AB Panevėžio Statybos Trestas
Separate Financial Statements for the year 2021
prepared in accordance with International Finan-
cial Reporting Standards as adopted in the Euro-
pean Union, presented together with Independ-
ent Auditor’s Report and Annual Report
1
AB „Panevėžio statybos trestas“
Separate Financial Statements
2
AB „Panevėžio statybos trestas“
Separate Financial Statements
Information about the Company
AB Panevėžio Statybos Trestas
Company code: 147732969
Phone: +370 45 505 503
Fax: +370 45 505 520
Address: P. Puzino st. 1, LT-35173 Panevėžys
Board
Justas Jasiūnas, Chairman
Gvidas Drobužas
Kristina Mačiulienė
Lina Simaškienė
Vaidas Grincevičius
Management
Egidijus Urbonas, Managing Director
Auditor
Grant Thornton Baltic UAB
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Swedbank AB
AB Šiaulių bank
OP Corporate Bank plc Lithuania
Grant Thornton Baltic UAB
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Grant Thornton International Ltd narys
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of AB PANEVĖŽIO STATYBOS TRESTAS
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of AB PANEVĖŽIO STATYBOS TRESTAS
(hereinafter the ‘Company’), which comprise the statement of financial position as of 31 December 2021,
the statements of comprehensive income, cash flows and changes in equity for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying Company’s financial statements present fairly, in all material respects,
the financial position of the Company as at 31 December 2021 and its financial performance and its
cash flows for the year then ended in accordance with International Financial Reporting Standards as
adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the ‘Auditor’s Responsibilities for the
Audit of the Financial Statements’ section of our report. We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code) together with the requirements of the Law on Audit of the
financial statements of the Republic of Lithuania that are relevant to the audit in the Republic of
Lithuania, and we have fulfilled our other ethical responsibilities in accordance with the Law on Audit of
the financial statements of the Republic of Lithuania and the IESBA Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. Below is the description of each key audit matter and our
response to it.
We have fulfilled the responsibilities described in the ‘Auditor’s Responsibilities for the Audit of the
Financial Statements’ section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial statements. The results of our audit procedures, including the procedures
performed to address the matter below, provide the basis for our audit opinion on the accompanying
financial statements.
1. Key audit matter – Fine imposed by the Competition Council
s disclosed in Note 27 of the financial statements, on 3 June 2020 the Supreme Administrative Court of
Lithuania announced a non-appealable ruling on the dispute of the parent of the Group against the
decision of the Competition Council and as a consequence, the Group has recognized in the financial
statements for the year ended 31 December 2020 the fine amounting to EUR 8.5 million EUR and
related interest charge amounting to EUR 1.4 million. The Group is discussing with the State Tax
Inspectorate the interest and execution costs. They are seeking for payment period extension
This matter was significant for our audit because the payment of the fine and interest charge significantly
affect the Cash Flow of the Group.
How the Matter Was Addressed in the Audit
Our audit procedures, among others, included the following:
- Reading the ruling issued by the Supreme Administrative Court.
- The Group is discussing with the State Tax Inspectorate the interest and execution costs.
They are seeking for payment period extension.
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- Analysis of responses in the external legal advisor‘s letter to our inquiries.
- Consideration of the outcome of the respective prior year management’s estimate, including
assessment of potential management bias.
Furthermore, we have considered the adequacy of the disclosures in Note 27 of the financial statements
on this matter.
2. Key audit matter – Revenue recognition for constructions contracts in progress
Revenue recognition for constructions contracts in progress
The Company‘s main revenue stream comes from large long-term construction contracts. As disclosed
in Notes 2, 3, 14 and 19, the Company recognizes revenue from the customer specific construction
contracts in progress as of the year-end based on the estimated stage of completion of the projects,
which is assessed by reference to the proportion of total costs incurred through the reporting date
compared to total costs of the contract estimated by management.
This matter was significant to our audit because recognition of revenue for the reporting year is highly
dependent on the judgment exercised by the management in assessing the completeness and accuracy
of forecast costs to complete the construction contract and changes in these judgments and related
estimates throughout a contract life can result in material adjustments to revenue and margin recognised
on contracts, which can be either positive or negative.
How the Matter Was Addressed in the Audit
Furthermore, we have considered the adequacy of the disclosures in Note 28 of the financial statements
on this matter.
Our audit procedures, among others, included the following:
- Updating our understanding of the Company’s revenue recognition process, including the model
used for the revenue recognition in relation to the contracts in progress, and controls in relation
to long-term construction contracts. We also assessed how the management makes the
accounting estimate (determines the stage of completion of the projects) and the accuracy,
completeness and relevance of the data on which it is based as further described below.
- Testing the Company’s key controls over allocation of revenues and costs to a specific contract.
- Consideration of the accuracy of management’s forecasts for potential management bias by
comparing the historical financial performance of selected contracts completed in 2021 with the
total cost estimates and forecasted margins for those contracts used for revenue recognition as
of 31 December 2020.
- Considering whether all material loss making contracts were properly identified and accounted
for;
- Selecting a sample of contracts with the greatest potential impact on the Company’s financial
statements for the year ended 31 December 2021, considering both quantitative and qualitative
criteria, such as significant margin changes, loss-making contracts or projects which are unique
in their nature, for additional testing as outlined below.
For the sample of contracts selected, we have considered the adequacy of the management’s estimate
on the amount of revenue to be recognized in the financial statements by performing the following
procedures, among others:
- comparing the contracts signed with customers against the total contract value estimates
included in the management’s calculations;
- considering the management’s estimated costs required to complete the contracts by reference
to our understanding of the contract scope and the management’s contracts’ cost budgets and
our inquiries of contract managers;
- tracing costs incurred up to date as per management’s estimation of the stage of completion to
the costs included in the statement of comprehensive income, considering also whether they
are reflective of the actual progress of the work and are eligible items;
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- considering the reasonableness of the margins recognised by the Company for the projects in
progress taking into account our understanding of the contract scope and the historical
performance of the Company;
- and tracing actual contract revenues accounted for in the statement of comprehensive income
to the estimation of the management of the amounts of revenue to be recognized for the
contracts in progress based on the assessment of their stage of completion.
Finally, we considered the adequacy of the disclosures about the matter in Notes 2 and 19 of the
financial statements.
3. Key audit matter – Impairment assessment of investments into subsidiaries and
receivables from subsidiaries
As disclosed in Notes 16, 17 and 29 in the financial statements, the carrying value of the Company’s
investments into subsidiaries amounts to EUR 5.98 million and the total balance of receivables from
these subsidiari7.722.2 million as at 31 December 2021 (EUR 5.92 million and EUR 29.4 million,
respectively, as at 31 December 2020). The management’s assessment of the recoverable amount of
investments into subsidiaries and impairment losses on receivables from them, including loans granted
and accrued interest, requires estimation and judgement around the assumptions used, including the
recoverable value of real estate projects under development by subsidiaries as disclosed in Notes 2 and
16. Changes to these assumptions could lead to material changes in the estimated recoverable amount
of investments and impairment losses on loans and receivables.
This matter was important to our audit due to significance of the amounts involved and high degree of
related management estimation.
We, among other audit procedures, have obtained an understanding (including understanding of the
assumptions and methods), applied by the management in impairment test of investments in
subsidiaries and receivables from subsidiaries. We considered the completeness of the potential
impairment indicators identified by the management by comparing the carrying value of the Company’s
investments into each subsidiary with the Company’s share in the net assets of the subsidiary at their
book value and discussing with the management their performance and their outlook.
We also considered the assumptions and methodologies used by the management to determine the
recoverable amounts of the investments in subsidiaries and estimated credit losses (ECL) of accounts
receivable and loans granted.
We also considered the subsidiaries’ ability to repay the amounts due to the Company by examining
their liquidity position based on their financial statements as well as their future cash flow forecasts.
Finally, we considered the adequacy of the Company’s disclosures included in Notes 2, 16 and 17 about
the significant assumptions used in the estimation of recoverable values and the results of the
impairment assessment.
4. Assessment of impairment of trade receivables and contract assets
As at 31 December 2021, the Company had non-current and current trade accounts receivable and
contract assets balance amounting to EUR 0.03 million and EUR 14.83 million respectively, reported in
the statement of financial position as disclosed in Notes 4 and 19 of the financial statements.
The estimation of the expected credit losses (ECL) as required by IFRS 9 Financial instruments involves
significant management judgement. As disclosed in Note 2, specific factors management considers
include analysis of the historical credit losses, consideration of economic developments and other
subjective risk factors related to the specific debtor or debtors’ group.
This matter is significant to our audit due to materiality of the amounts as these receivables constitute
over 30% of the total assets of the Company in the statement of financial position as at 31 December
2021 and high level of management judgement involved in the assessment of their impairment.
How the Matter Was Addressed in the Audit
Our audit procedures, among others, included the following:
- We gained an understanding of the management’s process of estimation of impairment of
trade receivables and contract assets. This included the consideration whether the model used
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to develop the estimate is appropriate and assessment whether the impairment accounting
policy applied by the Company is in line with the requirements of IFRS 9 Financial instruments.
We also assessed how the management made the accounting estimate and the accuracy, completeness
and relevance of the data on which it is based as follows:
- For receivables and contract assets assessed by the management for impairment individually,
we have discussed with the management selected individual balances, including
management’s analysis of expected recoverability of these balances, and also considered
independently the indications of potential understatement of ECL by assessing the ageing of
the receivables and amounts collected after the date of the statement of financial position.
- For receivables assessed by the management using the expected credit loss rate matrix, we
have assessed the key estimates made by the management in developing the ECL matrix,
including historical default rate information and forward-looking information as of 31 December
2021. We tested the correctness of aging of the receivables by agreeing the date to the
invoices issued for selected items and verified the arithmetical accuracy of the management’s
calculation of impairment.
Furthermore, we have assessed the adequacy of the disclosure in the financial statements on this matter
(Notes 2, 4 and 19).
Other matters
The financial statements of the Company for the year ended 31 December 2020, were audited by
another auditor expressed an unmodified opinion on the Company’s financial statements on 2 April
2021.
Other information
Other information consists of the information included in the Company’s Annual Report, including the
Corporate Governance Report, the Remuneration Report and the Corporate Social Responsibility
Report, other than the financial statements and our auditor’s report thereon. Management is responsible
for the other information presentation.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon, except as indicated below.
In connection to our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
In addition, our responsibility is to consider whether information included in the Company’s Annual
Report, including Corporate Governance Statement and Remuneration Report, for the financial year for
which the financial statements are prepared is consistent with the financial statements and whether the
Company’s Annual Report, including Corporate Governance Statement and Remuneration Report, has
been prepared in compliance with applicable legal requirements. Based on the work carried out in the
course of audit of financial statements, in our opinion, in all material respects:
• The information given in the Company’s annual report, including Corporate Governance
Statement and Remuneration Report, for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• The Company’s annual report, including Corporate Governance Statement and Remuneration
Report, has been prepared in accordance with the requirements of the Law of the Republic of
Lithuania on Financial Reporting by Undertakings.
It is also our responsibility check whether the Corporate Social Responsibility Report has been provided.
If we identify that the Corporate Social Responsibility Report has not been provided, we are required to
report that fact. We have nothing to report in this regard.
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Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the 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.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
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From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the decision made by the General Meeting of Shareholders on 29 July 2021, we
have been chosen to carry out the audit of the Company’s financial statements for the first time. Our
appointment to carry out the audit of the Company’s financial statements in accordance with the decision
made by the General Meeting of Shareholders is renewed every two years and the period of total
uninterrupted engagement is one year.
We confirm that our opinion in the section ‘Opinion’ is consistent with the additional Audit report which
we have submitted to the Company and its Audit Committee.
We confirm that to the best of our knowledge and belief, services provided to the Company are
consistent with the requirements of the law and regulations and do not comprise non-audit services
referred to in Article 5(1) of the Regulation (EU) No 537/2014 of the European Parliament and of the
Council.
Throughout our audit engagement period we have not provided any other services except for the audit
of the Company's separate and Group consolidated financial statements and also translation services
of the aforementioned financial statements.
Report on the Compliance of the Format of Financial Statements with the Requirements of the
European Single Electronic Format
The single electronic reporting format of the Company’s financial statements has been applied by the
Company to comply with the requirements of Article 3 of the Commission Delegated Regulation (EU)
2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and
of the Council with regard to regulatory technical standards on the specification of a single electronic
reporting format (hereinafter the “ESEF Regulation”). Pursuant to these requirements, the Company’s
financial statements must be prepared in XHTML format. We confirm that the single electronic reporting
format of the financial statements for the year ended 31 December 2021 complies, in all material
aspects, with the ESEF Regulation.
The partner in charge of the audit resulting in this independent auditor’s report is Arvydas Ziziliauskas.
Arvydas Ziziliauskas
1
Lithuanian Certified Auditor
License No 000467
4 April 2022
Jonavos st. 60C, Kaunas
Grant Thornton Baltic UAB
Audit company’s licence No 001513
1
Auditor‘s report was electronically signed on April 4th 2022
9
Confirmation of the Company’s Responsible Persons
This confirmation of responsible employees concerning the audited separate financial statements
and the annual report of AB Panevėžio Statybos Trestas for the year 2021 is presented in accord-
ance with the Law on Securities of the Republic of Lithuania and the Rules for Preparation and
Presentation of Periodic and Additional Information approved by Resolution of the Board of the
Bank of Lithuania.
Hereby I 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 financial position, profit or loss and cash
flows of AB Panevėžio Statybos Trestas, and that the annual report fairly states the review of
business development and activities, the Company’s position and description of the main risks
and uncertainties that are faced.
AB Panevėžio Statybos Trestas AB Panevėžio Statybos Trestas
Managing Director Chief Accountant
Egidijus Urbonas Danguolė Širvinskienė
4 April 2022 4 April 2022
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
10
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Comprehensive Income
For the year ended December 31
EUR thousand
Note
2021
2020
Revenue from contracts with customers
5
65,721
59,712
Cost of sales
6
(59,888)
(58,531)
1,968
Gross profit
5,833
1,181
Other revenue
10
985
859
Selling expenses
7
(355)
(283)
Administrative expenses, total:
8
(6,067)
(13,493)
Fine imposed by the Competition Council
-
(8,514)
Impairment loss (reversal) on trade debts, contract assets
and other receivables
235
(120)
Other administrative expenses
(6,302)
(4,859)
Other expenses
10
(512)
(706)
Operating profit (loss)
(116)
(12,442)
Finance income, total
11
957
1,227
Interest income
555
725
Other finance income
402
502
Finance expense, total:
11
(339)
(1,681)
Interest expense
(256)
(1,658)
Other finance expense
(83)
(23)
Profit (loss) before tax
502
(12,896)
Income tax expenses (benefit)
12
(198)
478
Net profit (loss)
304
(12,418)
Other comprehensive income
Items that will never be transferred to profit/(loss)
-
-
Items that will be transferred to profit (loss)
-
-
Other comprehensive income, total
-
-
Total comprehensive income (loss)
304
(12,418)
Basic earnings (loss) per share (EUR)
31
0.02
(0.76)
Notes disclosed in pages 16–55 are an integral part of these financial statements.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
11
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Financial Position
As at 31 December
EUR thousand
Note
2021
2020
ASSETS
Non-current assets
Property, plant and equipment
13
3,438
4,333
Intangible Assets
14
184
204
Investment Property
15
3,396
3,213
Right of use assets
26
977
1,129
Investments in subsidiaries
16
5,977
5,919
Loans granted
17
5,799
12,731
Non-current trade receivables
4, 19
29
228
Other non-current financial assets
454
83
Deferred tax assets
12
249
447
Total non-current assets
20,503
28,287
Current assets
Inventories
18
4,559
2,775
Trade receivables
4, 19
11,749
10,791
Contract assets
4, 19
3,082
491
Prepayments
1,220
235
Loans granted
17
1,395
15,050
Other current assets
20
1,75
13
Prepaid income tax
-
-
Cash and cash equivalents
21
5,795
4,648
Total current assets
2,7975
34,003
TOTAL ASSETS
48,478
62,290
Notes disclosed in pages 16–55 are an integral part of these financial statements.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
12
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Financial Position (continued)
As at 31 December
EUR thousand
Note
2021
2020
EQUITY AND LIABILITIES
Equity
Issued capital
22
4,742
4,742
Reserves
22
1,612
1,745
Retained earnings
15,785
15,349
Total equity
22,139
21,836
Non-current liabilities
Warranty provisions
25
702
744
Deferred tax liability
12
-
-
Pension fund provision
25
80
57
Non-current lease liabilities
26
690
878
Total non-current liabilities
1,472
1,679
Current liabilities
Loans
23
-
15,000
Current lease liabilities
26
291
251
Trade payables
24
11,811
8,187
Contract liability
27
1,144
2,815
Provisions
19, 25, 27
148
319
Other liabilities
19, 27
11,473
12,203
Total current liabilities
24,867
38,775
Total liabilities
26,339
40,454
TOTAL EQUITY AND LIABILITIES
48,478
62,290
Notes disclosed in pages 16-55 are an integral part of these financial statements.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
13
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Changes In Equity
EUR thousand
Note
Issued capital
Legal reserve
Revaluation
reserve
Retained earnings
Total equity
Balance as at 31/12/2020
4,742
475
1,270
15,349
21,836
Total comprehensive income for the year
Net profit (loss)
-
-
-
304
304
Total other comprehensive income
-
-
-
304
304
Total comprehensive income
-
-
(133)
132
(1)
Depreciation transfer for buildings
Balance as at 31/12/2021
4,742
475
1,137
15,785
22,139
Balance as at 31/12/2019
4,742
475
1,403
28,125
34,745
Total comprehensive income for the year
Net profit (loss)
-
-
-
(12,418)
(12,418)
Total other comprehensive income
-
-
-
-
-
Total comprehensive income
(12,418)
(12,418)
Depreciation transfer for buildings
-
-
(133)
132
(1)
Contributions by and distributions to owners of the
Company
Dividends to the owners of the Company
31
-
-
-
(490)
(490)
Total contributions by and distributions to owners
of the Company
-
-
-
(490)
(490)
Balance as at 31/12/2020
4,742
475
1,270,
15,349
21,836
Notes disclosed in pages 16-55 are an integral part of these financial statements.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
14
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Cash Flows
For the year ended December 31
EUR’000
Note
2021
2020
Cash flows from operating activities
Net profit (loss)
304
(12,418)
Adjustments to:
Depreciation and amortisation
13, 14
848
1,233
Result from disposal of property, plant and equipment
(84)
(39)
Income tax expenses (benefit)
12
198
(478)
Financing activities
11
(309)
1,144
Fine imposed by the Competition Council and enforcement fees
27
-
8,423
Other non-cash items
20
53
Net cash flows from ordinary activities before changes in
working capital
977
(2,082)
Changes in working capital
Changes in non-current receivables
(2,080)
(17)
Changes in inventories
18
(1,776)
1,192
Changes in trade receivables and contract assets
19
(3,378)
17,057
Changes in prepayments
(985)
77
Changes in other assets
(162)
175
Changes in trade payables
24
3,624
(10,336)
Change in contract liabilities (prepayments received)
19
(614)
526
Changes in other liabilities
(1,670)
(376)
Income tax paid
-
-
Net cash flows from operating activities
(6,064)
6,216
Cash flows used in investing activities
Acquisition of intangible assets and property, plant and equip-
ment
13, 14
(323)
(638)
Disposal of property, plant and equipment
292
210
Acquisition of subsidiary
16
-
(147)
Loans granted
28
(775)
(8,822)
Collection of loans granted
22,859
45
Dividends received
11
723
513
Net cash flows used in investing activities
22,776
(8,839)
Cash flows from/used in financing activities
Dividends paid*
-
(488)
Loans received
4, 23
-
3,200
Repayment of borrowings
4, 23
(15,000)
-
Lease obligations
26
(3,09)
(58)
Interest paid
4
(256)
(273)
Net cash flows from/used in financing activities
(15,565)
2,381
Net increase/(decrease) in cash and cash equivalents
1,147
(242)
Effect of foreign exchange on cash
-
-
Cash and cash equivalents as at January 1
21
4,648
4,890
Cash and cash equivalents as at December 31
21
5,795
4,648
* There was no dividend payment in 2021. In 2020, the Company’s General Meeting of Shareholders made a decision to pay
EUR 490 thousand of dividends. During 2020, the Company paid out 99.4% of dividends. As at 31 December 2021, total
balance of dividends payable was EUR 29 thousand (as at 31 December 2020, EUR 29 thousand).
