Panevezio Statybos Trestas

Interim / Quarterly Report • Aug 28, 2015

PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated Interim Financial Statements and Consolidated Interim Report for Six Months of 2015 (UNAUDITED)

28 August 2015 Panevėžys

$\mathbf{1}$

STATEMENT OF EXECUTIVE OFFICERS OF THE COMPANY

Hereby we confirm that based on the information available to us, the interim financial statement of the company and the group provided for the six months of the year 2015 made in accordance with the International Financial Reporting Standards is true and shows the assets, liabilities, financial state, profit or loss and cash flows of Panevėžio statybos trestas AB and the Group of Panevėžio statybos trestas AB in a correct manner, and that the review of business development and performance is indicated correctly in the interim report.

D Geslust

Dalius Gesevičius Managing Director Panevėžio statybos trestas AB

retuelle

Danguolė Širvinskienė Chief Accountant Panevėžio statybos trestas AB

AB "Panevėžio statybos trestas" Imonės kodas 147732969 PVM mokėtojo kodas LT477329610 VI Registrų centro Pancvėžio filialas Registravimo pažymėjimo Nr. 013732 http://www.pst.lt

P.Puzino g. 1, LT-35173, Panevěžys
Tel. +370 45 505 503 Faks, +370 45 505 520 El.pastas pst@pst.lt

AB SEB bankas B/k 70440 A/s LT517044060002635252 AB "Swedbankas" B/k 73000 A/s Lt947300010000074994

Reporting period $1.$

The consolidated interim report has been prepared for six months of the year 2015 ended on 30 June 2015.

$2.$ Main data about the issuer

Name of issuer	Public limited liability company Panevėžio statybos
	trestas
Authorized capital	4,741,500 Euros
Address of registered office	P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania
Telephone	$(+37045)$ 505 503
Fax	$(+37045)$ 505 520
E-mail	pst@pst.lt
Legal-organization form	Public limited liability company
Registration date and place	30 October 1993, Panevėžys City Department
Registration No.	AB 9376
Code at the register of enterprises	147732969
VAT code	LT477329610
Administrator of legal entity register	State Enterprise Centre of Registers
Website address	www.pst.lt

Character of the main activity of the issuer $3.$

The main areas of activity of the Company and its subsidiaries (the Group) is designing and construction of buildings, constructions, installations and communications of various purposes both in and outside Lithuania, real estate development.

Information on the Group $\overline{4}$ .

As of 30 June 2015, the Group of Panevėžio statybos trestas AB consists of the following companies:

Subsidiaries	Type of operations	Share controlled (per cent)	Registered address
Skydmedis UAB	Construction: panel houses	100	Pramones 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	Marijonų Str. 36, Panevėžys Tel.: +370 45 461311
Alinita UAB	Construction: conditioning equipment	100	Tinklų 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
BALTILSTROIJ OOO	Construction	100	Sovetskij Ave. 43, Kaliningrad Tel.: 0074012350435
Teritorija OOO	Real estate development	87.5	Lunacharskovo Lane 43- 27, Cherepovets, Vologda County
PST Nordic AB	Construction	100	Krossgatan 25, 162 50 Vällingby, Stockholm County
PST Investicijos UAB	Real estate development	68	Verkių Str. 25C, Vilnius Tel.: +370 5 2728213
Subsidiaries of PST investicijos UAB:
Ateities projektai UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Šeškinės projektai UAB	Real estate development	100	Verkių Str. 25C, Vilnius
Verkių projektas UAB	Real estate development	100	Verkių Str. 25C, Vilnius
ISK Baltevromarket ZAO	Real estate development	100	Pobeda Square 10, Kaliningrad

Contracts with intermediaries in security public circulation 5.

Since 2013 accounting for financial instruments has been assigned to Financial Brokerage Company Finasta AB.

Data on trade in the securities of the issuer at the regulated markets 6.

The ordinary registered shares of Panevėžio statybos trestas AB, 16,350,000 pcs., the par value of each being 0.29 Euros, have been included in the official list of the Vilnius Stock Exchange (VSE) since 13 July 2006.

Share type	Number of shares	Par value	Total par value	Emission
	(pcs.)	(Euros)	(Euros)	code
Ordinary registered shares (ORS)	16,350,000	0.29	4,741,500	101446

Variation in the price of the Company shares at the Stock Exchange for the first half of 2015 $(Euros)$

Last price 30 June 2014	Last price 31 Dec. 2014	Average share price for I half of 2015	Highest price for I half of 2015	Lowest price for I half of 2015	Last price 30 June 2015
1.230 EUR	0.858 EUR	0.971 EUR	1.08 EUR	0.84 EUR	0.985 EUR

Authorized capital of the Company and its structure $7.$

As of 30 June 2015, the authorized capital of the Company is 4,741,500 Euros, it is divided into 16,350,000 ordinary registered shares (hereinafter referred to as ORS), the par value of one share being 0.29 Euros. All shares are intangible and fully paid. The property right for the shares is proved by the record in the stock accounts. The shares of Panevežio statybos trestas AB are traded at the Vilnius Stock Exchange. On 30 June 2015 the total number of the shareholders was 1848. The shareholders who under the ownership right hold or control more than 5 per cents of the authorized capital of the Company are as follows:

Full name 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 the 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, 15040 Tallinn, Estonia Company code: 10060701	991,289	6.06	6.06
Freely negotiable shares	7,219,779	44.16	44.16

Neither the Company nor any of its subsidiary companies or any other person who would act in his/her own name but in the favour and using the means of the Company has purchased any shares of the Company.

