. A company should make a public statement of the remuneration policy (hereinafter the company's 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 well as posted on the company's website.	No	The company observes the motivation system of the directors approved by the board. The company makes no public statements of the remuneration policy as it is an internal and confidential document of the company.
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 following information:	No	Recommendations provided in item 8.1 are not followed.
l ) Explanation of the relative importance of the variable and non-variable components of directors' remuneration;
2) Sufficient information on performance criteria that entitles directors to share options, shares or variable components of remuneration;
3) An explanation how the choice of performance criteria contributes to the long-term interests of the company;
4) An explanation of the methods, applied in order to determine whether performance criteria have been fulfilled;
5) Sufficient information on deferment periods with regard to variable components of remuneration;
6) Sufficient information on the linkage between the remuneration and performance;
7) The main parameters and rationale for any annual bonus scheme and any other non-cash benefits;
the policy regarding 8 ) Sufficient information on termination payments;
9) Sufficient information with regard to vesting periods for share-based remuneration, as referred to in point 8.13 of this Code;
10) Sufficient information on the policy regarding retention of shares after vesting, as referred to in point 8.15 of this Code;
11) 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;

12) A description of the main characteristics of supplementary pension or early retirement schemes for directors;
statement should not include 13) Remuneration commercially sensitive information.
8.4. Remuneration statement should also summarize and 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.	No	The contracts with the chief executive officers are executed and approved by the board. These contracts are confidential and their content as well as provisions are not made public.
8.5. Remuneration statement should also contain detailed information on the entire amount of remuneration, inclusive 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.	No	Recommendations provided in item 8.1 are not followed.
8.5.1. The following remuneration and/or emoluments- related information should be disclosed:
1) 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;
2) The remuneration and advantages received from any undertaking belonging to the same group;
3) 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;
4) 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;
5) 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;
6) 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:
1) The number of share options offered or shares granted by the company during the relevant financial year and their conditions of application;

2) 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;
3) 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;
4) 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:
1) When the pension scheme is a defined-benefit scheme, changes in the directors' accrued benefits under that scheme during the relevant financial year;
2) 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 be subject to predetermined and measurable performance criteria.	Yes	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 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.	Yes	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.	Not applicable	The company did not pay any variable components of remuneration which had been awarded on the basis of data which subsequently proved to be manifestly misstated.

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	Termination payments are paid following the laws of the Republic of Lithuania.
8.11. Termination payments should not be paid if the termination is due to inadequate performance.	No	Termination payments are paid following the laws 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 surnames 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	Recommendations provided in item 8.1 are not followed. The directors are not remunerated in shares.
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	Recommendations provided in item 8.1 are not followed. The directors are not remunerated in shares, share options or any other right to purchase company's shares.
8.15. After vesting, directors should retain a number of shares, until the end of their mandate, subject to the need to 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).	Not applicable	Recommendations provided in item 8.1 are not followed. The directors are not remunerated in shares, share options or any other right to purchase company's shares.
8.16. Remuneration of non-executive or supervisory directors should not include share options.	Not applicable	Recommendations provided in item 8.1 are not followed. The directors are not remunerated in shares, share options or any other right to purchase company's shares.
8.17. Shareholders, in particular institutional shareholders, should be encouraged to attend general meetings where appropriate and make considered use of their votes regarding directors' remuneration.	Not applicable	Recommendations provided in item 8.1 are not followed.

8.18. Without prejudice to the role and organization of the bodies responsible for setting directors' relevant 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.	Not applicable	Recommendations provided in item 8.1 are not followed. The directors are not remunerated in shares, share options or any other right to purchase company's shares.
8.19. Schemes anticipating remuneration of directors in shares, share options or any other right to purchase shares or 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.	Not applicable	There is no scheme anticipating remuneration of directors in shares, share options or any other right to purchase shares or be remunerated on the basis of share price movements adopted at the company.
8.20. The following issues should be subject to approval by the shareholders' annual general meeting:	Not applicable
1) Grant of share-based schemes, including share options, to directors;
2) Determination of maximum number of shares and main conditions of share granting;
3) The term within which options can be exercised; 4) The conditions for any subsequent change in the exercise
of the options, if permissible by law;
5) 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 Association allow, any discounted option arrangement under	Not 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 applicable to schemes allowing for participation under	Not 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 that	Yes	The company respects all rights of the stakeholders, allows the
the rights of stakeholders that are protected by law are		stakeholders to participate in corporate governance in the
respected.		manner prescribed by law. Detailed information on scheduled
		events of the shareholders is made public following the
		procedure prescribed by law, the investors (shareholders) have
		sufficient opportunities to familiarize themselves with the
9.2. The corporate governance framework should create	Yes	relevant information and vote in adopting decisions.
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 governance process, they should have access to relevant information.	Yes
Principle X: Information disclosure and transparency
regarding the company, including the financial situation, performance and governance of the company.		The corporate governance framework should ensure that timely and accurate is made on all material information
10.1. The company should disclose information on:	Yes	The information mentioned in this recommendation is disclosed in notifications of material events through the
1) The financial and operating results of the company;		information disclosure and distribution system Globenewswire
2) Company objectives;		used by NASDAQ OMX, on the company website, in the
3) Persons holding by the right of ownership or in control of a block of shares in the company;		company's annual and intermediate information statements to the extent required by legal acts and International Financial
4) Members of the company's supervisory and management bodies, chief executive officer of the company and their remuneration;		Reporting Standards valid in the European Union.
5) Material foreseeable risk factors;
6) Transactions between the company and connected persons, as well as transactions concluded outside the course of the company's regular operations;
other 7) Material issues regarding employees and stakeholders;
8) 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.
10.2. It is recommended to the company, which is the parent of other companies, that consolidated results of the whole group to which the company belongs should be disclosed when information specified in item 1 of Recommendation 10.1 is under disclosure.	Yes
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/No	See the commentary to recommendation 3.2, principle III. The company does not prepare and make public the remuneration policy report - see the commentary to recommendation 8.1, principle VIII.

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Yes/No
Yes	The company presents the information through the information disclosure system Globenewswire used by NASDAQ OMX 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 Stock Exchange.
Yes	The company plans to sign a contract with Vilniaus vertybinių 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 Globenewswire used by NASDAQ OMX will also be published on the company's website.
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 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.	Yes	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	In 2013 the audit firm did not provide any services in tax
its shareholders the level of fees paid to the firm of auditors		consulting.
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.