Notes disclosed in pages 16–55 are an integral part of these financial statements.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
15
AB „Panevėžio statybos trestas“
Separate Financial Statements
Notes to the Financial Statements
1 General information
AB Panevėžio Statybos Trestas (hereinafter the “Company”) was established in 1957. The company code
is 147732969, registered address is P. Puzino st. 1, LT-35173 Panevėžys, the Republic of Lithuania. As
from 13 July 2006, the Company’s ordinary shares are listed on the Official trading list of the Vilnius
Stock Exchange (VSE). The main activities of the Company are construction of buildings, structures,
plant and communication facilities in Lithuania and abroad. As at 31 December 2021, the Company had
560 employees (31 December 2020: 593 employees).
The Company has the following branches in Lithuania: Genranga, Gerbusta, Pastatų Apdaila, Klaipstata,
and Konstrukcija. The Company also has permanent establishments in the Republic of Latvia and in the
Kingdom of Sweden.
As at 31 December 2021 and 2020, the principal shareholders of the Company were as follows:
• AB Panevėžio Keliai, S. Kerbedžio st. 7, Panevėžys, company code 147710353, (49.78%) (ultimate
controlling shareholder);
• Clairmont Holdings LTD, Grigori Afxentiou, 27 P.O.6021, CY (5.73%);
• The freely traded shares, owned by natural and legal persons (44.49 %). No one owns more than 5%.
These financial statements are the Company’s separate financial statements. The Company is also pre-
paring the Company and its subsidiaries’ consolidated financial statements. Set of consolidated financial
statements is kept at the Company’s registered office at P. Puzino st. 1, LT-35173 Panevėžys, the Repub-
lic of Lithuania, and published on website www.pst.lt. The information about the subsidiaries’ activities
is presented in Note 16.
The shareholders of the Company have a statutory right to either approve these financial statements or
not approve them and require a new set of financial statements to be prepared. The Company’s manage-
ment authorised these financial statements on 4 April 2022.
2 Basis of Preparation
Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (hereinafter “IFRS”).
Basis of preparation of the financial statements
The financial statements have been prepared on the historical cost basis except for land and buildings
measured using the revaluation model and investment property measured at fair value.
Functional and presentation currency
The financial statements are presented in euro, the national currency of the Republic of Lithuania, which
is the Company’s functional currency.
Due to rounding of certain amounts to thousand, figures in the tables may differ. Such rounding bias is
immaterial in these financial statements.
Judgements and estimates
The preparation of the financial statements in conformity with IFRSs requires management to make
judgements and estimates 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 recog-
nised in the period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty in applying accounting policies that have a
significant effect on the amounts recognised in the financial statements and have a significant risk of
causing material adjustments to the financial statements in the next financial year is included in the fol-
lowing notes:
16
AB „Panevėžio statybos trestas“
Separate Financial Statements
2 Basis of Preparation (continued)
• Note 12: deferred tax recognition. Deferred tax asset is recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences could be utilised.
• Note 13: fair value of land and buildings which are measured using the revaluation model, useful
lives of property, plant and equipment and intangible assets. The Company assesses the useful lives
of property, plant and equipment and intangible assets at least once a year (Note 3.3). Revaluations
are carried out regularly ensuring that the carrying amount of land and buildings do not significantly
differ from their fair values as at reporting date: when preparing these financial statements the man-
agement has assessed that no periodic revaluation is needed for the property, plant and equipment
carried at revalued amount as at 31 December 2021 there are no internal or external indication of
material change in the fair values accounted for during the last revaluation performed and accounted
for in the financial statements in 2018.
• Note 16: measurement of recoverable amounts of investments in subsidiaries. A key factor in esti-
mating the recoverable amounts of the investment in subsidiaries is the recoverability of ongoing
construction projects and other assets of subsidiaries. Therefore, the Company engaged external
appraisers to estimate the fair values of these projects based on discounted cash flow or comparable
price technique, the Company also relied on the Purchase and Sale Agreement signed with a third
party after the reporting date and related information.
• Notes 19 and 26: impairment of trade receivables and estimation of revenue from contracts with
customers and contract assets as well as contract liabilities based on the stage of completion of the
construction contracts. The accuracy of the recognition of revenue on contracts in progress is highly
dependent on the judgement exercised by management in assessing the completeness and accuracy
of planned costs (budget) as it is the key assumption in the assessment of revenue, contract assets
and contract liabilities based on the stage of completion of the contracts in progress. Estimating the
recoverable amounts of receivables is a process, which requires significant management judgement
and estimates, particularly those that are related to expected credit losses assessment based on the
analysis of the historical credit losses, considerations of future factors and other subjective risk
factors related to the specific debtor or debtors’ group. Estimates were applied in assessing the
amounts to be collected and their timing.
• Note 17: loans granted are classified as long-term or short-term. Additionally, the impairment test-
ing requires the management to make an assessment of the significance of increase in credit risk
since initial recognition, which is performed by the management considering the liquidity situation
of subsidiaries taking into account their financial statements and cash flows forecasts.
• Note 25: the Company estimates warranty provision on a monthly basis having regard to monthly
revenue. Warranty provision is being estimated by taking into account revenue, actual warranty
expenses incurred in previous periods, its proportion against actual sales, statutory term of warranty
and historical information.
• Note 28: the management uses judgement while assessing the possible outcome of the legal dis-
putes. Provisions are not recognised in the financial statements as based on the management judge-
ment it is more likely than not, that the Company will win the legal disputes mentioned in the Note
28, or it is not possible to assess reliably the possible outcome of the contingency at the moment.
• Impact of COVID-19:
In 2021, the construction industry was still one of the industries most affected by the pandemic. AB
Panevėžio Statybos Trestas sought solutions and options for the problems, operational challenges and
risks that emerged during COVID-19 pandemic, was able to adapt to the dramatic changes in the operat-
ing environment and behaviour of market participants. The Company tried to maintain a moderate pace
of activities rather than delaying decisions to calmer post-quarantine times. Management monitors and
evaluates the current situation responsibly (especially with regard to customer billing, shortages of sup-
plies, execution of orders), responds promptly and makes appropriate decisions to safeguard the going
concern.
17
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies
Application of new and/or changed IFRS and interpretations issued by International Accounting
Standards Board (IASB)
During the reporting period, the Company adopted new standards and amendments to existing standards
and their interpretations, which are relevant to the activities and effective for annual periods beginning
on or after 1 January 2021.
(a) Standards, their amendments and interpretations effective for annual periods beginning on or after
1 January 2021.
Amendments to IFRS 16 – Covid-19-Related Rent Concessions beyond 30 June 2021 adopted by
the EU on 30 June 2021(issued on 31 March 2021 with effective date of 1 April 2021)
These amendments extend the scope of the 2020 amendments by increasing the eligibility period for the
application of practical expedient from 30 June 2021 to 30 June 2022.
On 28 May 2020, the International Accounting Standards Board (IASB) issued COVID-19-Related Rent
Concessions, which amended IFRS 16 Leases. The 2020 amendment permitted lessees, as a practical
expedient, not to assess whether particular rent concessions occurring as a direct consequence of the
COVID-19 pandemic are lease modifications and, instead, to account for those rent concessions as if they
were not lease modifications. Among other conditions, the 2020 amendment permitted lessees to apply
the practical expedient only to rent concessions for which any reduction in lease payments affects only
payments originally due on or before 30 June 2021. If a rent concession reduces lease payments both
before and after 30 June 2021, IFRS 16 does not permit the practical expedient to be applied to that
concession.
These amendments are effective in European Union for annual reporting periods beginning on or after 1
April 2021. In the management’s opinion, these amendments do not have a material impact on these
financial statements as no significant concessions/discounts were received during the reporting period
and are not expected to be received in subsequent periods.
Interest Rate Benchmark Reform– Phase 2– IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amend-
ments) (issued on 27 August 2020 with effective date of 1 January 2021)
The amendments provide temporary reliefs which address the financial reporting effects when an inter-
bank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly re-
quired by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in
a market rate of interest.
• Permit changes required by IBOR reform to be made to hedge designations and hedge documenta-
tion without the hedging relationship being discontinued.
• Provide temporary relief to entities from having to meet the separately identifiable requirement
when an RFR instrument is designated as a hedge of a risk component.
These amendments are effective in European Union for annual reporting periods beginning on or after 1
January 2021. The management assessed that these amendments has no material impact on the financial
statements.
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (issued on 27 August
2020 with effective date of 1 January 2021 and must be applied retrospectively)
Amendments to IFRS 9, IAS 39 and IFRS 7 bring to a conclusion phase two which is focused on issues
that could affect financial reporting when an existing interest rate benchmark is replaced with a risk-free
interest rate (an RFR). These amendments will have no impact on these financial statements.
(b) Standards issued but not yet effective and not early adopted and their amendments
New standards, amendments and interpretations that are not mandatory for reporting period beginning on
1 January 2021 and have not been early adopted when preparing these financial statements are presented
below:
18
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Con-
tingent Liabilities and Contingent Assets as well as Annual Improvements 2018-2020 (Amend-
ments) (all issued on 14 May 2020 with effective date of 1 January 2022)
The IASB has issued narrow-scope amendments to the IFRS Standards as follows:
• IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the Conceptual
Framework for Financial Reporting without changing the accounting requirements for business com-
binations.
• IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from
the cost of property, plant and equipment amounts received from selling items produced while the
company is preparing the asset for its intended use. Instead, a company will recognise such sales
proceeds and related cost in profit or loss of the statement of profit or loss and other comprehensive
income.
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which
costs a company includes in determining the cost of fulfilling a contract for the purpose of assessing
whether a contract is onerous.
• Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of In-
ternational Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and
the Illustrative Examples accompanying IFRS 16 Leases
These amendments are effective in European Union for annual reporting periods beginning on or after 1
January 2022. The management is currently assessing the impact of these amendments on financial state-
ments.
IFRS 17 and IFRS 4: the Deferral of Effective Dates of IFRS 17 and IFRS 9 for Insurers (Amend-
ments) (issued on 25 June 2020 with effective date of 1 January 2023, but not before it is adopted by the
EU).
The amendments to IFRS 17 are effective, retrospectively, for annual periods beginning on or after 1
January 2023, with earlier application permitted. The amendments aim at helping companies implement
the Standard. Overall, the amendments are designed to reduce costs by simplifying some requirements in
the standard; make it easier to explain financial performance; and ease transition by deferring the effective
date of the standard to 2023 and by providing additional relief to reduce the effort required when applying
IFRS 17 for the first time.
The amendments to IFRS 4 change the fixed expiry date for the temporary exemption in IFRS 4 Insurance
Contracts from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS
9 for annual periods beginning on or after January 1, 2023.
The management has assessed that these amendments will not have any impact on the Company’s and
the Group’s financial statements.
IFRS 17 Insurance Contracts (issued on 18 May 2017 with effective date of 1 January 2023, but not
before it is adopted by the EU).
The standard is effective for annual periods beginning on or after 1 January 2021 with earlier application
permitted if both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments
have also been applied. In its March 2020 meeting the Board decided to defer the effective date to 2023.
IFRS 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and
disclosure of insurance contracts issued. It also requires similar principles to be applied to reinsurance
contracts held and investment contracts with discretionary participation features issued. The objective is
to ensure that entities provide relevant information in a way that faithfully represents those contracts. This
information gives a basis for users of financial statements to assess the effect that contracts within the
scope of IFRS 17 have on the financial position, financial performance and cash flows of an entity. This
IFRS will not have any impact on the financial position or performance of the Group and Company as
insurance services are not provided.
IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transac-
tion (Amendments) (issued on 7 May 2021 with effective date of 1 January 2023, but not before it is
adopted by the EU).
19
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
Under the amendments, the initial recognition exception does not apply to transactions that, on initial
recognition, give rise to equal taxable and deductible temporary differences. The amendments become
effective for annual reporting periods beginning on or after 1 January 2023 with earlier application per-
mitted. The amendments have not yet been endorsed by the EU. The management has not yet evaluated
the impact of the implementation of these amendments.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (Amendments) (issued on 12 February 2021 with effective date of 1 January 2023, but not
before it is adopted by the EU)
The amendments introduce a new definition of accounting estimates, defined as monetary amounts in
financial statements that are subject to measurement uncertainty. Also, the amendments clarify what
changes in accounting estimates are and how these differ from changes in accounting policies and cor-
rections of errors. The amendments become effective for annual reporting periods beginning on or after
1 January 2023 with earlier application permitted and apply to changes in accounting policies and changes
in accounting estimates that occur on or after the start of that period. The amendments have not yet been
endorsed by the EU. The management has not yet evaluated the impact of the implementation of these
amendments.
Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current (issued on 23 Janu-
ary 2020 with effective date of 1 January 2023, but not before it is adopted by the EU).
The amendments aim to promote consistency in applying the requirements by helping companies deter-
mine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement
date should be classified as current or non-current. The amendments affect the presentation of liabilities
in the statement of financial position and do not change existing requirements around measurement or
timing of recognition of any asset, liability, income or expenses, nor the information that entities disclose
about those items Also, the amendments clarify the classification requirements for debt which may be
settled by the company issuing own equity instruments. The management has not yet evaluated the impact
of the implementation of these amendments.
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Account-
ing policies (Amendments) (issued on 12 February 2021 with effective date of 1 January 2023, but not
before it is adopted by the EU).
The amendments effective for reporting periods beginning on or after 1 January 2023. Earlier application
is permitted. The amendments provide guidance on the application of materiality judgements to account-
ing policy disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose ‘sig-
nificant’ accounting policies with a requirement to disclose ‘material’ accounting policies. Also, guidance
and illustrative examples are added in the Practice Statement to assist in the application of the materiality
concept when making judgements about accounting policy disclosures. The amendments have not yet
been endorsed by the EU. The management has not yet evaluated the impact of the implementation of
these amendments.
3.1 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 by the European Central Bank ruling
at that date. The foreign currency gain or loss on monetary items is recognised in profit or loss. Non-
monetary assets and liabilities denominated in foreign currencies that are measured at fair value are re-
translated 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 trans-
lated to the functional currency at the exchange rate at the date that the asset or liability is recognised in
statement of financial position. Foreign currency differences arising on translation are recognised in profit
or loss.
20
AB „Panevėžio statybos trestas“
Separate Financial Statements
3.2 Financial Instruments
Financial instrument: a contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Initial recognition and measurement
At initial recognition, financial asset is classified as either measured at amortised cost, fair value through
other comprehensive income or fair value through profit or loss.
The classification of the financial asset depends on the contractual cash flow characteristics of the asset
and the Company’s business model for managing the asset. These assets, except for trade receivables that
do not have a significant financing component, are initially measured by the Company at fair value plus,
in the case of a financial asset or financial liability not at fair value through profit or loss, transaction
costs. Trade receivables that do not have a significant financing component are measured at the transac-
tion price identified under IFRS 15.
Financial asset is classified and measured at amortised cost or fair value through other comprehensive
income, where cash flows arising from financial asset are solely payments of principal and interest (SPPI)
on the principal amount outstanding. This assessment is known as the SPPI test and is performed for each
financial instrument.
The Company’s financial asset management model indicates how the Company manages its financial
assets to generate cash flows. The business model determines whether cash flows will be generated by
collecting contractual cash flows, by selling this financial asset or by using both options.
Ordinary purchases or sales of financial assets are recognised on the trade date, i.e. the date on which the
Company commits to purchase or sell the financial asset.
Subsequent measurement
After initial recognition, the Company measures financial assets:
(a) At amortised cost (debt instruments).
At fair value through other comprehensive income with recycling of cumulative gains and losses upon
derecognition (debt instruments). As at 31 December 2021 and 2020, the Company did not have such
financial instruments.