8. Information on the performance results of the issuer

Referring to the unaudited data, during the first half of 2015 the Group of Panevezio statybos trestas AB was on the income of 64.9 mln. Euros, that is by 1.6 times more than last year. In the first half of 2014 the income of the PST Group was 40.3 mln. Euros. The net profit of the Group was higher by 31 per cents in the first half of 2015, that is, it amounted to 2.1 mln. Euros, whereas in the first half of 2014 the net profit of the Group was 1.6 mln. Euros.

Referring to the unaudited data, during the first half of this year Panevėžio statybos trestas AB had the net profit in the amount of 1.653 mln. Euros, that is, by 19 per cents more compared to the net profit for the six months of 2014, which amounted to 1.390 mln. Euros. Compared to the first half of 2014 the income of the company has increased by 1.4 times and amounts to 41.144 mln. Euros. The income for the first half of 2014 amounted to 28.962 mln. Euros.

The net profit of the PST Company was conditioned by the successful operation on the main construction sites. The activities on all company sites are carried fluently according to the schedule. The company continues working on the construction of the Joint Centre for Life Sciences and related buildings at Sauletekio Ave. 9, Vilnius, 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 (NATO object), construction of textile production premises for Devold UAB in the area of the Panevėžys Free Economic Zone. In the first half of 2015 the construction of the Sludge Processing Plant was completed in Taurage District where waste water will be treated and sludge from Taurage Region will be utilised. Late July 2015 construction of Klaipėda County Police Headquarters was completed. Construction covered a new building of the headquarters together with a detention facility. During the first half of this year the contracts awarded and signed (construction of a new packaging production building for Smurfit Kappa Baltic UAB in Savanorių Ave. in Vilnius, construction of a new storage building and administration facilities of Liteargus UAB in the area of the Vilnius Airport, reconstruction of the National M.K. Ciurlionis School of Art at T. Kosciuškos Str. 11A, Vilnius) allows us expecting that PST will keep on operating in a stable manner resulting in profit and maintaining the high quality standard.

Risk factors related to the company activities:

• Shortage of qualified labour;
• Intense competition; $\bullet$

Aggressive behaviour on the part of Russia and variation in the rate of the Russian Rouble related thereto;

Damping.

Information on the types of risks arising to the Company and the Group, and risk management is provided in the Notes to the Separate Financial Statement (Note 4) and the Consolidated Financial Statements (Note 4) for the year ended on 31 December 2014.

The performance results of Panevezio statybos trestas AB and the Group are as follows
(thousands Euros):

	Group			Company
	I half of 2013	I half of 2014	I half of 2015	I half of 2013	I half of 2014	I half of 2015
Income	42,753	40,277	64,917	32,450	28,962	41,144
Gross profit	3,052	4,785	5,539	1,743	2,709	4,491
Gross profit margin (per cent)	7.14	9.45	8.53	5.37	9.35	10.9
Net profit	$-851$	1,620	2,124	$-324$	1,390	1,653
Nets profit margin (per cent)	$-1.99$	4.02	3.27	$-1$	4.8	4.02
Profit per share (Litas)	$-0.052$	0.098	0.13	$-0.02$	0.08	0.10
Profit before taxes, interest, depreciation and amortization EBITDA	$-385$	2,474	3,281	133	2,013	2,429
EBITDA margin (per cent)	$-0.9$	6.14	5.05	0.41	6.95	5.9
Return on equity (per cent) (ROE) Net profit Equity capital	$-2.58$	4.45	5.95	$-0.86$	3.49	4.13
Return on assets or asset profitability (ROA) Net profit Assets	$-1.37$	2.3	2.91	$-0.6$	2.46	2.63
Return on investments (ROI) Net profit Assets - Current debt	$-2.16$	3.87	5.54	$-0.84$	3.43	4.05
Current liquidity ratio Current assets Current liabilities	2.17	1.97	1.87	2.27	2.61	2.23
Critical liquidity ratio Current assets - Inventories Current liabilities	1.61	1.41	1.48	2.23	2.54	2.18
General liquidity ratio Equity capital Other liabilities	1.19	1.12	1.00	2.28	2.39	1.75
Asset to equity ratio	0.53	0.52	0.49	0.7	0.7	0.64
Book value per share	6.98	7.69	2.18	7.97	8.4	2.45
Ratio of share price and book value $(P/BV)$	0.56	0.55	0.45	0.49	0.51	0.40

Income and net profit variation for the Group:

Income and net profit variation for the Company:

Income by activity types (mln. Euros):

The operating income of the Company based on activity types is from building and erection activities. In the first half of 2015 the income from building and construction activities totalled 91.9%, the income from real estate amounted to 5.2%, made products amounted to 2.9%. In the first half of 2014 the income from building and erection activities totalled 95.1%, the income from real estate amounted to 1.2%, made products amounted to 3.7%.

	Group
	I half of 2013	I half of 2014	I half of 2015
Construction works	41.34	38.31	59.61
Real estate	0.19	0.48	3.36
Products produced	.22	.49

Income by countries (mln. Euros):

	Group
	I half of 2013	I half of 2014	I half of 2015
Lithuania	27.42	26.90	43.10
Russian Federation	13.90	9.25	19.07
Latvia		1.33	0.10
Scandinavian countries	0.56	2.57	2.01
Other countries	0.88	0.24

After closing the branch in Kaliningrad and the representative Office in Cherepovets, the income of Panevėžio statybos trestas AB for the first half of 2015 received from carrying activities in the area of Lithuania was 99.94 per cents. The income of the Group received from carrying activities in the area of the country was 66.4 per cents compared to 66.8 per cents in the first half of 2014.