(c) At fair value through other comprehensive income with no recycling of cumulative gains and losses
upon derecognition (equity instruments). As at 31 December 2021 and 2020, the Company did not
have such financial instruments.
(d) At fair value through profit or loss. As at 31 December 2021 and 2020, the Company did not have
such financial instruments.
Financial asset at amortised cost (debt instruments)
The Company measures financial assets at amortised cost, if the two conditions are met:
(i) The financial asset is held within a business model with the objective to hold financial assets in order
to collect contractual cash flows; and
(ii) Contractual terms and conditions of financial asset allow for obtaining cash flows, on certain dates,
which are solely the payments of the principal or the interest on the outstanding principal.
Financial assets measured at amortised cost are subsequently accounted for by applying the effective
interest method (EIR) less impairment losses. Gains or losses are recognised in the statement of compre-
hensive income when the asset is derecognised, replaced or impaired.
The Company’s financial assets at amortised cost includes trade, other current and non-current receiva-
bles, loans granted.
21
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.2 Financial Instruments (continued)
Impairment of financial assets
In general, IFRS 9 requires the Company to recognize expected credit losses (ECLs) for all debt instru-
ments that are not measured at fair value through profit or loss. ECLs are based on the difference between
the contractual cash flows due in accordance with the contract and all the cash flows that the Company
expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recog-
nised in two stages.
For credit exposures for which there has not been a significant increase in credit risk since initial recog-
nition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase
in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs.
Therefore, the Company does not track changes in credit risk, but instead recognises an impairment loss
based on lifetime ECLs at each reporting date.
(a) Assessment of impairment of trade receivables and contract assets
Based on the Company’s management assessment, trade receivables and contract assets do not include a
significant financing component and are accordingly measured for impairment using the simplified
method, i.e. management makes an individual assessment of expected credit losses for each important
customer taking into account its credit history, future factors and subjective risk factors related to the
borrower. To assess all other receivables the Company uses the expected loss rate matrix which is based
on historical credit loss analysis and adjusted to reflect future factors specific to borrowers and the eco-
nomic environment.
(b) Estimation of the impairment of loans granted
The Company grants loans to the Group companies with a fixed maturity as it is disclosed in Note 17.
For assessment of impairment of loans granted the expected 12-months credit losses are assessed and
accounted upon issue of the loan. In subsequent periods, given the absence of significant increase in the
credit risk associated with the debtor, the Company reassesses the 12-months ECL balance based on the
loan amount still outstanding as of the date of the re-assessment. If it is determined that the financial
position of the debtor has significantly deteriorated compared to the position prevailing at the time of the
loan issue, the Company accounts for all the ECLs over the remaining life of the loan. Loans subject to
assessment of lifetime ECLs are considered to be credit-impaired financial assets.
The Company considers a financial asset in default when contractual payments are 90 days past due or
when indications exist that the debtors or a group of debtors are experiencing significant financial diffi-
culty, they breach the contract (such as a default or delinquency in interest or principal payments), there
exists a probability that they will enter bankruptcy or other financial reorganisation, and in cases where
observable data indicate that there is a measurable decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate with defaults.
ECLs for loans and trade receivables is accounted for through profit/loss using allowance for doubtful
debts. A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows.
Financial liabilities
Initial recognition and measurement:
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans received and payables. All financial liabilities are recognised initially at fair value and, in
the case of loans received and payables, net of directly attributable transaction costs. The Company’s
financial liabilities include trade and other payables, loans received, including bank overdrafts.
22
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.2 Financial Instruments (continued)
Subsequent measurement
Measurement of financial liabilities depends on their classification as described below.
Loans received and other payables
After initial recognition, loans and other payables are carried at amortised cost using the effective interest
method (EIR). Gains and losses are recognised in the statement of comprehensive income when the lia-
bilities are derecognised or amortised. Amortised cost is calculated by reference to the discount or pre-
mium on acquisition, as well as taxes or costs that are an integral part of the EIR. EIR amortization is
included in financial expenses in the statement of comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of fi-
nancial position if there is a currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, i.e. to realise the assets and settle the liabilities simultaneously.
Derecognition of Financial Assets and Liabilities
Financial assets
A financial asset (or, where appropriate, a part of a financial asset or part of a group of similar financial
assets) is derecognised (i.e. it is removed from the statement of financial position of the Company) when:
(i) the contractual rights to receive cash flows from the financial asset have expired; or
(ii) the Company has transferred its contractual rights to receive cash flows from the financial asset;
or undertakes to remit, without material delay, any cash flows received to a third party under a
transfer agreement and (a) has transferred substantially all risks and rewards of the asset, or (b)
has neither transferred, nor retained substantially all the risks and rewards of the asset but has
transferred control of the asset.
Once the Company transfers the contractual rights to receive the cash flows of the financial asset or enters
into a qualifying pass-through arrangement with a third party, the Company evaluates whether and to
what extent it retains the risks and rewards of ownership of the financial asset. When the Company neither
transfers nor retains substantially all the risks and rewards of the asset nor transfers control of the asset,
the asset is recognised to the extent of the Company’s continuing involvement in the asset. In this case,
the Company also recognizes the associated liability. The transferred asset and associated liability are
measured based on the rights and obligations retained by the Company.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower amount of the original carrying amount of the asset and the maximum amount of consideration that
the Company could be required to repay (the amount of the guarantee).
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or
expires. When a present financial liability is swapped with other liability to the same lessor, although,
upon other conditions or when the present liability terms are substantially changed, this change is recog-
nized as initial derecognition and establishment of a new liability. The difference between respective
balance values is recognised in the statement of comprehensive income.
3.3 Property, Plant and Equipment
Items of property, plant and equipment except for land and buildings are measured at cost less accumu-
lated depreciation and accumulated impairment losses. Depreciation is calculated using a straight-line
method over the assessed useful life of an asset.
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 land and buildings do not significantly differ from their fair values as at
reporting date.
23
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.3 Property, Plant and Equipment (continued)
The fair value of land and buildings is established by certified independent real estate appraisers. The
revaluation reserve of land and buildings is reduced by an amount equal to the difference between the
depreciation based on the revalued carrying amount and the depreciation based on the original cost of the
land and buildings each year and is transferred directly to retained earnings or loss.
In case of revaluation, when the estimated fair value of the assets exceeds their residual value, the residual
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 re-
valuation is recognised as income to the extent it does not exceed the decrease of previous revaluation
recognised in profit or loss. Depreciation is calculated from the depreciable amount which is equal to
acquisition cost or revaluated amount less residual value of an asset.
The accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount
of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal or recog-
nising regular depreciation charge, any revaluation surplus relating to the particular asset being depreci-
ation or sold is transferred to retained earnings.
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 capitalised.
When components of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is recognised 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 residual value of the replaced part is derecognised.
The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as
incurred.
Depreciation is calculated 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 and structures 8–40 years
• Plant and equipment 5–10 years
• Vehicles 5–10 years
• Fixtures and fittings 3–6 years
Depreciation methods, residual values and useful lives are reviewed at each reporting date.
Gains and losses on disposal are determined by comparing the proceeds from disposal with the residual
value of property, plant and equipment and are recognised net within other income or expenses. When
revalued assets are sold or reclassified, the amounts included in the revaluation surplus reserve are trans-
ferred to retained earnings.
3.4 Intangible Assets
Software and other intangible assets, which have finite useful lives, are measured at cost less accumulated
amortization and accumulated impairment losses. Amortisation is recognised 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. The Company does not have any intangible assets with infinite
useful life.
24
AB „Panevėžio statybos trestas“
Separate Financial Statements
3.5 Investment Property
Investment property of the Company consist of buildings that are held to earn rentals or for capital ap-
preciation, rather than for use in the production, or supply of goods, or services or for administration
purposes, or sale in the ordinary course of business.
Investment property is measured initially at cost, including transaction costs. Subsequent to initial recog-
nition, investment property is measured at fair value, which reflects market conditions at the reporting
date. Gains or losses arising from changes in the fair values of investment property are included in the
profit or loss in the period in which they arise.
Acquisition cost includes expenditure that is directly attributable to the acquisition of the assets. The cost
of self-constructed assets includes the cost of materials and direct labour, any other costs directly attribut-
able 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 capitalised.
Investment property is derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is recognised in
the profit or loss in the period of derecognition.
Transfers are made to or from investment property only when there is a change in use. For a transfer from
investment property to owner-occupied property, plant and equipment, the deemed cost for subsequent
accounting is the fair value at the date of change in use. If owner-occupied property, plant and equipment
is reclassified to investment property, the Company accounts for such property in accordance with the
policy stated under property, plant and equipment up to the date of change in use.
3.6 Leased Assets and Lease Liabilities
A. Company as a lessee
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The Company (as a lessee) applies a single recognition and measurement approach for all leases, except
for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make
lease payments and right-of-use assets representing the right to use the underlying assets. The Company
had only few asset (car) lease contracts that are insignificant at the beginning of 2020, however, a long-
term lease agreement for premises was signed on 9 September 2020, and the long-term lease agreement
for cars was signed at the end of 2020 and during 2021.
Right of use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of the initial measurement of the lease liability, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease incen-
tives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets, as follows:
• Cars 3 years
• Buildings and structures 5 years
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
25
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.6 Leased Assets and Lease Liabilities (continued)
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to produce inventories) in the period in which the event
or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the estimates of inter-
est and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-
measured if there is a modification, a change in the lease term, a change in the lease payments (e.g.,
changes to future payments resulting from a change in an index or rate used to determine such lease
payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company apply the short-term lease recognition exemption to its non-current-asset (i.e., those leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option). Lease payments on short term leases and leases of low-value assets are recognised as expense on
a straight-line basis over the lease term.
(B) The Company as a lessor:
The Company’s buildings that are leased under the operating lease agreements are accounted in the state-
ment of financial position as investment property. Lease income is recognised on a straight line basis over
the lease period.
3.7 Investments in Subsidiaries and Joint Arrangements
Investments in subsidiaries are accounted for at cost less impairment.
A joint arrangement is an arrangement of which two or more parties have joint control. These arrangement
has the following characteristics:
• The parties are bound by a contractual arrangement.
• The contractual arrangement gives two or more of those parties joint control of the arrangement.
The Company has a joint arrangement that is a joint operation (Note 16).
As a joint operator the Company recognises in relation to its interest in a joint operation:
• its assets, including its share of any assets held jointly;
• its liabilities, including its share of any liabilities incurred jointly;
• its revenue from the sale of its share of the output arising from the joint operation;
• its share of the revenue from the sale of the output by the joint operation; and
• its expenses, including its share of any expenses incurred jointly.
3.8 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 (FIFO) principle, and includes expenditure incurred in acquiring the inventories, pro-
duction 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 comple-
tion and selling expenses.
26
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.8 Inventories (continued)
Inventories related to ongoing construction projects are accounted for under inventories caption in the
statement of financial position until inventories are used in construction process and further are accounted
for as cost of sales. Project related inventories’ accounting policy is the same as stated above.
Unrealisable inventory is fully written-off.
3.9 Cash and Cash Equivalents
Cash includes cash on hand and cash at banks. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash with original maturities of 3 months or less and
that are subject to an insignificant risk of change in value.
For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and in
current bank accounts, as well as deposits in bank with original term equal to or less than 3 months.
3.10 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 that are largely independent of the cash inflows of other assets or groups
of assets.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds
its estimated recoverable amount. An impairment loss on a non-revalued asset is recognised in profit or
loss. However, an impairment loss on a revalued asset is recognised in other comprehensive income to
the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same
asset. Such an impairment loss on a revalued asset reduces the revaluation surplus for that asset.
Impairment losses recognised 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 recognised.
3.11 Dividends
Dividends are recognised as a liability in the period in which they are declared.
3.12 Provisions
A provision is recognised 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 dis-
counting the expected future cash flows to their present value 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 recognised when the underlying construction services are sold, i.e. assurance
type warranties, as the Company does not grant additional warranties to the customers. The provision is
based on historical warranty costs data and probabilities.
27
AB „Panevėžio statybos trestas“
Separate Financial Statements
3.13 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.
In accordance with the requirements of the Labour Code of the Republic of Lithuania, each employee
leaving the Company at the age of retirement is entitled to a one-off payment amounting to two-month
salary. Previously incurred service costs are recognised as expenses on a straight-line basis over the av-
erage period until the benefits become vested. Any gains or losses appearing as a result of changes in
terms of benefits (curtailment or settlement) are recognised in the statement of comprehensive income as
incurred. Current year cost of employee benefits is recognised as incurred in the statement of comprehen-
sive income. The above mentioned employee benefit obligation is calculated based on actuarial assump-
tions, using the projected unit credit method. Obligation is recognised in the statement of financial posi-
tion and reflects the present value of these benefits on the preparation date of the statement of financial
position. Present value of the non-current obligation to employees is determined by discounting estimated
future cash flows using the discount rate which reflects the interest rate of the Government bonds of the
same currency and similar maturity as the employment benefits. Actuarial gains and losses are recognised
in other comprehensive income as incurred.
Short-term employee benefits are recognised as a current expense in the period when employees render
the services, and include salaries, social security contributions, bonuses, paid holidays and other benefits.
3.14 Revenue
Revenue from contracts with customers
The Company is engaged in construction of buildings, structures, plant and equipment and communica-
tion facilities. Revenue from contracts with customers is recognised at the amount to which the entity
expects to be entitled to in return for the sale of goods or services when a control of goods or services is
transferred to the customer. Generally, the Company does not have significant variable components of
remuneration in its contracts with customers.
The Company has concluded that generally it is the principal in its construction services contracts even
when the subcontractors are used in the implementation of the projects, because the Company:
- controls the goods and services before transferring them to the customer;
- is responsible for the overall performance of the contract with customer and is exposed to default risk;
- has discretion in establishing the price.
Performance obligations arising from the construction contracts with customers are fulfilled over time
and respectively revenue from the construction and installation services are recognised over time if any
of the following criteria are met: (a) the customer simultaneously receives and consumes the benefits
provided by the Company’s performance; (b) the Company’s performance creates or enhances an asset
that the customer controls as the asset is created or enhanced; or (c) the Company’s performance does not
create an asset with an alternative use and the Company has an enforceable right to payment for perfor-
mance completed to date.
When the Company can reasonably measure its progress towards complete satisfaction of the perfor-
mance obligation, the Company recognises revenue and expenses in relation to each construction contract
over time, based on the progress of performance. The progress of performance is assessed based on the
proportion of the costs incurred in fulfilling the contract up to date over to the total estimated costs of the
construction contract.
When the outcome of a contract cannot be estimated reliably (e. g, in the early stages of a contract), only
the portion of the contract costs incurred that is expected to be recovered is recognised as revenue.
Contract modification (scope or price or both) are accounted for as a separate contract if the scope of the
contract increases because of the addition of promised goods or services that are distinct and the price of
the contract increases by an amount of consideration that reflects the Group’s stand-alone selling prices
of the additional promised goods or services in the circumstances of the particular contract. Otherwise
the contract modification is accounted as (a) termination of the existing contract and the creation of a new
contract, if the remaining goods or services are distinct from the goods or services transferred on or before
the date of the contract modification, or (b) part of the existing contract if the remaining goods or services
are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at
the date of the contract modification. The effect that the contract modification has on the transaction price,
and on the Company's measure of progress towards complete satisfaction of the performance obligation,
is recognised as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date
of the contract modification.
28
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Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.14 Revenue (continued)
Provisions for loss making contracts are recognised when the Company has a present obligation (legal or
constructive) to complete the construction contract for the third party for the price that is lower than the
total estimated cost to perform the contract as of the date of the financial statements. The difference
between the contract price and the total estimated cost of delivery under the contract is recognised in the
statement of comprehensive income at the reporting date. Where the contract costs are expected to exceed
contract revenue, the loss is recognised immediately in profit or loss. When performing the contracts the
Company may receive short-term prepayments from its customers. Applying the practical expedient, the
Company is not adjusting the price allocation by the financing component, if at the inception of the con-
tract it is expected that the time period from the customer payment for goods/services until the delivery
of these goods/services will not exceed one year.
Balances under contract
Contract assets
Contract asset is the right of the Company to remuneration in exchange for the goods or services that have
been transferred to the customer. If the Company performs the contract by transferring goods or services
to a customer before the customer pays consideration or before the Company’s right to amount of consid-
eration is unconditional, the Company reports such a right to consideration as a contract asset, except for
any amounts reported as receivables.
Receivables
Receivable represents the Company’s right to an amount of consideration that is unconditional, i.e., only
the passage of time is required before payment of the consideration is due. Receivables are accounted for
in accordance with IFRS 9 (Note 3.2).
Contract liability
A contract liability is the Company’s obligation to transfer goods or services to a customer for which the
Company has received consideration (or an amount of consideration is due) from the customer. Contract
liability is recognised as revenue when the Company performs under the contract.
Revenue from the sale of other services or goods is recognised when the services are rendered or control
of the inventory is transferred, but such transactions are relatively insignificant.
3.15 Finance Income and Expense
Financial income comprises interest income and dividend income. Interest income is recognised as it
accrues, using the effective interest method. Dividend income is recognised on the date that the Com-
pany’s right to receive payment is established. Financial costs comprise interest expense and other finan-
cial expenses. All borrowing costs are recognised using the effective interest method. Foreign currency
gains and losses are reported on a net basis in profit or loss.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that neces-
sarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the
cost of the respective assets. Other borrowing costs are expensed as incurred.
3.16 Income Tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or
loss except to the extent that it relates to items recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the
reporting date.
Deferred taxes are calculated using the balance sheet liability method. Deferred tax is recognised, provid-
ing for temporary differences between the carrying values of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured
using the tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled based on tax rates enacted or substantially enacted at the date of
the statement of financial position.
29
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Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.16 Income Tax (continued)
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be avail-
able against which the asset can be utilised. 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 realised.
Starting from 1 January 2014, the tax loss carried forward cannot exceed 70% of the taxable profit of
current financial year in Lithuania. Tax losses can be carried forward for indefinite period, except for
the losses incurred as a result of disposal of securities and/or derivative financial instruments. Such car-
rying forward is disrupted if the company changes its activities due to which these losses were incurred
except when the entity does not continue its activities due to reasons which do not depend on the Com-
pany itself. The losses from disposal of securities and/or derivative financial instruments can be carried
forward for 5 consecutive years and can only be used to reduce the taxable income earned from the
transactions of the same nature.