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

In the first half of 2015 the company closed the branch in Kaliningrad and the representative Office in Cherepovets.

The company continues carrying its operations through the subsidiary companies of Panevėžio statybos trestas AB located in the Russian Federation. Therefore closing of the branch in Kaliningrad and the representative Office in Cherepovets had no significant impact on the financial results of the company.

During six months of this year Panevežio statybos trestas AB has signed several new contracts:

• with Smurfit Kappa Baltic UAB regarding the construction of a new building for packing production in Savanoriu Avenue in Vilnius. The project is expected to be implemented till the middle of December 2015. The new building will be located near the existing building, which was also constructed by Panevėžio statybos trestas AB. The new building will cover the area of 6655 square meters;

• with Litcargus UAB regarding the construction of a new storage building with a garage and administration facilities at Rodunios Road 2, Vilnius. The project is expected to be implemented in eight months. The total area of the new building will be about 3000 square meters;

• with the National M. K. Čiurlionis School of Art regarding reconstruction works at T. Kosciuškos Str. 11A, Vilnius. The project, the value of which including the VAT exceeds 5 million Euros, will be implemented in 3 years.

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

The company has the co-operation agreement signed with the Vilnius Gediminas Technical University. Together with the Department of Reinforced Concrete Structures the company participated in the project Creation of Hollow Core Concrete Floor Slab and Its Connection to Columns carried out by the University. The company created, made and presented to the scientists of the VGTU the plastic elements for lightening the concrete floor slab and made the samples of the floor slab for testing purposes. The scientists of the VGTU performed the research: made relevant calculations and tests, prepared the calculation methods applicable for the floor slabs of this type. The university handed over the report of the calculation methods to th company.

The company performs research of demand for construction services and market research for the real estate development. The company continues the successful introduction of innovative technologies in their activities. It aims not only to equip sites with state-of-the-art construction

equipment but also to make preparation and work planning for the new projects very fluent. To that effect investments are made in the state-of-the-art software and machinery. The company purchased the directional drilling equipment, extending the range of the provided trenchless technology services. The company is continuously improving design preparation using the already available and supplemented software packages allowing the complete design - all parts of the design - to be made in the BIM (Building Information Modelling) environment. The principles of BIM have already been started to be used on the site during the construction works. This allows getting detailed information on the required products and their quantities fast.

11. Employees

As of 30 June 2015, the number of employees in the Group was 1129, in the company – 841.

Number of	I half of 2014		I half of 2015
employees on payroll	Group	Company	Group	Company
Management	29	134	29	16
Specialists	294	227	293	230
Workers	760	573	810	599

Employee grouping by education in Panevėžio statybos trestas AB Group as of 30 June 2015:

Groups of employees	Payroll number	Higher university level education	Higher non- university education	Community college education	Secondary education	Incomplete secondary education
Management	29	25
Specialists	302	238	21	34
Workers	798	36	19	180	477	86

Average wage per	I half of 2014		I half of 2015
month, EUR	Group	Company	Group	Company
Management	1689	1967	2932	3748
Specialists	932	960	1190	1242
Workers	678	684	924	713

The average gross wage per employee per month:

Employment agreements do not include any specific rights and obligations for employees or a part thereof.

12. 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 the Shareholders by the qualified majority of votes that may not be less than 2/3 of all votes conferred by the shares held by the shareholders attending the meeting. The decision of the General Meeting of the shareholders regarding the amendment of the Articles of Association shall be adopted in accordance with the procedure set forth in Article 27 or 30 of the Law on Companies of the Republic of Lithuania.

13. 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 the Shareholders, the Board and the Managing Director. No Supervisory Board is formed in the company.

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

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

The activities of the Board are managed by the Chairman of the Board. The Chairman of the Board is elected by the Board from the members of the Board.

The Board elects and removes from the office the manager of the Company - the Managing Director, fixes his salary, sets other terms of the employment contract, approves his job description, gives incentives and imposes penalties.

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

The Board:

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	POSITION	NUMBER OF SHARES	CAPITAL, %	VOTES, $\frac{0}{6}$
Tertius UAB		704,638	80	80
Panevežio keliai AB	Chairman of the Board	531,675	28.47	28.47
Lauktuvės jums UAB	Member 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
Emulteka UAB		14	14.0	14.0
Gustonių ŽŪT UAB	Member of the Board	1,087	50.28	50.28
Specializuota komplektavimo valdyba AB		21,490	9.29	9.29
Naujasis Užupis UAB	Chairman of the Board
PST investicijos UAB	Member of the Board	16,407	3.32	3/32
Convestus UAB	Vice-President, Chairman of the Board	50,000	50	50
Alproka UAB	Chairman of the Board
Kauno tiltai UAB		492	0.31	0.31
Panoden UAB	Member of the Board	$-1$

Term of office: November 2014 through November 2018

Clean record

COMPANY NAME	POSITION	NUMBER OF SHARES	CAPITAL,%	VOTES, %
Panevėžio keliai AB	General Director	66,769	3.57	3.57
Akvalda UAB	Director	750	50.00	50.00
Skalduva UAB		42	42	42
Klovainių skalda AB	Member of the Board	541,467	10.1	10.1
Avia invest UAB		10,000	100	100
Istros aviaparkas UAB		2,000	100	100
Emulteka UAB		9	9	9
PST Investicijos UAB	Member of the Board			-

VIRMANTAS PUIDOKAS - 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 2014 through November 2018

Clean record

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

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, $\frac{0}{0}$	VOTES, $\frac{0}{0}$
Akvalda UAB		750	50	50
Emulteka UAB		11	11	11
Betono apsaugos sistemos UAB		40	40	40
Panevėžio statybos trestas AB	Member of the Board			$\blacksquare$
Panevėžio keliai AB	Member of the Board	83,058	4.45	4.45
PST Investicijos UAB	Member of the Board		$\blacksquare$

Terms of office: November 2014 through November 2018

Clean record

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

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, $\frac{0}{0}$	VOTES, $\frac{6}{6}$
Dvarčionių keramika AB	Shareholder	356	-	$\blacksquare$
Panevėžio keliai AB	Member of the Board		-	-

Terms of office: November 2014 through November 2018

Clean record

COMPANY NAME	CAPACITY	NUMBER OF SHARES	CAPITAL, $\frac{6}{6}$	VOTES, %
Panevėžio keliai AB	Member of the Board
Panevėžio ryšių statyba UAB	Director	279,507	27	27
Linas AB	$\rightarrow$	33,634	0.14	0.14

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

Terms of office: April 2014 through November 2018

Clean record

Following the decision of the General Meeting of Shareholders of Panevėžio statybos trestas AB that had taken place on 30 April 2015, the share of profit was paid to the members of the Board. Such amount of the share of profit is 215,987 Euros.

Administration:

DALIUS GESEVIČIUS - Head of the Company Administration, Managing Director. Holds 25, 015 shares of the Company. University education (1984, Vilnius Civil Engineering Institute), construction engineer. No previous convictions.

DANGUOLĖ ŠIRVINSKIENĖ - Chief Accountant of the Company. Holds no shares of the Company. University education (1983, Lithuanian Agricultural Academy), qualification of accountant-economist. No previous convictions.

In the first half of 2015 neither the members of the Board nor the top managers of Panevėžio statybos trestas AB were granted loans, given guarantees and sureties, had any property transfers to them.

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 of the company;
• 2) to monitor the effectiveness of the company's internal control, risk management and

internal audit systems where applicable;

• 3) to monitor the audit process;
• 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. Auditor of IDG auditoriai UAB. Holds no shares of the Company.

14. Information disclosed in public

Since the beginning of the year 2015 up to the day of this report the Company has announced the following information in public through the system of OMX Client News Service:

Title of announcement	Category of announcement	Language	Date
Klaipeda County Police Headquarters	Other information	$Lt$ , $En$	4 Aug. 2015
Procurement of Hotel Panevėžys	Notification on material event	$Lt$ , $En$	23 July 2015
Panevėžio statybos trestas AB Will Reconstruct National M.K. Ciurlionis School of Art	Notification on material event	$Lt$ , $En$	10 June 2015
Panevėžio statybos trestas AB Will Build Storage Facilities at Vilnius Airport	Notification on material event	$Lt$ , $En$	2 June 2015
Unaudited Performance Results of Panevėžio statybos trestas AB and the Group for the First Quarter of 2015	Notification on material event	$Lt$ , $En$	29 May 2015
Panevėžio statybos trestas AB Will Build Packing Production Facilities in Vilnius	Notification on material event	$Lt$ , $En$	29 May 2015
Close Down of the Branch of Panevėžio statybos trestas AB in Kaliningrad	Notification on material event	$Lt$ , $En$	6 May 2015
Annual Information Approved by Annual General Shareholders Meeting of Panevėžio statybos trestas AB	Annual information	$Lt$ , $En$	30 April 2015
Resolutions of Annual General Meeting of Shareholders	Notification on material event	$Lt$ , $En$	30 April 2015
Draft Resolutions of Annual General Meeting of Shareholders	Notification on material event	$Lt$ , $En$	16 April 2015

Close down of the representative office of Panevėžio statybos trestas AB in Cherepovets	Notification on material event	$Lt$ , $En$	14 April 2015
Addition to Agenda of Annual General Meeting of Shareholders	Notification on material event	$Lt$ , $En$	8 April 2015
Resolutions of Annual General Meeting of Shareholders	Notification on material event	$Lt$ , $En$	8 April 2015
Resignation of the member of the Board of Panevėžio statybos trestas AB	Notification on material event	$Lt$ , $En$	1 April 2015
Convening of the Annual General Meeting of the Shareholders	Notification on material event	$Lt$ , $En$	27 Mar. 2015
Unaudited Performance Results of Panevėžio statybos trestas AB and the Group for 2014	Interim information	$Lt$ , $En$	27 Feb. 2015

All notifications of Panevezio 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.

15. Information on compliance with the Governance Code

The Company complies with the procedure of company management set forth by the Law on Companies of the Republic of Lithuania.

The Company partially complies with the Governance Code applicable to the companies that are on the list of the Vilnius Stock Exchange. During six months of 2015 there were no essential changes related to the company's notification on compliance with the Governance Code for the year 2014 applicable to the companies that are on the list of NASDAQ OMX VILNIUS Stock Exchange.

The annual report of the Company will include the more detailed explanation of how the Company complies with the recommendations of the Governance Code.