3.17 Earnings per Share
The Company presents basic and diluted earnings per share (EPS) data. 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.
3.18 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. For management purpose, the Company is considered
as a single construction activity business segment. Due to this no additional disclosures are presented in
these financial statements regarding segments on the Company level.
In 2021 and 2020, the Company also does not distinguish geographical segments, as the Company’s
income from foreign countries did not account for more than 10% of the total income and most of its non-
current assets are also located in Lithuania.
3.19 Determination of Fair Value
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 ob-
tained 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:
30
AB „Panevėžio statybos trestas“
Separate Financial Statements
3 Summary of Significant Accounting Policies (continued)
3.19 Determination of Fair Value (continued)
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 liabil-
ity, 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).
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 recognises 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 methods and
assumptions described in Notes 13, 15, 16 and 29. Where applicable, further information about the as-
sumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
3.20 Offsetting
When preparing the financial statements, assets and liabilities as well as revenues and expenses are not
set off except for the cases where the International Financial Reporting Standards specifically require
such off-setting.
4 Financial Risk Management
Overview
The Company has exposure to the following financial 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 manage-
ment framework. The Company’s risk management policies are established to identify and analyse 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 liabilities.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its
contract liabilities, 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 analysed for creditworthiness before the standard payment
terms and conditions are offered. Customers that fail to meet the benchmark creditworthiness may trans-
act with the Company only on a prepayment basis.
The measure of credit risk is the maximum credit risk for each class of financial instruments, which is
equal to their carrying amount. The maximum amount of exposure to credit risk in relation to particular
classes corresponds to their carrying amount.
31
AB „Panevėžio statybos trestas“
Separate Financial Statements
4 Financial Risk Management (continued)
The maximum exposure to credit risk is set out below:
(EUR thousand)
2021
2020
Trade receivables and contract assets
14,860
11,510
Loans granted
7,194
27,781
Cash and cash equivalents
5,795
4,648
Total
27,849
43,939
Trade receivables and contract assets:
(EUR thousand)
2021
2020
Municipalities and state institutions
3,305
605
Legal persons
11,555
10,905
Total trade receivables and contract assets
14,860
11,510
In the statement of financial position, trade receivables and contract assets (i.e. accrued income on the
stage of completion) are accounted for under the caption “Non-current and current trade receivables and
contract assets”, as disclosed in Note 19.
Breakdown of the largest credit risks related to trade receivables and contract assets by customers as at
the reporting date:
(EUR thousand)
2021
%
2020
%
Client 1
2,099
14.1
2,618
22.8
Customer No 2
1,692
11.4
1,965
17.1
Customer No 3
925
6.2
797
6.9
Customer No 4
826
5.6
739
6.4
Customer No 5
763
5.1
719
6.2
Customer No 6
468
3.1
597
5.2
Customer No 7
467
3.1
478
4.2
Other customers
7,750
52.3
3,754
32.6
Impairment
(130)
(0.9)
(157)
(1.4)
Total
14,860
100
11,510
100
Breakdown of trade receivables and contract assets by geographic regions:
(EUR thousand)
2021
2020
Local market (Lithuania)
14,375
10,285
Latvia
485
1,225
Total
14,860
11,510
Ageing of (gross) trade receivables as at the reporting date can be specified as follows:
(EUR thousand)
2021
Impairment
2020
Impairment
Not overdue
11,946
8,650
Overdue 0–30 days
1,857
899
Overdue 30-90 days
1,016
478
More than 90 days
171
130
1,640
157
Total
14,990
130
11,667
157
The Company establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade receivables.
32
AB „Panevėžio statybos trestas“
Separate Financial Statements
4 Financial Risk Management (continued)
The main components of this allowance are specific losses that relate to individually significant accounts
receivable and expected credit losses recognised using ECLs method (in line with IFRS 9). Methodology
used for establishing the allowance is reviewed regularly to reduce any differences between loss estimate
and actual loss experienced.
Maturity and ageing of loans granted is presented in Note 17.
As at 31 December 2021 and 2020, the Company’s other current financial assets were fully impaired
(Note 20).
Cash and cash equivalents comprise cash on hand and at bank; therefore, the related credit risk is rela-
tively low.
Apart from the impairment already recognised as at 31 December 2021, the management considers that
there is no significant risk of material loss to the Company.
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 risk 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, with-
out incurring unacceptable losses or risking damage to the Company’s reputation. Typically, the Com-
pany ensures that it has sufficient cash on demand to meet expected operating expenses, including the
servicing of borrowings;
As at 31 December 2020, the Company’s current liabilities exceeded current assets by EUR 4,772 thou-
sand. This liquidity gap resulted from the decision of the management to report the entire amount of
payable penalty and related amounts to the State Tax Authority according to the decision of the Compe-
tition Council under current liabilities caption in the statement of financial position as there is no agree-
ment for the deferral of payments signed yet and the Company only has a decision letter from the Tax
Authority (also see Note 28) based on which the management currently makes the payments of the penalty
in equal instalments over eight years period. The aforementioned VMI decision provides the Company
with certain conditions for the deferral period, including restrictions on the payment of dividends. As at
31 December 2021, the aforementioned agreement with the State Tax Authority was still pending, how-
ever, the Company makes monthly payments of the penalty and interest in accordance with the established
schedule. As at 31 December 2021, the Company’s current assets exceeded its current liabilities by EUR
3,108 thousand.
Payment terms of financial liabilities, including calculated interest, as to the agreements, as at 31 Decem-
ber 2021 are presented below:
(EUR thousand)
Carrying
amount
Contractual net cash
flows
Up to 6
months
More than 6
months
Liabilities
Trade payables
11,811
11,811
11,811
0
Lease liabilities
977
9,77
146
831
Liabilities related to the fine imposed by the Competition
Council*
8,542
8,542
8,542
0
Total
21,330
21,330
20,499
831
* The entire amount of the penalty is presented as payable during 6 months because as describe above the management while
preparing these financial statements made a judgement that the Company has not yet an unconditional and contractual right to
defer the payment when there is no signed the agreement with the Tax Authority and currently the Company pays the penalty in
equal parts for a period of eight years (without additional interest).
33
AB „Panevėžio statybos trestas“
Separate Financial Statements
4 Financial Risk Management (continued)
Payment terms of financial liabilities, including calculated interest, as to the agreements, as at 31 Decem-
ber 2020 are presented below:
(EUR thousand)
Carrying amount
Contractual net cash
flows
Up to 6 months
More than 6
months
Liabilities
Loans (overdraft)*
15,000
16,609
16,609
0
Lease liabilities
1,129
1,129
126
1,003
Liabilities related to the fine imposed by
the Competition Council**
9,808
9,808
9,808
0
Trade payables
8,187
8,187
8,187
0
Total
34,124
35,733
34,730
1,003
The maturity of the overdraft according repayment schedule is within 6 months. As disclosed in Note 23, the Company failed to
satisfy one of the financial ratios of the overdraft as at 31 December 2020 and due to the breach the bank has a right to request
early repayment of the overdraft.
** The entire amount of the penalty is presented as payable during 6 months because as describe above the management while
preparing these financial statements made a judgement that the Company has not yet an unconditional and contractual right to
defer the payment when there is no signed the agreement with the Tax Authority and currently the Company pays the penalty in
equal parts for a period of eight years (without additional interest).
On 17 June 2021, an overdraft agreement was signed with bank with the limit of EUR 5 million. As at 31
December 2021 overdraft limit was not used (Note 23).
Change in Liabilities Arising from Financing Activities
(EUR thousand)
As at
31/12/2020
Accrued
Cash flow
in/out
Other
As at
31/12/2021
Loans received
15,000
0
(15,000)
0
0
Dividends payable
29
0
0
0
29
Interests payable
1,387
(1,387)
0
0
Lease liabilities
1,129
0
(152)
0
977
Total
17,545
0
(16,539)
0
1,006
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. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return. As at 31 De-
cember 2021 and 2020, the Company did not use any derivatives.
Currency risk. The Company is exposed to the significant risk of changes in foreign currency rates, since
sales and receivables, purchases, payables and borrowings are denominated in a currency other than the
functional currency are not material. The majority of monetary assets and liabilities as at 31 December
2021 and 2020 were denominated in EUR.
Interest rate risk. The Company’s issued and received loans and borrowings are subject to variable in-
terest rates linked to EURIBOR. No financial instruments are used to manage the risk. Taking into con-
sideration the current level of issued loans, the change of interest rate would not have a material effect as
disclosed below.
34
AB „Panevėžio statybos trestas“
Separate Financial Statements
4 Financial Risk Management (continued)
The Company’s financial assets and borrowings subject to variable interest rates outstanding as of 31
December 2021 were as follows:
Contract cur-
rency
2021
2020
Long-term loans granted
EUR’000
5,799
12,781
Short-term loans granted
1,395
15,000
Total
7,194
27,781
Loans received (overdraft)
EUR’000
0
15,000
Total
0
15,000
With an increase in the interest rate by 0.5% as at 31 December 2021, the Company’s net profit would
increase by approximately EUR 35 thousand. With an increase in the interest rate by 0.5% as at 31 De-
cember 2020, the Company’s net profit would increase by approximately EUR 64 thousand (EUR 139
thousand increase due to loans granted and EUR 75 thousand decrease due to loans received).
Capital management
The policy of the Board 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.
The Board also aims to keep balance between higher return, which could be available if there was higher
level of borrowed “funds” and security, which is provided by higher level of equity. The Company ad-
heres to the requirement set in the Law on Companies of the Republic of Lithuania under which the equity
of the Company must not be less than ½ of the issued capital. As at 31 December 2021 and 2020, the
Company was in line with this regulation. The Company’s capital management policy did not change
during the year.
For capital management purpose, capital consists of share capital, retained earnings, revaluation reserve
and legal reserve.
5 Revenue from Contracts with Customers
Revenue is derived from construction-installation work (approx. 99% in 2021 and 2020).
(EUR thousand)
2021
2020
Lithuania
63,863
58,399
Latvia
1,858
1,313
Sales in total
65,721
59,712
Revenue from the largest external customer of the Company in 2021 amounted to approximately EUR
8,406 thousand (in 2020: EUR 2,618 thousand) of the Company’s total revenues.
In 2021, the Company recognised EUR 1,731 thousand of revenue from contracts with customers that
were included to the balance of contract liabilities at the beginning of the period (in 2020: EUR 1,850
thousand).
Information on contracts outstanding at the end of the financial year is disclosed in Note 19.
35
AB „Panevėžio statybos trestas“
Separate Financial Statements
6 Cost of Sales
(EUR thousand)
2021
2020
Construction sub-contractors
33,162
30,957
Raw materials and consumables
11,183
11,234
Salary related expenses (Note 9)
8,814
9,052
Depreciation charge
509
633
Amortisation charge
13
21
Machinery expenses
1,335
1,241
Rent expenses (short term lease)
1,304
1,384
Other expenses
3,568
4,009
Total cost of sales
59,888
58,531
7 Selling Expenses
(EUR thousand)
2021
2020
Advertising and other expenses
56
27
Salary related expenses (Note 9)
299
256
Total selling expenses
355
283
8 Administrative Expenses
(EUR thousand)
2021
2020
Salary related expenses (Note 9)
4,325
2,633
Purchased services for administrative use
1,015
742
Fine imposed by the Competition Council (Note 28)
0
8,514
Provision for bailiff expenses (Note 28)
0
396
Rent expenses
254
20
Depreciation expense on right-of-use assets
12
65
Depreciation charge
279
273
Remuneration to the Board members
0
118
Operating taxes other than income tax
103
110
Sponsorship
4
72
Amortisation charge
17
5
Total expenses of impairment (reversal of impairment) of trade
receivables, contract assets and other receivables:
(235)
120
Impairment (reversal of impairment) of trade receivables (Note 19)
(18)
89
9.9 Impairment of other receivables
(217)
31
Other expenses
648
425
Total administrative expenses
6,422
13,493
9 Wages and Salaries
(EUR thousand)
2021
2020
Wages and salaries
11,670
10,876
Social security contributions
224
215
Daily allowances and incapacity benefits
1,085
895
Change in accrued vacation reserve and bonuses
489
(197)
Change in pension provision (Notes 25 and 27)
(13)
164
Total salary related expenses
13,455
11,953
Recognised in:
Cost of sales
8,814
9,052
Administrative expenses
4,325
2,633
Selling expenses
299
256
Other operating expenses
17
12
Total salary related expenses
13,455
11,953
36
AB „Panevėžio statybos trestas“
Separate Financial Statements
10 Other Income and Expenses
(EUR thousand)
2021
2020
Gain from sale of property, plant and equipment
163
51
Rental income (Note 15)
324
373
Other revenue
498
435
Total other income
985
859
Depreciation of rented premises
(30)
(293)
Other expenses
(482)
(413)
Total other expenses
(512)
(706)
Total other income and expenses, net
473
153
11 Finance Income and Expense
(EUR thousand)
2021
2020
Interest income
555
726
Dividend income
402
501
4
Total finance income
957
1,227
Interest expenses, related to penalty imposed by the Competition
Council (Note 28)
0
(1,385)
Loan interest expenses
(256)
(273)
Foreign currency exchange loss
(1)
0
Other expenses
(82)
(23)
Total finance expense
(339)
(1,681)
Total finance income and expense, net
618
(454)
12 Income Tax
Income tax expenses (benefit):
(EUR thousand)
2021
2020
Current income tax expense
0
0
Change in deferred tax
198
(478)
Total income tax expense
198
(478)
In 2021 and 2020, the Company applied a standard 15% rate in Lithuania, a 22% rate in the Kingdom of
Sweden and 0% rate in Latvia. Reconciliation of effective tax rate:
(EUR thousand)
2021
2020
Profit (loss) before tax
502
(12,896)
Income tax expense (benefit) applying the
Company’s tax rate in Lithuania
15.0%
75
15.0%
(1,934)
Non-deductible expenses
(69)
1,501
Non-taxable income
(6)
(32)
Change in deferred tax asset’s realisation al-
lowance
198
(13)
(%)
198
(3.71%)
(478)
37
AB „Panevėžio statybos trestas“
Separate Financial Statements
12 Income Tax (continued)
Deferred tax:
(EUR thousand)
2021
2020
Temporary
differences
Deferred tax
Temporary
differences
Deferred tax
Impairment of trade and other receivables
2,408
361
2,640
396
Accrued bonuses
390
59
283
42
Pension provision
228
34
241
36
Vacation reserve
23
3
18
3
Warranty provision
702
105
744
112
Inventory write-off to net realisable value
57
9
65
10
Tax loss carry forward (indefinite period)
2,638
396
3,850
577
Onerous contracts
0
0
135
20
Total deferred tax assets
967
1,196
Not recognised deferred tax assets (trade
receivable allowance)
(342)
(372)
Deferred tax asset recognised
625
824
Revaluation of land and buildings
(1,340)
(201)
(1,495)
(224)
Difference in investment property value
(1,167)
(175)
(1,020)
(153)
Deferred tax liability
(376)
(377)
Deferred tax, net
249
447
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no
longer probable that the related tax benefit will be realised. Part of deferred tax has not been recognised
due to uncertainty of deferred tax realisation.
Change in deferred income tax:
(EUR thousand)
2021
2020
Net deferred tax as at 1 January
447
(31)
Amounts recognised in other comprehensive income
0
0
Recognised in profit or loss
(198)
478
Net deferred tax as at 31 December
249
447
The Company does not recognise deferred tax in respect of taxable temporary differences associated with
investments in subsidiaries as the Company controls timing of the reversal of the temporary differences
and it is probable that the temporary differences will not reverse in the foreseeable future.
38
AB „Panevėžio statybos trestas“
Separate Financial Statements
13 Property, Plant and Equipment
(EUR thousand)
Land and
buildings
Machinery
and equip-
ment
Vehicles
Fixtures and
fittings
Construction-
in-progress
Total
Cost (revalued carrying amount of land and buildings)
Balance as at 1 January 2021
2,684
2,756
1,875
740
0
8,055
Additions
27
18
89
109
0
243
Reclassification to investment property
Reclassification
(113)
0
(113)
Asset written-off
(160)
(224)
(246)
(630)
Balance as at 31 December 2021
2,598
2,614
1,740
603
0
7,555
Balance as at 01 January 2020
3,055
2,904
1,794
727
14
8,494
Additions
0
71
168
174
141
554
Reclassification from investment property
(526)
0
0
0
0
(526)
Reclassification
155
0
0
0
(155)
0
Asset written-off
0
(219)
(87)
(161)
0
(467)
Balance as at 31 December 2020
2,684
2,756
1,875
740
0
8,055
Depreciation and impairment
Balance as at 1 January 2021
432
1,791
1,119
380
0
3,722
Depreciation for the year
270
352
246
152
0
1,020
Impairment (reversal of impairment)
(202)
(202)
Depreciation of asset written-off
(95)
(86)
(242)
0
(423)
Balance as at 31 December 2021
500
2,048
1,279
290
0
4,117
Balance as at 01 January 2020
162
1,432
900,
325
0
2,819
Depreciation for the year
280
467
287
183
0
1,217
Impairment (reversal of impairment)
(10)
0
0
0
0
(10)
Depreciation of asset written-off
0
(108)
(68)
(128)
0
(304)
Balance as at 31 December 2020
432
1,791
1,119
380
0
3,722
Residual value
As at 1 January 2021
2,252
965
756
360
0
4,333
As at 31 December 2021
2,098
566
461
313
0
3,438
As at 01 January 2020
2,893
1,472
894
402
14
5,675
39
13 Property, Plant and Equipment (continued)
(EUR thousand)
2021
2020
Depreciation recognised in:
Cost of sales
509
633
Operating expenses
279
281
Other expenses
30
293
Total depreciation
818
1,207
Land and buildings are stated at revalued amount. The last external revaluation was performed
as on 31 December 2018 based on the consultations on possible market prices of the Company’s
land and buildings provided by independent valuation company, having appropriate recognised
professional qualifications and necessary experience in valuation of property at certain location
and of certain category. The valuation was performed using the comparable price method (Level
3 in the fair value hierarchy). 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.
For the purpose of financial statements, the management considers if there are any indications
that the carrying value of land and buildings is significantly different from the market value on
an annual basis. To verify this estimate made by the management, every five years external val-
uation report by valuation expert is performed.
If the buildings and land were stated at cost model, their residual value as at 31 December 2021
would be equal to EUR 1,637 thousand (as at 31 December 2020: EUR 1,727 thousand).
As at 31 December 2021, the acquisition cost of fully depreciated but still in use assets amounted
to EUR 1,376 thousand, (as at 31 December 2020: EUR 874 thousand).
As at 31 December 2021, land and buildings with the carrying amount of EUR 2,483 thousand
were pledged to banks (as at 31 December 2020: EUR 2,617 thousand) (see Note 28).
14 Intangible Assets
(EUR thousand)
Software
Other assets
Total
Cost
Balance as at 1 January 2021
255
1
256
Additions
10
10
Asset written-off
(44)
(1)
(45)
Balance as at 31 December 2021
221
0
221
Balance as at 1 January 2020
209
4
213
Additions
83
83
Asset written-off
(37)
(3)
(40)
Balance as at 31 December 2020
255
1
256
Amortisation and impairment
Balance as at 1 January 2021
52
0
52
Amortisation charge for the year
30
30
Amortisation of asset written-off
(44)
(1)
(45)
Balance as at 31 December 2021
38
(1)
37
Balance as at 01 January 2020
57
2
59
Amortisation charge for the year
25
1
26
Amortisation of asset written-off
(30)
(3)
(33)
Balance as at 31 December 2020
52
0
52
Residual value
As at 1 January 2021
203
1
204
As at 31 December 2021
183
1
184
As at 01 January 2020
152
2
154
40
AB „Panevėžio statybos trestas“
Separate Financial Statements
14 Intangible Assets (continued)
(EUR thousand)
2021
2020
Amortisation recognised in:
Cost of sales
13
21
Administrative expenses
17
5
Total amortisation
30
26
The Company did not have any intangible assets fully amortised but still in use neither as at 31
December 2021, nor as at 31 December 2020.
15 Investment Property
(EUR thousand)
2021
2020
Balance as at 1 January
3,213
2,687
Reclassification from (to) property, plant and equipment
113
526
Change in fair value
70
0
Balance as at 31 December
3,396
3,213
In 2015, the Company acquired a 14-floor hotel Panevėžys located in Panevėžys, 16.74% of which
is rented out to third parties, and the rest of the hotel is not used. The Company has no detailed plans
regarding the use of the remaining part of the building yet; however, the building is not planned to
be further used in the Company’s activities; therefore, the whole building is classified as an invest-
ment property.
The fair value measurement has been determined by valuation of the building carried out by the
independent property appraisers UAB Ober-Haus, having appropriate professional qualification and
relevant valuation experience. The discounted cash flow method was used in the valuation (discount
rate – 9%, exit yield – 7%, occupation rate 80–90%; the same assumptions were used in 2021 and
2020). If the discount rate would increase by 1% (remaining assumptions would not be changed),
then investment property fair value would decrease approximately by EUR 100 thousand and if exit
yield would increase by 1% (remaining assumptions would not be changed) fair value of investment
property would decrease by EUR 90 thousand.
The identified fair value of the above investment property of EUR 1,420 thousand (in 2020: EUR
1,350 thousand) was attributed to Level 3 in the fair value hierarchy.
At the end of the financial year, future minimum lease payments receivable under non-cancellable
lease agreements were the following: EUR 123 thousand in less than one year, EUR 165 thousand
between one and five years (as at 31 December 2020: EUR 91 thousand in less than one year, EUR
64 thousand between one and five years). Revenue from the hotel premises rent in 2021 amounted
to EUR 102 thousand (in 2020: EUR 99 thousand) and was accounted for under other income (see
Note 10).
In addition, the Company reclassified the operational buildings, storages and other premises, leased
to both subsidiaries and third parties, to investment property. Calculated fair value of these buildings
as at 31 December 2018 amounted to EUR 1,350 thousand, which was evaluated in accordance with
the reports of independent real estate appraisers and a percentage of leased space. The assessment of
assets was carried out by UAB corporation Matininkai. Assets were evaluated using comparable and
income methods, with regard to the larger value. An average discount rate of 11.91% was applied to
income method in accordance with weighted average cost of capital. The latter investment property
was attributed to Level 3 in fair value hierarchy. The management assessed that the fair value of the
investment property did not change significantly. Change of investment property in 2020 was af-
fected by operational building rented for subsidiary UAB Aliuminio Fasadai in January 2020.
Expected rental receivables of this investment property under non-cancellable contracts as at 31 De-
cember 2021 amounted to: EUR 281 thousand in less than one year, EUR 490 thousand between one
and five years (as at 31 December 2020: EUR 142 thousand in less than one year, EUR 222 thousand
between one and five years). Revenue from lease in 2021 amounted to EUR 324 thousand (in 2020:
EUR 199 thousand) and was accounted for under other income.
41
AB „Panevėžio statybos trestas“
Separate Financial Statements
16 Investments in Subsidiaries and Joint Operations
(a) Subsidiaries
(EUR thousand)
2021
2020
Subsidiary
Ownership
interest
Cost
Owner-
ship in-
terest
Cost
UAB PST Investicijos, Verkių st. 25C, Vilnius
68.3 %
8,877
68.3,%
8,877
UAB Šeškinės Projektai, Verkių st. 25C, Vilnius
100 %
1,600
100,%
1,600
UAB Ateities Projektai, Verkių st. 25C, Vilnius
100 %
400
100,%
400
UAB Tauro Apartamentai, Verkių st. 25C-1, Vilnius
100 %
2
100,%
2
UAB Hustal, Tinklų st. 7, Panevėžys
100 %
10
100,%
10
UAB Vekada, Marijonų st. 36, Panevėžys
95.6 %
225
95.6,%
225
UAB Skydmedis, Pramonės st. 5, Panevėžys
100 %
145
100,%
145
UAB Alinita, Tinklų st. 7, Panevėžys
100 %
70
100,%
70
UAB Metalo Meistrai, Tinklų st. 7, Panevėžys
100 %
24
100,%
24
SIA PS Trests, Skultes iela 28, Skulte, Marupes nov.,
Latvia
100 %
4
100,%
4
Kingsbud Sp.z.o.o, A. Patli st. 12, 16-400 Suwalki,
Poland
100 %
1
100,%
1
OOO Teritorija, Lunačiarsko ave. 43/27, Cherepovec,
Vologda, Russian Federation
87.5 %
0
87.5,%
0
UAB Aliuminio Fasadai, Pramonės st. 5, Panevėžys
100%*
250
,100%*
200
Impairment:
UAB PST Investicijos
(5,558)
(5,565)
UAB Alinita
(70)
(70)
PS Trests SIA
(4)
(4)
Total investments
5,976
5,919
Financial information on subsidiaries can be specified as follows:
Subsidiaries of AB Panevėžio Statybos Trestas:
(EUR thousand)
Type of activity
Equity
As at
31/12/2021
Net profit
(loss) for
2021
Equity
As at
31/12/2020
Net profit
(loss) for
2020
UAB PST Investicijos
(consolidated sub-group,
see below)
Real estate develop-
ment
4,848
1,341
2,580
(2,795)
UAB Vekada
Construction: electric-
ity installation
1,013
(286)
1,299
7
UAB Skydmedis
Construction: wooden
houses
1,170
570
1,000
674
UAB Alinita
Construction: condi-
tioning equipment
(24)
163
(187)
191
UAB Metalo Meistrai
Construction
1,030
2,72
758
318
UAB Hustal
Trade
226
133
226
147
UAB Aliuminio Fasadai
Production of alumin-
ium profile systems
(71)
(173)
52
(148)
PS Trests SIA
Construction
(142)
21
(163)
12
UAB Šeškinės Projektai
Real estate develop-
ment
4,367
3,649
Kingsbud Sp.z.o.o
Trade
456
125
242
6
OOO Teritorija
Real estate develop-
ment
(1,059)
307
(1,126)
(349)
UAB Ateities Projektai
Real estate develop-
ment
199
(95)
294
(55)
UAB Tauro Apartamen-
tai
Real estate develop-
ment
3
0
3
0
42
AB „Panevėžio statybos trestas“
Separate Financial Statements
16 Investments in Subsidiaries and Joint Operations (continued)
Subsidiaries of UAB PST Investicijos:
(EUR thousand)
Ownership in-
terest
Equity
As at
31/12/2021
Net profit
(loss) for 2021
Equity
As at
31/12/2020
Net profit
(loss) for 2020
(9 264)
ZAO ISK Baltevromarket
100 %
5,301
3,924
(9,119)
(2,375)
As at 31 December 2021 and 2020, based on the management’s assessment, the investments in
UAB Alinita, PS Trests SIA and OOO Teritorija were fully impaired; therefore, 100% impair-
ment was recognised. The management determined the potential impairment indicators and as-
sessed recoverable amount for investments into UAB PST Investicijos and UAB Šeškinės Pro-
jektai as of 31 December 2021 and 2020 as described below. There were no impairment indica-
tions for other investments as at 31 December 2021 and 2020.
As at 31 December 2021, UAB PST Investicijos recoverable amount was estimated as follows:
Carrying value of UAB PST Investicijos as at 31 December 2021 (cost less
impairment recognised)
3 312
Other assets less liabilities at estimated fair value
1 545
Recoverable value of UAB PST Investicijos
4 857
Amount of shares controlled by AB Panevėžio Statybos Trestas
68.344 %
UAB PST Investicijos recoverable value attributed to AB Panevėžio Statybos
Trestas
3,320
Estimated potential impairment as at 31 December 2021.
8
Estimated impairment until 31 December 2020
(5,566)
Additional impairment accounted for under financial expenses in 2020
8
Total impairment for as of 31 December 2021
(5,558)
Estimation of the recoverable amount of investment made by UAB PST Investicijos was mainly
based on the real estate project, which was developed by ZAO ISK Baltevromarket in Kalinin-
grad. In April 2021, ZAO ISK Baltevromarket in Kaliningrad sold remaining land plots for EUR
7,000, using the exchange rate between euro and rubble prevailing at the date of the transaction.
As at 31 December 2020, UAB PST Investicijos recoverable amount was estimated as follows:
Carrying value of UAB PST Investicijos as at 31 December 2020 (cost less
impairment recognised)
3 312
Estimated fair value of the project under development by ZAO ISK
Baltevromarket
6,500
Other assets less liabilities at estimated fair value
(1,080)
Recoverable value of UAB PST Investicijos
5,420
Amount of shares controlled by AB Panevėžio Statybos Trestas
68.344,%
UAB PST Investicijos recoverable value attributed to AB Panevėžio Statybos
Trestas
3,704
Estimated potential additional impairment as at 31 December 2020
392
Estimated impairment until 31 December 2019
(5,566)
Additional impairment accounted for under financial expenses in 2019
0
Total impairment for as of 31 December 2020
(5,566)
43
AB „Panevėžio statybos trestas“
Separate Financial Statements
16 Investments in Subsidiaries and Joint Operations (continued)
Investment into UAB Šeškinės Projektai
The project of UAB Šeškinės Projektai is developing an administrative building project (the
building was handed over to the state commission in September 2020) using funds borrowed
primarily from the Company (see also Note 17). Based on the assessment of the management of
the fair value of the project under development by UAB Šeškinės Projektai, the carrying value
of the investment was not impaired. In addition to this investment, the Company had a loan re-
ceivable balance of EUR 23,662 thousand as at 31 December 2020 from this subsidiary that was
granted to finance development of the project as disclosed in Note 17. In September 2021, UAB
Šeškinės projektai signed a credit agreement with OP Corporate Bank PLC and AB Citadele for
EUR 20,000 thousand and repaid to AB Citadele part of the loan and interest in the amount of
EUR 17,934 thousand.
(b) Joint operations
In 2016, the Company concluded the agreement with limited liability company SIA ARMS
GROUP, Gobu iela 1-129, Baloži, Kekavas novads, Latvia, regarding joint operations and sev-
eral liability for newly established general partnership enterprise PST Un Arms. General partner-
ship enterprise PST Un Arms is established for certain project developed in Latvia. The devel-
opment of the project was finalised in 2021.
Under this agreement, 50% of operating expenses, assets and liabilities of PST Un Arms belong
to the Company and these amounts were included in these financial statements of the Company.
General information of PST un Arms:
(EUR thousand)
2021
2020
Total assets
19
696
Total liabilities
3
617
Equity
16
79
Revenue
(33)
846
Net result
(24)
29
44
AB „Panevėžio statybos trestas“
Separate Financial Statements
17 Long-term and Short-term Loans Granted
(EUR thousand)
Interest rate
Maturity
2021
2020
Long-term loans
UAB PST Investicijos (loan)
6-month EURIBOR+2.2 %
As at
31/12/2021
0
1,641
UAB PST Investicijos (loan)
6-month EURIBOR+1.9 %
As at 31/12/2021
0
176
UAB PST Investicijos (loan)
6-month EURIBOR+2.0 %
As at 31/12/2021
0
85
UAB PST Investicijos (loan)
6-month EURIBOR+3.0 %
As at 31/12/2021
0
36
OOO Baltlitstroj (loan)
Fixed at 9%
As at 31/12/2016
174
161
OOO Baltlitstroj loan impair-
ment
-
-
(174)
(161)
Kingsbud Sp.z.o.o
Fixed at 1.5 %
As at 31/12/2023
70
140
UAB Šeškinės Projektai
3-month EURIBOR+0.98 %,
as from 05/11/2019 3-month
EURIBOR+3.0%
As at 01/07/2026
5,728
8,662
UAB Šeškinės Projektai
6-month EURIBOR+2.0%, as
from 05/11/2019 3-month
EURIBOR+3.0%
As at 14/06/2021
0
507
OOO Teritorija
Fixed at 12%, as from 30 No-
vember 2017 – 6%
As at 31/12/2021
865
1,082
OOO Teritorija loans impair-
ment
-
-
(865)
(1,082)
UAB Ateities Projektai
6-month EURIBOR+2.0 %
As at 30/06/2022
0
363
UAB Ateities Projektai
6-month EURIBOR+3.35%
As at 31/12/2022
0
1,110
Employees
0 %
As at 25/02/2023
1
9
Employees
1.50 %
As at 25/08/2022
0
2
Short-term loans
UAB Šeškinės Projektai
3-month EURIBOR+0.98 %,
as from 05/11/2019 3-month
EURIBOR+3.0%
As at 14/06/2021
0
15,000
UAB Ateities Projektai
6-month EURIBOR+2.0 %
As at 31/12/2021
372
0
UAB Ateities Projektai
6-month EURIBOR+3.35%
As at 31/12/2021
948
0
Kingsbud Sp.z.o.o
Fixed at 1.5 %
As at 31/12/2023
70
0
Employees
0 %
As at 25/02/2023
4
0
Employees
1.50 %
As at 25/08/2022
1
0
UAB Alinita
6-month EURIBOR+2.0 %
As at 31/01/2021
0
50
Total
7,194
27,781
In 2020, the loan granted to UAB Šeškinės Projektai amounting to EUR 15,000 thousand was
classified as short-term in line with the contractual terms of the loan agreement, as the manage-
ment believed that UAB Šeškinės projektai will refinance the loan granted and repay it to the
Company on timely basis (under the contract). In 2021, a EUR 15,000 thousand loan granted was
refinanced through five-year credit agreement with OP Corporate Bank PLC and AB Citadele.
As at 31 December 2021 and 2020, the recoverability of loans was assessed under the principles
disclosed in Note 3.2, and the principal assumptions that impact the assessment are the same as
disclosed in Note 16.
All Company’s long term loans granted as at 31 December 2021 and 2020 were not past due.
45
AB „Panevėžio statybos trestas“
Separate Financial Statements
18 Inventories
(EUR thousand)
2021
2020
Raw materials and consumables
2,202
664
Projects under development
2,414
2,176
Write-down to net realisable value
(57)
(65)
Total inventories
4,559
2,775
In 2021 and 2020, change in write-down of inventory to the net realizable value was accounted
for in administrative expenses.
19 Trade Receivables and Contract Assets
(EUR thousand)
2021
2020
Trade receivables
11,341
9,520
Contract assets (accrued income based on the stage of completion)
3,082
491
Receivables from subsidiaries
567
1,656
Impairment at the beginning of the year
(157)
(68)
Write-off of doubtful trade receivables
0
Repayment of doubtful trade receivables
9
0
Additional impairment/(reversal) during the period
18
(89)
Impairment at the end of the year
(130)
(157)
Total trade receivables and contract assets, net
14,860
11,510
As at 31 December 2021, a part of trade receivables due from customers is accounted for as non-
current trade receivables at an amount of EUR 29 thousand, as at 31 December 2020 – EUR 228
thousand. These amounts are related with non-current retentions as described below.
As at 31 December 2021, trade receivables include retentions (retention – a fixed percentage of
the total contract price which shall be paid by the customer when the construction is completed
and the bank guarantee in the amount of the retained payment is provided or warranty document
of the insurance Company is provided to the customer) of EUR 3,775 thousand (as at 31 Decem-
ber 2020: EUR 4,405 thousand) relating to construction contracts in progress. For impairment of
trade receivables refer to Note 4.
Information about customers’ specific projects in progress as at 31 December 2021 and 2020:
(EUR thousand)
2021
2020
Sales by specific customers’ projects in progress, recognised in the statement of
comprehensive income during the year
39,030
30,277
Sales by specific customers’ projects in progress, recognised over the contract pe-
riod
49,685
78,553
Expenses incurred for completing specific customers’ projects in progress, recog-
nised in the statement comprehensive income during the year
36,167
30,525
Expenses incurred for completing specific customers’ projects in progress, recog-
nised in the statement comprehensive income over the contract period
46,471
77,477
Contract assets (Note 19)
3,082
491
Contract liability (deferred income) under outstanding contracts at the year-end
(Note 27)
674
1,731
Contract liability (payments from customers for purchase of inventories and etc.)