16. Unaudited financial statements

Separate statement of financial position

ASSETS	30 June 2015	31 Dec. 2014
Non-current assets	13,435,969	12,851,879
Intangible assets	20,742	33,993
Tangible non-current assets	5,266,945	4,670,874
Investment and amounts receivable in one year	7,916,719	7,922,910
Deferred tax assets	231,563	224,102
Current assets	49,493,608	48,846,950
Inventories	1,240,958	1,677,421
Advance payments	341,726	225,653
Amounts receivable	24,785,955	17,815,632
Other current assets	11,410,398	10,525,509
Cash and cash equivalents	11,714,571	18,602,735
TOTAL ASSETS	62,929,577	61,698,829

EQUITY AND LIABILITIES	30 June 2015	31 Dec. 2014
Equity	40,061,643	39,481,724
Share capital	4,741,500	4,735,287
Reserves	1,937,022	2,014,199
Retained profit (loss)	33,383,121	32,732,238
Translation reserve
Minority share
Amounts payable and liabilities	22,867,934	22,217,105
Amounts payable in one year and non- current liabilities	707,158	742,961
Loans and borrowings
Warranty provision	448,896	471,079
Deferred tax liabilities	258,262	271,882
Amounts payable in one year and current liabilities	22,160,776	21,474,144
Loans and borrowings
Trade payables	16,417,655	13,271,581
Prepayments received	1,925,808	3,827,411
Current tax payable	334,257	461,157
Other liabilities	3,483,056	3,913,995
TOTAL EQUITY AND LIABILITIES:	62,929,577	61,698,829

Consolidated statement of financial position

ASSETS	30 June 2015	31 Dec. 2014
Non-current assets	8,102,265	15,314,102
Intangible assets	93,288	118,587
Tangible non-current assets	6,432,152	7,070,648
Investment property	0	6,101,702
Other investment and amounts receivable in one year	149,369	152,620
Other intangible assets	1,427,456	1,870,545
Current assets	64,892,725	63,584,498
Inventories	13,525,442	16,069,779
Advance payments	1,673,959	2,400,466
Amounts receivable	28,098,771	22,932,492
Assets held for resale	7,938,488
Other assets	688,168	1,232,913
Cash and cash equivalents	12,967,897	20,948,848
TOTAL ASSETS:	72,994,990	78,898,600

EQUITY AND LIABILITIES	30 June 2015	31 Dec. 2014
Equity	35,681,942	35,232,923
Share capital	4,741,500	4,735,287
Reserves	2,412,181	2,495,738
Retained profit (loss)	26,194,596	25,569,113
Translation reserve	2,333,665	2,432,785
Minority share	1,525,288	982,296
Amounts payable and liabilities	35,787,760	42,683,381
Amounts payable in one year and non- current liabilities	1,122,288	4,041,023
Loans and borrowings
Provisions	59,878	2,430,941
Deferred tax liabilities	729,564	742,578
Grants and subsidies	314,561	775,953
Other payable amounts	18,285	23,027
Amounts payable in one year and current liabilities	34,665,472	38,642,358
Loans and borrowings
Trade payables	2,043,444	6,201,947
Prepayments received	20,428,156	15,874,970
Current tax payable	3,529,077	9,844,344
Liabilities held for resale	356,681	580,240
Other liabilities	3,152,018	o
TOTAL EQUITY AND LIABILITIES:	72,994,990	78,898,600

Separate statement of comprehensive income

ITEM	6 months of 2015	6 months of 2014	II quarter of 2015	II quarter of 2014
INCOME FROM SALE	41,144,436	28,961,778	22,272,567	17,319,095
COST OF SALES	36,653,925	26,253,110	19,324,082	15,871,010
GROSS PROFIT (LOSS)	4,490,511	2,708,668	2,948,485	1,448,085
OPERATING EXPENSES	3,214,492	1,568,688	2,020,514	804,838
Sales	95,362	57,355	47,381	29,825
General and administration	3,119,130	1,511,333	1,973,133	775,013
TYPICAL OPERATING PROFIT (LOSS)	1,276,019	1,139,980	927,971	643,247
OTHER ACTIVITIES	32,316	108,956	17,918	126,116
Income	139,984	246,145	69,898	177,628
Expenses	107,668	137,189	51,980	51,512
FINANCIAL AND INVESTMENT ACTIVITIES	657,647	355,923	434,772	563,261
Income	686,797	456,667	445,441	366,595
Expenses	29,150	100,744	10,669	$-196,666$
USUAL ACTIVITY PROFIT (LOSS)	1,965,982	1,604,859	1,380,661	1,332,624
WINDFALL PROFIT
LOSSES
PROFIT (LOSS) BEFORE TAXATION	1,965,982	1,604,859	1,380,661	1,332,624
INCOME TAX	313,176	215,310	173,922	155,896
NET PROFIT (LOSS)	1,652,806	1,389,549	1,206,739	1,176,728

Consolidated statement of comprehensive income

ITEM	6 months of 2015	6 months of 2014	II quarter of 2015	II quarter of 2014
SALES	64,917,100	40,277,406	38,599,800	22,668,628
COST OF SALES	59,377,864	35,492,418	35,937,554	20,403,595
GROSS PROFIT (LOSS)	5,539,236	4,784,988	2,662,246	2,265,033
OPERATING EXPENSES	4,557,883	2,782,705	2,772,191	1,417,331
Sales	268,769	221,643	131,006	98,294
General and administration	4,289,114	2,561,062	2,641,185	1,319,037
TYPICAL OPERATING PROFIT (LOSS)	981,353	2,002,283	$-109,945$	847,702
OTHER ACTIVITIES	$-61,819$	205,463	$-24,410$	121,201
Income	106,447	354,389	53,574	89,927
Expenses	168,266	148,926	77,984	$-31,274$
FINANCIAL AND INVESTMENT ACTIVITIES	1,941,642	-483,858	-478,972	925,689
Income from financial activities	2,970	0	$-1,376,482$	$\bf{0}$
Income from other financial activities	2,105,953	26,792	985,958	15,856
Other financial expenses	167,281	510,650	88,448	$-909,833$
USUAL ACTIVITY PROFIT (LOSS)	2,861,176	1,723,888	$-613,327$	1,894,592
WINDFALL PROFIT	0	$\bf{0}$	0	$\bf{0}$
LOSSES	0	$\bf{0}$	0	$\bf{0}$
PROFIT (LOSS) BEFORE TAXATION	2,861,176	1,723,888	$-613,327$	1,894,592
INCOME TAX	736,835	104,132	392,840	303,214
NET PROFIT (LOSS)	2,124,341	1,619,756	$-1,006,167$	1,591,378
ATTRIBUTABLE TO SHAREHOLDERS	1,619,959	1,594,786	$-794,777$	1,433,643
ATTRIBUTABLE TO MINORITY INTEREST	504,382	24,970	$-211,390$	157,735

Separate statement of changes in equity

39,481,724
1,652,806 6,213 $-3,257$ 38,405,045 40,061,643 1,389,549 $-1,079,100$ 39,791,337 Total 32,732,238
1,652,806 79,586 77,177 1,389,549 $-1,079,100$ 31,492,643 32,961,778 33,383,121 Retained profit 473,537 473,537 473,537 473,537 reserve Legal 1,463,485 1,620,735 1,540,662 $-77,177$ 1,703,578 $-82,843$ tangible asset revaluation Non-current reserve 6,213 4,741,500 4,735,287 4,735,287 4,735,287 Authorized capital Total other comprehensive income Total other comprehensive income Balance as of 31 December 2014 Balance as of 1 January 2014 Balance as of 30 June 2014 Balance as of 30 June 2015 Net profit (loss) for 2014 Net profit (loss) for 2015 Dividend In Euros

Consolidated statement of changes in equity

in Euros	Authorized capital	Revaluation reserve	reserve Legal	Influence of exchange change in rate	Accumulated profit	Losses per company parent share	Minority part	Total
Balance as of 1 January 2014	4,735,287	$\frac{8}{2}$ 2,141,6	598,468	284,789	27,052,814 $-1,042$	34,813,016 $-1,042$	1,260,310	36,073,326 $-1,042$
Net profit (loss) for 2014 Dividend		$-101,595$			1,696,382	1,594,787	24,970	1,619,757
Total other comprehensive income		$-3,257$	72,695	30,656	$-72,695$	27,399	14,373	41,772
Balance as of 30 June 2014	4,735,287	2,036,806	671,163	315,445	28,675,459	36,434,160	1,299,653	37,733,813
Balance as of 31 December 2014	4,735,287	1,897,270	598,468	2,432,785	$-1,079,100$ 25,569,113	$-1,079,100$ 35,232,923	982,296 -694	36,215,219 $-1,079,794$
Net profit (loss) for 2015 Dividends					1,619,959	1,619,959	504,382	2,124,341
Total other comprehensive income	6,213	557 -83,5		-99,120	84,624	$-91,840$	39,304	$-52,536$
Balance as of 30 June 2015	4,741,500	1,813,713	598,468	2,333,665	26,194,596	35,681,942	1,525,288	37,207,230

24

Separate statement of cash flows

In Euros

	6 months of 2015	6 months of 2014
Cash flows from operating activities
Net profit (loss)	1,652,806	1,389,549
Depreciation and amortization costs	438,348	392,072
Profit (loss) from transfer of non-current assets	5,384	$-8,477$
Income tax expenses	313,176	215,310
	2,409,714	1,988,454
Change in inventories	436,463	$-420,676$
Change in amounts receivable	$-6,970,323$	$-6,210,338$
Change in prepayments	$-116,073$	$-33,816$
Change in amounts receivable after one year	3,295	2,693
Change in other assets	$-38,429$	$-296,090$
Change in trade payables	3,146,074	4,551,032
Change in prepayments received	$-1,901,603$	-3,897,829
Change in provisions and other liabilities	$-1,430,793$	263,049
	$-4,461,675$	$-4,053,521$
Income tax paid	$-465,013$	$-130,651$
Net cash flows from operating activities	$-4,926,688$	$-4,184,172$
Cash flows from investing activities
Acquisition of non-current assets (excl.
investments)	$-1,061,282$	$-468,810$
Transfer of non-current assets (excl. investments)	34,730	41,222
Acquisition of investments	$\Omega$	$-6,432$
Loans issued	$-1,721,657$	$-5,350,019$
Loans recovered	970,450	2,904,769
Dividends and interest received	902,876	275,092
Net cash flows from investing activities	$-874,883$	$-2,604,178$
Cash flows from financial activities
Dividends, share of profit paid	$-1,061,202$	$-1,941$
Proceeds from loans and borrowings	0	3,146
Repayments from loans and borrowings	0	$-3,146$
Interest paid	$-25,391$	$-16,557$
Net cash flows from financing activities	$-1,086,593$	$-18,498$
Increase (decrease) in net cash flows Cash and its equivalent at the beginning of the	$-6,888,164$	$-6,806,848$
period	18,602,735	13,957,491
Cash and its equivalents at the end of the period	11,714,571	7,150,643