470
1,084
Provisions for onerous contracts (Note 27)
0
135
Trade receivables (under the caption of trade receivables and receivables from re-
lated parties)
6,981
7,421
As at 31 December 2021, the total contract amount attributed to performance obligations under
the construction contracts with customers that were outstanding (or partly outstanding) amounted
to EUR 78,005 thousand (as at 31 December 2020: EUR 63,887 thousand). Most of these con-
struction projects are expected to be completed and revenue recognised within one year.
46
AB „Panevėžio statybos trestas“
Separate Financial Statements
20 Other Current Assets
(EUR thousand)
2021
2020
Financial assets
Receivables from the former subsidiary OOO Baltlitstroj related to pre-
payment paid to the supplier on behalf of this subsidiary
1,240
1,240
Impairment of receivables from OOO Baltlitstroj
(1,240)
(1,240)
Loan granted to OOO Baltlitstroj
174
160
Impairment of loans granted to OOO Baltlitstroj
(174)
(160)
Financial assets, total
0
0
Non-financial assets
Excess VAT
171
13
Other Current Assets
4
0
Non-financial assets, total
175
13
Other current assets, total
175
13
Former subsidiary OOO Baltlitstroj is undergoing bankruptcy procedure. Legal proceedings are
in progress to recover trade receivables from OOO Baltlitstroj. Based on the management's esti-
mates, the recovery of amounts due is and are therefore allowance was established.
As at 31 December 2021 and 2020, the Company did not have any term deposits.
21 Cash and Cash Equivalents
(EUR thousand)
2021
2020
Cash at bank
5,793
4,640
Cash on hand
2
8
Cash and cash equivalents, total
5,795
4,648
22 Capital and Reserves
The Company’s issued capital consists of 16,350,000 ordinary shares with a nominal value of 29
euro cents each. The Company’s issued 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 issued capital in 2021 and 2020. The Company did not hold its own shares
as at 31 December 2021 and 2020. As at 31 December 2021 and 2020, the subsidiaries had not
acquired any shares of the Company.
The reserves were as follows:
(EUR thousand)
2021
2020
Revaluation reserve
1,139
1,270
Legal reserve
475
475
Total reserves
1,614
1,745
The revaluation reserve relates to the revaluation of land and buildings and is equal to the residual
value of revaluation less the related deferred tax liability.
Dynamics in revaluation reserve:
2021
2020
Revaluation reserve as at 1 January
1,270
1,403
Transfer of revaluation reserve to retained earnings
0
0
Depreciation of revaluation reserve
(133)
(133)
Revaluation reserve as at 31 December
1,137
1,270
47
AB „Panevėžio statybos trestas“
Separate Financial Statements
22 Capital and Reserves (continued)
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
issued capital. The reserve cannot be paid out in dividends. Legal reserve at 31 December 2021
and 2020 amounted to 10% of the issued capital.
23. Loans
(EUR thousand)
Interest rate
Maturity
2021
2020
OP Corporate Bank plc. Lithuania
(overdraft)
3-month
EURIBOR+1.95%
As at
14/06/2021
0
15,000
Total
0
15,000
In June 2021, the Company concluded the overdraft agreement with OP Corporate Bank plc.,
Lithuania branch, for EUR 5,000 thousand. As at 31 December 2021, the overdraft was not used.
24 Trade Payables
Payables to suppliers by geographic region:
(EUR thousand)
2021
2020
Local market (Lithuania)
11,154
7,390
Latvia
591
651
Ukraine
4
0
Poland
55
136
Germany
7
10
Total
11,811
8,187
Trade payables are non-interest bearing and normally settled on 30–90 day term.
25 Provisions
Warranty provisions are related to constructions built in 2017–2021. Based on the legislation of
the Republic of Lithuania, the Company has a warranty liability for construction works. The term
of liability varies from 5 to 10 years after delivery of construction works, i.e. an assurance type
warranty and it is not provided as the Company’s separate service. Provision for warranties is
based on estimates made from historical data of actually incurred costs of warranty repairs.
Warranty
Pension*
Warranty
Pension
Change in provisions:
2021
2021
2020
2020
Provisions at the beginning of the
year
744
241
809
164
Used and recognised in the cost of
sales and operating costs
(191)
(21)
(226)
(18)
Accrued during the year
149
8
161
95
Provisions at the end of the year
702
228
744
241
* Represents current and non-current part of provision.
48
AB „Panevėžio statybos trestas“
Separate Financial Statements
26 Right-of-Use Assets and Lease Liabilities
Dynamics of the Company’s right-of-use assets during the reporting period:
(EUR thousand)
Buildings
Cars
In total
Balance as at 1 January 2021
990
140
1,129
Additions
0
61
61
Asset written-off
(131)
0
(131)
Depreciation charge
(80)
(3)
(83)
Balance as at 31 December 2021
779
198
977
As at 31 December 2020
Acquisition cost
1,055
140
1,195
Accumulated depreciation
(65)
0
(65)
Residual value as at 31 December 2020
990
140
1,129
The Company has long-term contracts with two lessors for lease of premises and cars.
Lease liabilities and their dynamics:
(EUR thousand)
2021
2020
Residual value at the beginning of the period
1,129
0
Contracts signed under IFRS 16
135
1,176
Contracts terminated (write-off of liability and accrued interest)
0
0
Accrued interest
26
11
Lease payments (principal portion and interest)
(309)
(58)
Residual value as at 31 December
981
1,129
Non-current lease liabilities
689
878
Current lease liabilities
292
251
The Company’s payments under leases were as follows:
(EUR thousand)
2021
2020
Minimum payments
Within first year
287
265
From two to five years
726
911
More than five years
0
0
In total
1,013
1,176
Future finance costs
Within first year
(16)
(17)
From two to five years
(16)
(30)
More than five years
0
0
In total
(32)
(47)
Residual value
981
1 129
49
AB „Panevėžio statybos trestas“
Separate Financial Statements
27 Contract and Other Liabilities
(EUR thousand)
2021
2020
Non-financial liabilities
Contract liability (deferred income) under contracts in progress (Note 19)
674
1,731
Contract liability (payments from customers for purchase of inventories and
etc.) (Note 19)
470
1,084
Liabilities related to the fine imposed by the Competition Council (Note 28)
8,542
9,808
Payable VAT
0
102
Accrued vacation reserve
1,339
1,030
Salaries and related taxes payable
1,096
892
Provisions for onerous contracts
0
135
Other liabilities
106
90
Bonus accrual for employees
390
281
Other liabilities, total
12,617
15,153
28 Contingent Liabilities
Guarantees
As of 31 December 2021, the guarantees in the amount of EUR 8,013 thousand to third parties,
related to obligations under the construction contracts of the Company, were issued by banks on
behalf of the Company (as of 31 December 2020: EUR 7,835 thousand). The guarantees expire
between 17 January 2022 to 2 March 2025. In addition, the Company has guarantees issued by
insurance companies for the amount of EUR 13,392 thousand, which are also related to liabilities
under the construction contracts (in 2020: EUR 14,064 thousand). The guarantees expire between
1 January 2022 to 17 December 2024. No additional liabilities are recorded in respect of these
guarantees in the financial statements other than estimated warranty reserve (Note 25).
Property with a carrying amount of EUR 2,475 thousand as at 31 December 2021 (EUR 2,483
thousand as at 31 December 2020) has been pledged to banks for the guarantee limit issued and
guarantees issued by bank. The guarantee limit amounts to EUR 15,000 thousand, the used
amount as at 31 December 2021 is EUR 8,013 thousand. The guarantee limit agreement is effec-
tive until 30 June 2023 with the possibility to issue guarantees until 30 June 2023 that would be
valid for 3 years following their date of issue. Guarantees are valid for 5 years following their
date of issue if the amount does not exceed EUR 1,500 thousand. As at 31 December 2020, the
guarantee limit amount was EUR 15,000 thousand, the used amount was EUR 7,835 thousand.
Legal contingencies
The Company is involved in below described material legal cases:
(1) The Competition Council has made a decision as of 20 December 2017 „Regarding Irdaiva
UAB and PST AB actions in joint participation in public tenders of buildings renovation and
modernization works meeting the requirements of 5th article of the Competition law of the Re-
public of Lithuania”. Based on the Competition Council decision, joint activity agreement signed
between the Company and UAB Irdaiva for providing joint offers in 24 public tenders organized
by UAB Vilniaus Vystymo Kompanija intended to limit competition and violated the require-
ments of Article 5.1 of the Competition Law of Republic of Lithuania. A fine was set to the
Company in total amount of EUR 8,514 thousand. The Company disputed the decision of the
Competition Council regarding the fine imposed and based on the assessment of the management
of all know facts and circumstances when preparing the Company’s annual financial statements
for the year ended 31 December 2019, the management believed that it is more likely than not
that the Company will receive a positive decision and did not account for any provision related
to the decision made by the Competition Council as at 31 December 2019.
On 3 June 2020, the Supreme Administrative Court of Lithuania announced a non-appealable
ruling on the dispute of the Company against the decision of the Competition Council. As a
consequence, the Company recognised in the financial statements for the year ended 31 Decem-
ber 2020 the fine amounting to EUR 8,514 thousand (Note 8) and related interest charge amount-
ing to EUR 1,385 thousand (Note 11), and the bailiff enforcement fee amounting to EUR 396
thousand (Note 8).
50
AB „Panevėžio statybos trestas“
Separate Financial Statements
28 Contingent liabilities (continued)
The Company recognised the full amounts of fine, interest and enforcement fees in its financial
statements for the year ended 31 December 2020, however the management took additional legal
actions to reduce the interest and the enforcement fee amounts, as further described below. The
final outcome of the dispute over the size of interest expenses cannot be reasonably determined
at this stage.
The Tax Authority informed the participants involved in the enforcement process by the letter
No 21915 (individual administrative act) of 12 August 2020 on the decision to set the payment
of fines and interest imposed on the Company in equal parts for a period of eight years. The Tax
Authority also stated that the bailiff's enforcement fees should not be included in the payment
schedule. A draft settlement agreement for implementation in the enforcement process is cur-
rently being submitted to the Tax Authority for approval. The Tax Authority informed the Com-
pany that it had applied to the European Commission for notification of state aid. The European
Commission’s decision is expected in the spring of this year. Upon receipt of a positive decision
of the European Commission, the Company will have to agree the final terms of the settlement
agreement with the State Tax Authority, and the settlement agreement signed by the parties will
have to be approved by the court. Meanwhile the Company fulfils its obligations and pays the
fine imposed by the Competition Council in line with the 8-year fine payment schedule, although
the Tax Authority has left a right to change the schedule if changes in circumstances appear. Also
the Company’s assets with the residual value of EUR 3,057 thousand as at 31 December 2021
(EUR 3,578 thousand as at 31 December 2020) was arrested as a guarantee for fulfilment of the
obligations.
Additionally, one civil cases is currently pending in the courts regarding interest charge and en-
forcement fees, as described further.
In relation to the claim regarding interests in the amount of EUR 1,385 thousand, the Company
believes that the amount of the calculated interest and time limits for its calculation had to be
specified in the enforcement order, i.e. the decision of the Competition Council of 9 June 2020.
In addition, statutory interest must be calculated in accordance with Article 39(2) of the Compe-
tition Law of Republic of Lithuania, i.e. interest must be accrued until the fine is paid to the state
budget and no longer than 180 days. In this case, interest shall amount to EUR 252 thousand.
The bailiff's order regarding the enforcement fees in amount of EUR 396 thousand is also dis-
puted in the court. In the Company’s view, the enforcement fees are clearly excessive. In the
disputes concerning interest and enforcement fees, the court has granted interim measures, i. e.
the recovery of interest and enforcement fees has been suspended.
The Chamber of Panevėžys of the Panevėžys District Court investigated the appeal of AB
PANEVĖŽIO STATYBOS TRESTAS in a civil case No 2YT-8648-452/2020 [2YT-230-
452/2021] regarding the bailiff’s orders by which the interest payable and the enforcement fees
were calculated under the Decision No 2S-11(2017) of 20 December 2017 of the Competition
Council of the Republic of Lithuania. The Chamber of Panevėžys of the Panevėžys District Court
dismissed the appeal by an order of 13/01/2021. This order was appealed by bringing a separate
appeal on 20 January 2021. By order of 20 April 2021, the Panevėžys Regional Court upheld the
decision of the Chamber of Panevėžys of the Panevėžys District Court unchanged. This decision
was appealed in cassation. The hearing will be held at the Supreme Court of Lithuania on 14
April 2022.
51
AB „Panevėžio statybos trestas“
Separate Financial Statements
29 Related-Party Transactions
Related parties are defined as shareholders, employees, members of the Management Board, their
close relatives and companies that directly, or indirectly through one or more intermediaries,
control, or are controlled by, or are under common control with the Company, provided the listed
relationship empowers one of the parties to exercise the control or significant influence over the
other party in making financial and operating decisions.
The Company had sales and purchase transactions during 2020–2021 with subsidiaries, the con-
trolling company AB Panevėžio Keliai and with its subsidiaries (reported under other caption
“Other related companies” below). Transactions with related parties during 2021 and 2020 were
as follows:
(EUR thousand)
Type of transaction
2021
2020
Sales:
Companies under control
UAB Šeškinės Projektai
Interest and services
988
4 988
UAB Vekada
Goods and services
10
32
UAB Alinita
Goods and services
126
85
UAB Metalo Meistrai
Goods and services
336
377
OOO Teritorija
Interest
0
31
UAB PST Investicijos
Interest and services
17
38
UAB Skydmedis
Goods and services
46
44
UAB Ateities Projektai
Services
167
39
UAB Aliuminio Fasadai
Services
783
691
Other: Hustal-3, Trest-2, Kingsbud-2
7
17
Controlling company
AB Panevėžio Keliai
Goods and services
54
801
Other related companies
Goods and services
14
0
(EUR thousand)
Type of transaction
2021
2020
Purchases:
Companies under control
UAB Alinita
Goods and services
2,000
2,033
Kingsbud Sp.z.o.o
Goods and services
277
811
UAB Vekada
Goods and services
134
1 354
UAB Metalo Meistrai
Goods and services
37
0
PS Trests SIA
Services
445
153
UAB Aliuminio Fasadai
Goods and services
906
552
UAB Šeškinės Projektai
Goods and services
288
212
Other: Skyd.-2, Hustal-16, PSTI-6
1
Controlling company
AB Panevėžio Keliai
Goods and services
884
206
Other related companies
UAB Panevėžio Ryšių Statyba
Goods and services
0
3
UAB Betono Apsaugos Sistemos
Goods and services
10
20
Other: 20+3+19+18
Goods and services
60
44
52
AB „Panevėžio statybos trestas“
Separate Financial Statements
29 Related Party Transactions (continued)
(EUR thousand)
2021
2020
Receivables
Companies under control
UAB Šeškinės Projektai
515
975
UAB Metalo Meistrai
80
276
UAB Aliuminio Fasadai
390
338
Other : Skyd.-16, AP-2, Kingsb-62
80
109
Joint operations (PST UN Arms)
0
597
Other related companies
0
66
Payables:
Companies under control
UAB Vekada
105
448
Kingsbud Sp.z.o.o
18
35
PS Trests SIA
84
69
Other: Skyd.-1, ŠP-44, Alinita-21
66
90
Controlling company
AB Panevėžio Keliai
210
74
Other related companies
Other
1
23
Loans receivable incl. accrued interests from companies under control:
UAB PST Investicijos
0
1,938
OOO Teritorija (gross value)
865
1,082
Kingsbud Sp.z.o.o
140
140
UAB Šeškinės Projektai
5,728
24,169
UAB Alinita
0
50
UAB Ateities Projektai
1,320
1,473
Payment terms for receivables and payables with the related parties are up to 30–90 days, except
for the loans granted, which are disclosed in Note 17.
Balances at the year-end have no collaterals and all transactions are carried out in cash unless
otherwise agreed. There have been no guarantees provided or received for any related party re-
ceivable or payable and no allowance has been made for the receivables from related parties by
the Company except for receivables from OOO Teritorija and OOO Baltlitstroj as disclosed in
Notes 17 and 20. The balances outstanding with related parties of the Company were not overdue
as at 31 December 2021 and 2020.
Management remuneration
Wages, salaries and social insurance contributions, calculated to the Company’s directors and
the Board members for the year 2021, amounted to EUR 1,327 thousand (in 2020: EUR 852
thousand). For Company’s directors and the Board members there were no guarantees issued,
any other paid or accrued amounts or assets transferred, except board remuneration paid in 2020.
30 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 principal (or the most advantageous)
market independent irrespective of whether this price is directly observable or established using
valuation techniques.
53
AB „Panevėžio statybos trestas“
Separate Financial Statements
30 Fair Value of Financial Instruments (continued)
As at 31 December 2021
(EUR thousand)
Carrying
amount
Fair value
In total
Level 1
Level 2
Level 3
Financial assets
Trade receivables
15,537
15,537
Loans granted
7,194
7,194
Cash and cash equivalents
5,795
5,795
Financial assets, total
28,526
5,795
22,731
Financial liabilities
Loans (overdraft)
0
0
Trade payables
(11,811)
(11,811)
Lease liabilities
(981)
(981)
Liabilities related to the fine imposed by
the Competition Council
(8,542)
(8,542)
Total financial liabilities
(21,334)
(21,334)
As at 31 December 2020
(EUR thousand)
Carrying
amount
Fair value
In total
Level 1
Level 2
Level 3
Financial assets
Trade receivables
11,510
-
-
11,510
Loans granted
27,781
-
-
27,781
Cash and cash equivalents
4,648
4,648
-
-
Financial assets, total
43,939
4,648
-
39,291
Financial liabilities
Loans (overdraft)
(15,000)
-
-
(15,000)
Trade payables
(8,187)
-
-
(8,187)
Lease liabilities
(1,129)
(1,129)
Liabilities related to the fine imposed by
the Competition Council
(9,808)
(9,808)
Total financial liabilities
(34,124)
-
-
(34,124)
There were no transfers between levels of the fair value hierarchy in 2021 and 2020 at the Com-
pany.
The following methods and assumptions are used by the Company to estimate the fair value of
the financial instruments not carried at fair value:
Cash
Cash represents cash at banks and on hand stated at value equal to the fair value.
Receivables
The fair value of trade and other receivables and loans granted is estimated at the present value
of future cash flows, discounted at the market rate of interest at the reporting date. Fair value of
short-term trade and other receivables 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 dis-
counting is immaterial.
The fair value of non-current trade receivables was estimated to approximate carrying value as
discounting effect was determined to be not material.
The fair value of loans granted was estimated to approximate carrying value as majority of the
loans are subject of market level variable interest.
54
AB „Panevėžio statybos trestas“
Separate Financial Statements
30 Fair Value of Financial Instruments (continued)
Financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the reporting
date. Fair value of current trade payables 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. The fair value of borrowings (overdraft) was estimated to approximate
carrying value as it is subject to variable interest. The carrying value of lease liabilities approxi-
mates the fair value as it is a subject to interest. The fair value of fine under the decision of the
Competition Council is considered its carrying value, since it is not subject to interest.
31 Earnings and Dividends Per Share
(EUR)
2021
2020
Net result for the year
303,350
(12,418,000)
Dividends declared
0
490,000
Average number of shares
16,350,000
16,350,000
Basic and diluted earnings/(loss) per share
0.02
(0.76)
Dividends declared per share
0
0.03
32 Events after the End of the Reporting Period
The year 2022 will be another difficult year for the economy. Increased geopolitical tensions in
the region and in the European Union (EU) following Russia’s attack on Ukraine undoubtedly
affect the construction and real estate sectors. Today it is very difficult to predict the impact of
the situation on the construction sector. Ukraine is a significant supplier of raw materials, there-
fore the war in Ukraine has a significant impact on the material supply chain and price increases.
Having assessed the risk, the Company ceased ordering raw materials from third countries, in-
cluding Ukraine, Belarus and Russia, however, a significant part of reinforcing bars, crude steel,
wood and silicon blocks were imported from Ukraine, Belarus and Russia. To ensure timely
supply of materials, the Company is looking for alternative sources of supply and reorganizing
the supply chain to import raw materials from other countries. The construction sector is also
heavily influenced by the increased energy costs.
It is likely that disturbances in the financial market, rising prices of raw materials and energy,
will encourage customers to review or hold back investments with some projects being suspended
or delayed. This may weaken the construction output.
The Company thoroughly monitors and evaluates the ongoing processes in the market in order
to ensure a seamless continuation of activities.
AB Panevėžio Statybos Trestas will look for solutions to cushion the negative impact of war on
the Company’s activities and will seek to ensure the optimisation of costs of implemented pro-
jects, ongoing investments and routine activities.
Managing director Egidijus Urbonas 04/04/2022
Chief Accountant Danguolė Širvinskienė 04/04/2022
56
Company’s and Consolidated Annual Report,
Governance Report,
Consolidated Report of Social Responsibility,
and Remuneration Report
of Panevezio statybos trestas AB
for 2021
57
I. Company’s and Consolidated Annual Report
1. Accounting period covered by the Annual Report
This Company’s and Consolidated Annual Report for the year 2021 covers the period from 1 January
2021 until 31 December 2021.
2. References and additional clarifications on the data included in the Annual Report
The auditor of the company is Grant Thornton Baltic UAB.
In this report, Panevezio statybos trestas AB can also be referred to as ‘the Company’, and the
Company together with its subsidiary companies can be referred to as ‘the Group’.
3. The main data about the Company (the issuer)
Name of issuer
Public limited liability company
Panevezio statybos trestas
Authorised capital
4,741,500 Euros
Address of registered office
P. Puzino Str. 1, LT-35173 Panevezio, Lithuania
Telephone
(+370 45) 505 503
Fax
(+370 45) 505 520
Legal-organisational form
Public limited liability company
Date and place of registration
30 October 1993, Panevezys City Board
Registration No.
AB 9376
Register code
147732969
VAT code
LT477329610
LEI code
529900O0VPCGEWIDCX35
Administrator of Legal Entity Register
State Enterprise Centre of Registers
E-mail
pst@pst.lt
Website
www.pst.lt
4. Nature of the main activities of the issuer
The main area of activities of the Company and its subsidiaries (the Group) is design 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 listed
activities, the Company is engaged in rent of premises and machinery.
58
5. The companies included in the Group of Panevezio statybos trestas AB
As of 31 December 2021, the Group of Panevezio statybos trestas AB included the following
companies:
Subsidiary
company
Registration date,
register
administrator
Company
code
Registered
address
Telephone, fax,
e-mail, website
Portion of
shares held
(per cents)
Skydmedis
UAB
17 June 1999
State Enterprise
Centre of Registers
148284718
Pramones Str. 5,
Panevezys
Tel. (+370 45) 467626
Fax (+370 45) 460259
info@skydmedis.lt
www.skydmedis.lt
100
Metalo
meistrai UAB
16 June 1999
State Enterprise
Centre of Registers
148284860
Tinklu Str. 7,
Panevezys
Tel. (+370 45) 461677
Fax (+370 45) 585087
info@metalomeistrai.lt
www.metalomeistrai.lt
100
Vekada UAB
16 May 1994
State Enterprise
Centre of Registers
147815824
Marijonu Str. 36,
Panevezys
Tel. (+370 45) 461311
Fax (+370 45) 461311
info@vekada.lt
www.vekada.lt
95.6
Alinita UAB
8 December 1997
State Enterprise
Centre of Registers
141619046
Tinklu Str. 7,
Panevezys
Tel. (+370 45) 467630
Fax (+370 45) 467630
info@alinita.lt
www.alinita.lt
100
Kingsbud Sp.z
o.o.
11 August 2010
District Court in
Bialystok,
XII Economic
Department of
National Court
200380717
A. Patli Str. 12,
16-400 Suwalki,
Poland
Tel. (+48 875) 655 021
Fax (+48 875) 655 021
biuro@kingsbud.pl
www.kingsbud.lt
100
PS Trests SIA
22 May 2000
Centre of Registers,
Republic of Latvia
40003495365
Skultes Str. 28,
Skulte,
Marupes Parish,
Riga Region,
Latvia
Tel. +371 29525066
100
Teritorija
OOO
3 June 2013
Kaliningrad Obl.
Federal Tax Service
Inspection No. 12
3528202650
Lunacharskogo
Drive 43-27,
Cherepovets,
Bologda Obl.,
Russian
Federation
Tel. +7 9097772202
Fax +7 9217234709
baltevromarketao@
mail.ru
maslena11@mail.ru
87.5
Seskines
projektai UAB
9 November 2010
State Enterprise
Centre of Registers
302561768
Ukmerges Str. 219,
Vilnius
Tel. (+370 5) 2102130
info@psti.lt
gbujokas@psti.lt
100
Ateities
projektai UAB
25 April 2006
State Enterprise
Centre of Registers
300560621
Ukmerges Str. 219,
Vilnius
Tel. (+370 5) 2102130
Fax (+370 5) 2102131
info@psti.lt
gdieckuviene@psti.lt
100
PST
investicijos
UAB
23 December 1998
State Enterprise
Centre of Registers
124665689
Ukmerges Str. 219,
Vilnius
Tel. (+370 5) 2102130
info@psti.lt
gbujokas@psti.lt
68
Tauro
apartamentai
UAB
23 October 2018
State Enterprise
Centre of Registers
304937621
Ukmerges Str. 219,
Vilnius
Tel.(+370 610) 09222
gbujokas@psti.lt
100
59
Subsidiary
company
Registration date,
register
administrator
Company
code
Registered
address
Telephone, fax,
e-mail, website
Portion of
shares held
(per cents)
Hustal UAB
11 December 2018
State Enterprise
Centre of Registers
304968047
Tinklu Str. 7,
Panevezys
Tel.(+370 45) 461677
Fax (+370 45) 585087
andrius.maciekus@hus
tal.eu
www.hustal.eu
100
Aliuminio
fasadai UAB
2 January 2020
State Enterprise
Centre of Registers
305412441
Pramones Str. 5,
Panevezys
Tel. +370 686 32727
info@alfasadai.lt
www.alfasadai.lt
100
Subsidiary companies of PST investicijos UAB:
ISK
Baltevromarket
AO
13 July 2001
Independent
Registration
Company AB –
Administrator of
Shareholders’
Register
3906214631
Rostovskaja Str.
5-7,
Kaliningrad,
Kaliningrad Obl.,
Russian Federation
Tel.+79097772202
baltevromarketao@
mail.ru
100
6. Nature of principle activities of the companies included in the Group
Skydmedis UAB – production, construction and outfit of pre-fabricated timber panel houses. Panel
houses are the main product of the company. Products are successfully exported to Norway, Sweden,
Switzerland, Iceland and other countries.
Metalo meistrai UAB – design and fabrication of steel structures for construction purposes. The
company also supplies steel structures for other industries where steel items are required.
Vekada UAB – installation of electrical systems. Alongside with the usual electrical engineering
activities, works in the low current fields are carried out: video surveillance systems, security and
fire alarm systems, utility system control.
Alinita UAB – installation of heating, ventilation and air-conditioning systems in buildings, indoor
water supply, waste water and fire-fighting systems, design, start-up and commissioning of indoor
utility systems.
Kingsbud Sp.z o.o. – wholesale of construction materials. Kingsbud Sp.z o.o. has a branch
established in Lithuania, which focuses on wholesale of stoneware and glazed tiles for indoor and
outdoor application.
PS Trests SIA – construction activities. The company was established for searching of new markets
and carrying out construction activities in Latvia.
Teritorija OOO – real estate development.
Seskines projektai UAB – real estate preparation and sale.
Ateities projektai UAB – real estate preparation and sale.
PST investicijos UAB – real estate preparation and sale. PST investicijos UAB has the subsidiary
company, Baltevromarket ZAO ISK, established for development of real estate projects in the
Kaliningrad Oblast, Russian Federation.
Tauro apartamentai UAB – development of real estate projects.
Hustal UAB – sale, erection and design of steel structures. Activity and sale of the company are
focused on the Scandinavian market.
Aliuminio fasadai UAB – production of aluminium profile systems, aluminium framed windows and
doors.
60
7. Contracts with the intermediary of public trading in securities
In 2013, the Company signed the contract with the Financial Brokerage Company Finasta AB for
accounting of securities and provision of services related to securities accounting. On 21 December
2015, the Financial Brokerage Company Finasta AB had been rearranged by way of merge with
Siauliu bankas AB, which took over all assets, rights and liabilities of the Financial Brokerage
Company Finasta AB from the mentioned date.
8. Data on trading in securities of the issuer in regulated markets
The ordinary registered shares of Panevezio statybos trestas AB have been on the Official Trading
List of Nasdaq Vilnius AB since 13 July 2006 (company symbol PTR1L).
Share type
Number of shares,
pcs.
Par value,
Euros
Total par value,
Euros
Emission code
ISIN
Ordinary registered shares
(ORS)
16,350,000
0.29
4,741,500
LT0000101446
Comparison of PTR1L Panevezio statybos trestas and OMX Vilnius Benchmark GI indexes in 2021
Company share price variation at Stock Exchange Market Nasdaq Vilnius for the period 2017
through 2021 (Euros)
61
Company share price variation at Stock Exchange Market Nasdaq Vilnius in 2021 (Euros)
Table 1. Information on the Company share price at Stock Exchange Market Nasdaq Vilnius for the
period 2017 through 2021:
Indicator
2021
2020
2019
2018
2017
Highest price, Euros
0.838
0.85
0.878
0.99
1.34
Lowest price, Euros
0.53
0.52
0.71
0.75
0.85
Average price, Euros
0.677
0.629
0,78
0,881
1,078
Share price as of the end
of reporting period, Euros
0.66
0.57
0.75
0.752
0.916
Traded volume
2,935,832
19,80,134
987
1,596,044
2,854,251
Turnover, mln. Euros
1.99
1.25
0.77
1.41
3.08
Capitalisation, mln. Euros
10.79
9.32
12.26
12.3
14.98
9. Fair review of position, performance and development of the Company and the Group,
description of the principal risks and uncertainties the company faces
Key events of the reporting period
3 February 2021. Panevezio statybos trestas AB has signed the contract for construction of the
building for the new shopping centre Senukai in Vilnius. The project value exceeds 7 mln. Euros
(incl. VAT).
3 February 2021. Panevezio statybos trestas AB received a notice from the European Court of
Human Rights (ECHR) through the authorised person confirming that the application by PST had
been registered for preliminary proceedings.
PST exercised the right of the legal person to turn to the European Court of Human Rights for
protection of business interests in application of the Convention for the Protection of Human Rights
and Fundamental Freedoms. PST went to the ECHR for possible infringement of Article 6 of the
Convention and Paragraph 1 Article 1 Protocol 1 to the Convention, which had been possibly
infringed by the Lithuanian Administrative Courts in hearing the appeals by PST on vacation of the
judgement No. 2S-11(2017) dated 20 December 2017 by the Competition Council.
18 February 2021. The company participates in the litigation over the bailiff’s actions in the case
on the penalty imposed by the Competition Council. On 17 February 2021, the Panevezys Regional
Court made the ruling upholding the judgment by the court of first instance, which had cancelled the
arrangement by the bailiff on scheduling payment of the penalty imposed by the Competition
Council, in particular on the instalments for July and August 2020.
62
23 February 2021. Panevezio statybos trestas AB received the ruling by the European Court of
Human Rights (ECHR) rejecting the application of the Company regarding violations of the
Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention).
23 February 2021. After winning the public tender Panevezio statybos trestas AB (PST) was
awarded and signed the contract with the Vilnius City Municipality for construction of the Lazdynai
Swimming Pool. The total value of the contract is 21.8 mln. Euros (incl. VAT). The construction
activities of the swimming pool will be resumed in the nearest future and completed by the beginning
of 2022.
9 April 2021. The Extraordinary General Meeting of Shareholders of Panevezio statybos trestas AB
took place where the Board of the Company (in corpore) was withdrawn before the end of the term
of office and the new Board was elected.
20 April 2021. The Panevezys Regional Court by the ruling dated 20 April 2021 in the case of
payment of the interest calculated by the Competition Council of the Republic of Lithuania for the
whole period of judicial proceedings when the Company litigated the fine imposed on the Company
by the Competition Council has left the court ruling by the Panevezys Chamber of the Panevezys
District Court unaffected.
29 April 2021. The Ordinary General Meeting of Shareholders of Panevezio statybos trestas AB took
place. The Ordinary General Meeting of Shareholders did not come to the decision to pay dividends.
9 July 2021. Panevezio statybos trestas AB has concluded a transaction with the real estate developer
Galio Group for construction of the residential estate reVINGIS at Gelezinio Vilko Str. 2, Vilnius.
The total value of the contract exceeds 16 mln. Euros (incl. VAT). The construction activities of the
real estate are planned to be completed in the second half of 2023.
13 July 2021. Panevezio statybos trestas AB has brought an action before the Panevezys Regional
Court in respect with the decision by the state enterprise Ignalina Nuclear Power Plant to reject the
bid by Panevezio statybos trestas AB in the public procurement arranged by means of an
international tender for Procurement of Works for Construction of INPP Near Surface Repository
for Low and Intermediate-Level Short-Lived Radioactive Waste (Construction Stages I/A, II/A) and
Design, Construction and Connection of External Rainwater Drainage Networks to INPP
Infrastructure.
29 July 2021. The Extraordinary General Meeting of Shareholders of Panevezio statybos trestas AB
took place where Grant Thornton Baltic UAB was selected as the auditor of the company.
26 November 2021. The Court of Appeal of Lithuania had investigated the complaint by Panevezio
statybos trestas AB about the decision by the state enterprise Ignalina Nuclear Power Plant to reject
the submitted bid in the tender for Procurement of Works for Construction of INPP Near Surface
Repository for Low and Intermediate-Level Short-Lived Radioactive Waste (Construction Stages
I/A, II/A) and Design, Construction and Connection of External Rainwater Drainage Networks to
INPP Infrastructure. The court upheld the decision to reject the bid by Panevezio statybos trestas AB
but the reasons of the state enterprise Ignalina Nuclear Power Plant for the decision to reject the bid
due to the instalment payments of the fine imposed by the Competition Council were found
unjustified. The company is considering the court judgement and intends to appeal it to the Supreme
Court of Lithuania.
In 2021, the Company successfully completed several large construction projects, such as
Reconstruction of Former Hospital Building Complex in Boksto Street in Vilnius, Construction of
Production and Storage Building for Elmoris in Vilnius, Fourth Stage of Modernization at Panevezys
Bakery of Vilniaus duona UAB, Construction of Multifunctional Sports Centre in Klaipeda, Senukai
Shopping Centre at V. Pociuno Str. 10, Vilnius. Moreover, several apartment building renovation
projects were completed at Debesijos Str. 6 and 8, Architektu Str. 196 in Vilnius.
In addition to that, activities are continued in such projects as Reconstruction of Wroblewski Library
of Academy of Sciences, Reconstruction of Kedainiai Waste Water Treatment Plant, New Head
Office of Lietuvos draudimas at J. Basanaviciaus Str. 10, Vilnius. Construction of Laboratory Block
for Faculties of Electronics, Mechanics and Transport Engineering at Vilnius Gediminas Technical
University at Plytines Str. 25, Vilnius is also in progress and construction of Educational Block for
Faculties of Mechanics, Electronics and Transport Engineering of the University has been started.
63
More than once the Company has been awarded for successfully implemented projects, their
complexity, high quality and organization of complicated activities. The awards of the Lithuanian
Product of the Year 2020, as every year, are arranged by the Lithuanian Confederation of
Industrialists. The project of the Kaunas CHP Plant implemented by Panevezio statybos trestas AB
was awarded the gold medal. A high-efficiency waste-to-energy cogeneration plant can produce and
deliver about 40 per cents of heat demand of Kaunas.