Consolidated statement of cash flows

	6 months of 2015	6 months of 2014
Cash flows from operating activities
Net profit (loss)	2,124,341	1,619,756
Elimination of other non-monetary items
Depreciation and amortization costs	577,157	521,935
Other non-monetary items	$-27,262$	$-331,362$
	2,674,236	1,810,329
Change in inventories	4,369	$-2,531,604$
Change in amounts receivable	$-5,166,364$	$-6,976,712$
Change in prepayments	726,507	$-50,620$
Change in other assets	$-111,483$	$-1,237,488$
Change in trade payables	4,553,186	4,919,651
Change in prepayments received	$-6,315,267$	$-2,507,712$
Change in provisions and other liabilities	$-622,877$	$-1,088,290$
	$-4,257,693$	$-7,662,446$
Elimination of results from financial and investing
activities	$-1,300,396$	234,935
Net cash flows from operating activities	$-5,558,089$	$-7,427,511$
Cash flows from investing activities
Acquisition of non-current assets (excl.
investments)	$-1,146,971$	$-583,153$
Acquisition of non-current investments	0	$-6,432$
Transfer of non-current assets (excl. investments)	52,599	232,296
Loans issued	0	0
Loans recovered	764	654
Dividends and interest received	7,425	24,134
Net cash flows from investing activities	$-1,086,183$	$-332,501$
Cash flows from financial activities
Dividends and share of profit paid	$-1,061,896$	$-2,983$
Proceeds from loans and borrowings	0	522,032
Repayments from loans and borrowings	$-126,361$	-509,028
Payment of finance lease liabilities	$-20,158$	$-117,619$
Interest paid	$-128,264$	$-228,022$
Net cash flows from financing activities	$-1,336,679$	$-335,620$
Increase (decrease) in net cash flows	$-7,980,951$	$-8,095,632$
Cash and cash equivalent in the beginning of the	20,948,848	16,997,740
period
Cash and cash equivalent at the end of the neriod	12,967,897	8,902,108

EXPLANATORY NOTE

General Information

Panevėžio statybos trestas AB (hereinafter "the Company") was established in 1957 and for a long tome was known as the North Lithuania Construction Trust (Šiaurės Lietuvos statybos trestas). In 1991 the Company was registered as a State Capital Company. On 30 October 1993 the State Capital Company was reorganized to a Public Limited Liability Company. Company code 147732969, VAT code LT477329610. Registration certificate No. 013732 issued on 27 September 2004 by the State Register Centre Panevėžys Branch.

The Company comprises the following branches: Gerbusta, Pastatų apdaila, Genranga, Konstrukcija, Betonas, Stogas and Klaipstata. The Company has its permanent establishments in Latvia and the Kingdom of Sweden, Financial year of the Company is calendar year. The period of commercial-economic activities of the Company is unlimited.

The main operations of the Company and its subsidiaries (hereinafter "the Group") is designing and construction of various buildings, structures, facilities, communications and other similar objects in Lithuania and abroad, real estate development.

Basis of interim financial statement preparation

The figures in the interim financial statement are presented in Euros.

Separate and consolidated financial statements were prepared according to the International standard of Financial Accounting applicable in the European Union.

The same accounting principles were applicable to both - the interim financial statement and the annual financial statement.

The following currency rates (amount of currency for 1 Euro) were used when preparing the interim financial statement:

Currency	30 June 2015	31 Dec. 2014
1 RUB	61.6025	68.7111
1 SEK	9.2447	9.5260
1 PLN	4.1893	4.2916

Principles of consolidation

Subsidiary companies are the companies controlled by the parent company. Such control is defined as a capability to a company to have determinant effect on other company, manage and influence financial and economic activities to get benefit from that company. For the purposes of control assessment the total available number of shareholders' votes at the General Meeting of Shareholders is considered. The financial statements of subsidiary companies are included into the Consolidated Financial Statement from the day of control gain and are excluded from the day of control loss. During consolidation of financial statement the income and expenses, amounts receivable and payable and unrealized results of the Company Group are eliminated.

Segments

As the income, profit and assets of the company in the segments do not exceed 10 or more per cents of all operating segments, following the requirements of item 13 in the IFRS 8, only operating and geographical segments of the Group are provided.

Operating segments of the Group

I half of 2015	Construction	Real estate development	Total
Revenue	61,555,808	3,361,292	64,917,100
Cost of sales	-57,004,066	$-2,373,798$	-59,377,864
Gross profit	4,551,742	987,494	5,539,236
Other income	96,480	9,967	106,447
Operating expenses	$-4,340,270$	$-217,613$	$-4,557,883$
Other expenses	$-168,266$	$\bf{0}$	$-168,266$
Operating result	139,686	779,848	919,534
Finance and investment income	368,730	1,740,193	2,108,923
Finance and investment costs	$-24,416$	$-142,865$	$-167,281$
Income tax income (expenses)	$-366,627$	$-370,208$	$-736,835$
Net profit (loss)	117,373	2,006,968	2,124,341
Segment assets
Non-current assets	7,209,592	892,673	8,102,265
Inventories	3,898,765	9,626,677	13,525,442
Other current assets	43,818,037	7,549,246	51,367,283
Total segment assets	54,926,394	18,068,596	72,994,990
Segment liabilities
Financial liabilities	80,063	2,023,259	2,103,322
Trade accounts payable	20,406,045	22,111	20,428,156
Other payables	9,886,493	3,369,789	13,256,282
Total segment liabilities	30.372.601	5.415.159	35,787,760

I half of 2014	Construction	Real estate development	Total
Revenue	39,801,829	475,577	40,277,406
Cost of sales	$-35,317,595$	$-174,823$	$-35,492,418$
Gross profit	4,484,234	300,754	4,784,988
Other income	316,218	38,171	354,389
Operating expenses	$-2,525,667$	$-257,038$	$-2,782,705$
Other expenses	$-143,935$	$-4,991$	$-148,926$
Operating result	2,130,850	76,896	2,207,746
Finance and investment income	21,228	5,564	26,792
Finance and investment costs	$-285,243$	$-225,407$	$-510,650$
Income tax income (expenses)	$-304,744$	200,612	$-104, 132$
Net profit (loss)	1,562,091	57,665	1,619,756
Segment assets
Non-current assets	6,284,207	7,892,361	14,176,568
Inventories	3,342,244	12,627,407	15,969,651
Other current assets	39,037,591	1,162,707	40,200,298
Total segment assets	48,664,042	21,682,475	70,346,517
Segment liabilities
Financial liabilities	21,451	8,311,134	8,332,585
Trade accounts payable	13,630,175	71,672	13,701,847
Other payables	8,780,731	1,797,541	10,578,272
Total segment liabilities	22,432,357	10,180,347	32,612,704

Geographical information of the Group

I half of 2015	Lithuania	Russia	Total
Revenue	45,848,607	19,068,493	64,917,100
Cost of sales	$-40,261,097$	$-19,116,767$	-59,377,864
Gross profit	5,587,510	$-48,274$	5,539,236
Other income	94,054	12,393	106,447
Operating expenses	$-4,033,883$	$-524,000$	$-4,557,883$
Other expenses	$-163,453$	$-4,813$	$-168,266$
Operating result	1,484,228	$-564,694$	919,534
Finance and investment income	1,407,842	701,081	2,108,923
Finance and investment costs	$-81,528$	$-85,753$	$-167,281$
Income tax income (expenses)	$-366,231$	$-370,604$	$-736,835$
Net profit (loss)	2,444,311	$-319,970$	2,124,341
Segment assets
Non-current assets	6,871,511	1,230,754	8,102,265
Inventories	7,197,131	6,328,311	13,525,442
Other current assets	47,331,753	4,035,530	51,367,283
Total segment assets	61,400,395	11,594,595	72,994,990
Segment liabilities
Financial liabilities	1,823,912	279,410	2,103,322
Trade accounts payable	17,303,361	3,124,795	20,428,156
Other payables	11,138,344	2,117,938	13,256,282
Total segment liabilities	30,265,617	5,522,143	35,787,760

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
----------------------------------------	--	--	--	--	--	--

I half of 2014	Lithuania	Russia	Total
Revenue	32,686,824	7,590,582	40,277,406
Cost of sales	$-27,381,469$	$-8,110,949$	$-35,492,418$
Gross profit	5,305,355	$-520,367$	4,784,988
Other income	343,800	10,589	354,389
Operating expenses	$-2,283,432$	$-499,273$	$-2,782,705$
Other expenses	$-134,898$	$-14,028$	$-148,926$
Operating result	3,230,825	$-1,023,079$	2,207,746
Finance and investment income	22,814	3,978	26,792
Finance and investment costs	$-172,656$	$-337,994$	$-510,650$
Income tax income (expenses)	$-190,539$	86,407	$-104, 132$
Net profit (loss)	2,890,444	$-1,270,688$	1,619,756
Segment assets
Non-current assets	13,330,191	846,377	14,176,568
Inventories	8,879,443	7,090,208	15,969,651
Other current assets	31,572,363	8,627,935	40,200,298
Total segment assets	53,781,997	16,564,520	70,346,517
Segment liabilities	8,100,308	232,277	8,332,585
Financial liabilities	10,267,345	3,434,502	13,701,847
Trade accounts payable	8,579,882	1,998,390	10,578,272
Other payables Total segment liabilities	26,947,535	5,665,169	32,612,704

Investment

During the first half 2015 the investments of the Group in acquisition of non-current assets amounted to 1,146,971 Euros. Panevėžio statybos trestas AB acquired non-current assets for 1,061,282 Euros. During the first half of year 2015 the costs related to depreciation and amortization of assets of the Group amounted to 577,157 Euros, including 438,348 Euros accounted for in the Financial Statement of Panevėžio statybos trestas AB.

Assets

As sales of Verkių projektas UAB, the subsidiary company of PST investicijos UAB, is in progress this year, following IFRS 5.38 requirements the assets and liabilities of Verkių projektas UAB are accounted for in the consolidated balance as current assets and liabilities for resale including the loan in the amount of 2,497,422 Euros provided by DNB bankas AB.

Loans

As of 30 June 2015, the Group had loans amounting to 2,101,926 Euros, including 1,743,849 Euros as long-term and short-term credits of PST investicijos UAB Group. Decrease in the amount loans was conditioned by elimination of the loan in the amount of 3,917,612 Euros provided by SEB bankas AB after bankruptcy proceedings have been initiated for Kauno erdve UAB and Sakališkės UAB, the subsidiary companies of PST investicijos UAB.

Guarantees, sureties

As of 30 June 2015, the guarantees of the liabilities of Panevėžio statybos trestas AB Group issued by credit institutions amounted to 5,483,868 Euros, including 3,695,280 Euros for performance guarantees issued by the credit institutions of the Russian Federation for Baltlitstroj OOO. On 19 may 2015 the surety agreement was signed for the period of one year with the Polish material supply company for the liabilities of the subsidiary company Kingsbud Sp.z.o.o. in the amount of 300,000 PLN.

Transactions with associated parties

There were no significant transactions made with any associated parties.

Dividends

The Annual General Meeting of the Shareholders of Panevežio statybos trestas AB that took place on 30 April 2015 took the decision to pay dividends for the year 2014 in the amount of 1,079,100 Euros. As of 30 June 2015, the dividends in the amount of 1,061,202 Euros have been paid, which makes 98.3 % of the amount payable.