In 2021, the following branches continued their operation in the structure of the Company: Gerbusta,
focusing on construction of utility networks and landscaping, Pastatu apdaila, carrying out indoor
and outdoor finishing works, Konstrukcija, where production capacities were concentrated, Vilnius
branch Genranga, performing general contracting activities and project management in the Vilnius
Region, and Klaipstata, performing general contracting activities and project management in the
Klaipeda Region.
The Company has permanent establishments in the Republic of Latvia and Kingdom of Sweden.
In 2021, the companies of the Group successfully continued their activity both inside and outside
Lithuania. The main direction of Metalo meistrai UAB is fabrication of steel structures and elements
for steel structures for construction purposes. In 2021 Hustal UAB continued their main activity –
wholesale trade in steel structures. The main direction for selling the steel structures is the
Scandinavian countries. Skydmedis UAB, which is producing pre-fabricated timber panel houses,
sells nearly all of their products in the foreign market. 94 per cents of the company’s revenue were
for the products sold in the Scandinavian countries. Vekada UAB, Alinita UAB‚ which specialize in
installation of heating, ventilation and conditioning systems in the buildings, and in installation of
electric systems, renewable energy and low current fields, implemented the projects in Lithuania.
The most advanced aluminium profile systems, aluminium windows and doors, façades are produced
at Aliuminio fasadai UAB.
PST investicijos UAB, Ateities projektai UAB and Seskines projektai UAB are the real estate
development companies. Ateities projektai UAB develops the project of residential houses in
Kunigiskes.
PS Trests SIA operating in Latvia is continuing the started construction and is looking for new orders.
In 2021, the wholesale of building materials is further developed. Kingsbud Sp.z o.o, the company
operating in Poland, is engaged in this.
Key events after the reporting period (in the year 2022)
5 January 2022. The company had appealed in cassation against the mentioned court judgement to
the Supreme Court of Lithuania. On 5 January 2022, the Supreme Court of Lithuania upheld the
judgement of 17 February 2021 by the Panevezys Regional Court.
7 January 2022. On 6 January 2022 the Supreme Court of Lithuania delivered the judgement on the
decision by the state enterprise Ignalina Nuclear Power Plant to reject the submitted bid in the tender
for Procurement of Works for Construction of INPP Near Surface Repository for Low and
Intermediate-Level Short-Lived Radioactive Waste (Construction Stages I/A, II/A) and Design,
Construction and Connection of External Rainwater Drainage Networks to INPP Infrastructure
thereby dismissing the cassation appeal of Panevezio statybos trestas AB and hearing the case in
cassation proceedings. The court motivated their decision mainly by the fact that the case is of little
significance to the practice of the Lithuanian courts and public procurement. The court judgement
and the outcome of the dispute will not affect the future operations of the company as its possibilities
for participation in public procurement are no longer restricted.
8 March 2022. Panevezio statybos trestas AB notified that it ceases to operate its companies located
in the region of the Russian Federation:
- Operation of Baltevromarket OOO, with 100 per cents of the authorized capital hold by PST
Investicijos UAB, is ceased though there have been no assets owned by the company since
mid of 2021;
- Territorija OOO has been out of active operation for the period of three years;
- Baltlitstroj OOO is declared bankrupt and is in the process of the relevant proceedings.
For several years now, taking into account the risks involved, Panevezio statybos trestas AB has
been putting tendentious efforts to withdraw from the market of the Russian Federation.
64
Risk factors related to the Company’s activities:
In their operation, both the Company and the Group face various types of risks, such as legal
regulation, severe competition, shortage of qualified labour, cyclical nature of economy, consistency
of orders, volatile material prices in the global market, macroeconomic factors, damping. However,
only a few of them may have significant impact on the performance results of the Group and the
Company. The main factors that create business risk for the Company and the Group are competition
in the construction market and changes in the demand for construction services. The demand for
construction services also depends heavily on the volume of investments and financing received from
the EU structural funds. Increase and variation of material and service prices make the process of the
project budgeting and possibility to complete the already started projects based on the planned costs
more difficult. This results in extra risk for performance of fixed price construction contracts and
reduces profitability of projects. Furthermore, activity of the Company and the Group is influenced
by the economic situation (economic cycles) in Lithuania and the countries where the Group
companies operate. Although there is still some uncertainty about the trends in global economic
development as well as regional and global crisis in future.
Information on the types of financial risks and risk management is provided in the Notes to the
Separate Financial Statements (Note 4) and Consolidated Financial Statements (Note 4). Legal
uncertainties are provided in the Notes to the Separate Financial Statements (Note 28) and
Consolidated Financial Statements (Note 27).
COVID-19 impact:
In 2021, the construction sector was still among the ones most affected. The Company and the Group
of Panevezio statybos trestas AB looked for solutions and recourses for the problems, operational
challenges and risks that emerged during the COVID-19 pandemic, they were able to adapt to the
radically changed operating conditions and the changed behaviour of market participants. Instead of
postponing decisions to quieter times after the quarantine, the Company and the Group made every
effort to maintain a normal pace of operations. The management responsibly monitors and assesses
the current situation (especially with regard to customer payments, shortages of supplies, order
fulfilment) and responds without delay as well as makes appropriate decisions to ensure business
continuity.
10. Analysis of financial and non-financial performance, information related to
environmental and employee matters
He global keyword of 2021 was ‘the pandemic’. COVID-19 and the measures taken to limit its spread
have affected the whole country, all sectors of the economy and all social activities. Under the
influence of COVID-19, the year was very difficult and ununiform in terms of operations and
economic growth of the Company and the Group.
Over the twelve months of 2021, the turnover of Panevezio statybos trestas AB amounted to 65.721
mln. Euros, whereas the revenue of the Company for the twelve months of 2020 amounted to 59.712
mln. Euros. Although the Company experienced the difficulties caused by the pandemic, the revenue
of the Company increased by 10 per cents compared to that in 2020. During 2021, the Company
managed to close the year with the minimum profit in the amount of 0.304 million Euros, whereas
in 2020 the loss amounted to 12.418 mln. Euros.
Over the same period, the total consolidated revenue of Panevezio statybos trestas AB Group was
98.451 mln. Euros, i.e. by 31 per cents higher than the revenue for the year 2020. In 2020, the revenue
of the Group amounted to 74.912 mln. Euros. The net profit of the Group is 3.049 mln. Euros in
2021, whereas in 2020 the Group suffered the loss in the amount of 10.431 mln. Euros.
65
Revenue and net profitability variation for the Company:
Revenue and net profitability variation for the Group:
Table 2. Performance (thousands Euros) of the Company and the Group of Panevezio statybos
trestas AB for the period 2019 through 2021:
Group
Items
Company
2019
2020
2021
2019
2020
2021
110,466
74,912
98,451
Revenue
108,464
59,712
65,721
104,586
68,167
86,283
Cost of sales
104,913
58,531
59,888
5,880
6,745
12,168
Gross profit
3,551
1,181
5,833
5.32
9.00
12.36
Gross profit margin (per cents) (API)
3.27
1.98
8.88
-681
-9,360
2,414
Typical operating result
-651
-12,595
-589
-0.62
-12.49
2.45
Typical operating result from
turnover (per cent)
-0.60
-21.09
-0.90
2,553
-7,925
3,477
EBITDA
1
(API)
1,926
-11,362
259
2.31
-10.58
3.53
EBITDA margin (per cents) (API)
1.78
-19.03
0.39
821
-10,431
3.499
Net profit (API)
590
-12,418
304
0.74
-13.92
3.55
Nets profit (loss) margin (per cents)
0.54
-20.80
0.46
0.05
-0.638
0.214
Earnings per share (Euros) (EPS)
2
(API)
0.036
-0.76
0.019
2.39
-34,40
12.58
Return on equity (per cents) (ROE)
3
(API)
1.70
-43.89
1.38
66
Group
Items
Company
2019
2020
2021
2019
2020
2021
1.07
-13.99
4.41
Return on assets or asset
profitability (ROA)
4
(API)
0.83
-18.59
0.55
2.25
-35.97
6.65
Return on investments (ROI)
5
(API)
1.65
-52.81
1.29
1.63
0.75
1.30
Current liquidity ratio
6
(API)
1.35
0.88
1.12
0.85
0.53
1.00
Critical liquidity ratio
7
(API)
1.24
0.81
0.94
0.45
0.36
0.34
Equity ratio
8
(API)
0.49
0.35
0.46
0.54
0.62
0.65
Debt ratio
9
(API)
0.51
0.65
0.54
1,21
1.72
1.90
Debt to equity ratio
10
(API)
1.05
1.85
1.19
2.10
1.61
1.79
Book value per share
11
(API)
2.13
1.34
1.35
0.36
0.35
0.37
Price-to-book ratio (P/B ratio)
12
(API)
0.35
0.43
0.49
14.94
-0.89
3.08
Price-to-earnings ratio (P/E)
13
(API)
20.83
-0.75
35.50
1
EBITDA = profit before taxes, interest, depreciation and amortization. The essence of EBITDA indicator is to determine
the most objective profit (loss) of the company, which is least dependable on circumstances (least variable).
2
Earnings per share (Euros) = net profit (loss) / number of issued shares.
3
Return on equity (per cents) (ROE) = net profit / equity capital (a portion equity capital belonging to the shareholders).
4
Return on assets (ROA) or asset profitability = net profit / assets.
5
Return on investments (ROI) = net profit / (assets-current debt).
7
Critical liquidity ratio = (current assets – inventories) / current liabilities.
8
Equity ratio = equity capital / assets.
9
Debt ratio = liabilities / assets.
10
Debt to equity ratio = liabilities / equity.
11
Book value per share = equity capital / number of shares.
12
Price-to-book ratio (P/B ratio) = share price as of the end of reporting period / share book value.
13
Price-to-earnings ratio (P/E) = share price as of the end of reporting period / net profit allocated for one share.
Panevezio statybos trestas AB uses Alternative Performance Indicators to better disclose the
financial performance of the Group and the Company. The description of these indicators and
methodology for their calculation are available on the Company's website
https://www.pst.lt/en/finansines-ataskaitos
The main revenue of the Company by activity types is from construction and erection activities. In
2021, the revenue of the Group from construction and erection activities totalled 71.9 per cents, the
revenue from real estate was 8 per cents, the revenue from finished products and other revenue
amounted to 20.1 per cents, whereas in 2020, the revenue of the Group from construction and erection
activities totalled 94 per cents, the revenue from real estate was 1.7 per cents, the revenue from
finished products and other revenue amounted to 4.3 per cents.
Revenue distribution by activity types for the Company (mln. Euros):
108,50
59,71
65,72
0,00 20,00 40,00 60,00 80,00 100,00 120,00
2019
2020
2021
Construction and erection activities
67
Revenue distribution by activity types for the Group (mln. Euros):
The main activities of the Company were performed in Lithuania and made 99.17 per cents of all
works carried out by the Company in 2021 and 97.8 per cents in 2020. The revenue of the Group
from the works performed inside the country made 78.9 per cents of the revenue, whereas in 2020 it
was 81.2 per cents. In 2021 and 2020, the revenue of the Group in the Scandinavian countries was
respectively 12.2 and 16 per cents of the all revenue.
Operating revenue distribution by countries for the Company (mln. Euros):
Operating revenue distribution by countries for the Group (mln. Euros):
104,60
70,42
70,80
1,24
7,87
5,90
3,26
19,78
0,00 20,00 40,00 60,00 80,00 100,00 120,00
2019
2020
2021
Revenue of the Group (mln. Euros)
Construction works Real estate Products produced and other income
102,13
58,40
63,86
1,09 5,24
1,31
1,86
0,00 20,00 40,00 60,00 80,00 100,00 120,00
2019
2020
2021
Revenue of the Company (mln. Euros)
Lithuania Russian Federation Latvia
94,21
60,86
77,65
1,09
6,78
10,05
12,02
12,05
5,11
2,04
1,97
0,00 20,00 40,00 60,00 80,00 100,00 120,00
2019
2020
2021
Revenue of the Group (mln. Euros)
Lithuania Russian Federation Scandinavian countries Other countries
68
Environment protection
Quality, environment protection, occupational health and safety play a very important role in
activities of Panevezio statybos trestas AB. Quality Management (ISO 9001), Environmental
Management (ISO 14001) and Occupational Health and Safety Management (OHSAS 18001)
Systems introduced and available at the Company allow taking proper care of these significant
factors. Assessment of occupational risk is carried out, analyses are performed and measures for risk
reduction or elimination are taken on each site. For the purposes of environment and resource
protection and sustainability, ensuring pollution prevention, in the beginning of each project the
environmental plan including specific measures for control of significant aspects of environment
protection and activities performed is prepared.
In 2020, the Lithuanian National Accreditation Bureau accredited the Construction Laboratory of the
Company in accordance with LST EN ISO/IEC 17025:2018 for the period of 5 years, thus granting
the right to perform tests of building materials.
The companies of the Group also have Quality, Environmental And Occupational Health And Safety
Management Systems in accordance with the requirements of LST EN ISO 9001:2015, LST EN ISO
14001:2015 and LST ISO 45001:2018 introduced and successfully functioning.
Employees
Professional, competent and responsible employees are the biggest asset of the Company. Therefore,
much attention is paid to motivation of employees: environment favourable for generation and
implementation of new ideas is being created and sharing of information is being promoted. In
modern environment, competence of employees is one of the key factors describing competitiveness
of the company. 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.
As of 31 December 2021, the number of employees in the Group was 833, in the Company – 560.
As of 31 December 2020, the number of employees in the Group was 870, in the Company – 593.
Operating restrictions caused by the COVID-19 pandemic, reduced workload also had direct impact
on decrease in the number of employees of the Company and the Group.
Table 3. Average number of employees in 2020 and 2021:
Average number of
employees
2020
2021
Group
Company
Group
Company
Managers
25
13
23
11
Specialists
315
236
316
234
Workers
575
382
523
347
Total
915
631
862
592
Table 4. Education level of the Group employees as of the end of the period:
PST Group
employees
Payroll
number
Higher
university
level
education
Higher non-
university
education
Junior
college
education
Secondary
education
Incomplete
secondary
education
Managers
22
21
0
1
0
0
Specialists
311
243
26
30
12
0
Workers
500
23
11
67
353
46
Total
833
287
37
98
365
46
69
Employment contracts do not include any special rights and obligations of employees or some part
of them.
In 2021, the Company also paid much attention to qualification improvement. Training in the
Company is done in two directions using:
1. Services of training institutions (external training);
2. Services of higher education institutions (employee studies).
11. Important events having occurred since the end of the preceding financial year
Information on key events having occurred after the end of the financial year is provided in the Notes
to the Separate Financial Statements (Note 32) and Consolidated Financial Statements (Note 32),
also refer to Section 13 of this Annual Report.
12. Information on research and development activities performed by the Company and the
Group
The Company and companies of the Group pay much attention to improvement of business process
management, increase of operational efficiency, make targeted investments in increasing
competitiveness of production capacities, improving working conditions of employees.
To maintain the highest competence in the construction sector, the Company implements and uses
advanced processes and technologies in its activities.
For design preparation we use the up-to-date design software. We are constantly keeping up to date
with the latest applications and supplementing our software package.
The Company strives for fluent construction operations. We use the up-to-date software that allows
us using the advantages of the Building Information Modelling (BIM). This digital model is used in
the tender preparation and preparation for construction stages, delivering supplies to the site,
monitoring the progress of planned and completed activities.
13. Operation plans and forecasts of the Company and the Group
The economy that has not been able to recover from the impact of the COVID-19 pandemic will face
a difficult period again in 2022. The increased geopolitical tension in the region and the European
Union (EU) following the Russia's invasion of Ukraine are undoubtedly affecting the construction
and real estate sectors. Thus far, it is very difficult to forecast the impact of the situation on the
construction sector. As Ukraine is a major supplier of raw materials, the war currently taking place
in Ukraine has a significant impact on the supply chain of materials and price increase. The Group
has considered the risks and does not order materials from any third countries, including Ukraine,
Belarus and Russia. However, most of the Lithuanian suppliers from which the Group purchases
materials, imported most of reinforcement bars, raw steel, timber and silicate blocks from Ukraine,
Belarus and Russia. To ensure the timely delivery of materials, the Company and the companies of
the Group are looking for alternatives and reorganizing the supply chain of materials to other
countries. The rise in energy prices also has a significant impact on the construction sector and the
companies of the Group.
It is likely that due to the turmoil in the financial markets, rising prices for raw materials and energy,
clients may review or suspend investments resulting in suspension or delay of some projects. This
might mean reduction in the volume of construction.
The Group and the Company responsibly monitors and assesses the processes ongoing in the market
to ensure the smooth continuity of operations.
Panevezio statybos trestas AB and the companies of the Group will search for solutions to absorb
the negative effects of the war on the operations of the Group, seek to ensure that the costs of the
projects in progress as well as investments and operating activities are optimal.
In 2022, the Company and the Group will make every effort to assess and manage the risks that have
arisen, find new markets and increase the cost-effectiveness of new projects. The Company and the
Group will continue developing real estate in order to achieve a return on investments.
70
14. Authorised capital of the issuer and its structure
As of 31 December 2021, the authorised capital of the company amounted to 4,741,500 Euros divided
into 16,350,000 ordinary registered shares (ORS) the nominal value of each share being 0.29 Euros.
All shares are fully paid. The proof of ownership is the record in the securities accounts.
The Company has not acquired any shares of the Company.
On 31 December 2021, the total number of the shareholders was 1,734.
Table 5. Distribution of shareholders by residence country and legal form:
Investors
Number of shares,
pcs.
Portion of authorized
capital, per cents
Foreign investors
Legal entities
1,991,745
12.2%
Natural persons
1,362,559
8.3%
Local investors
Legal entities
9,358,358
57.2%
Natural persons
3,637,338
22.2%
Table 6. Shareholders holding or controlling more than 5 per cents of the authorised capital of the
Company:
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.)
Portion of the
authorized
capital held (%)
Portion of votes
granted by the shares
held under ownership
right (%)
PANEVEZIO KELIAI AB
S. Kerbedzio Str. 7, Panevezys
Company code: 147710353
8,138,932
49.78
49.78
CLAIRMONT HOLDINGS LTD
Company number 85573
GRIGORI AFXENTIOU, 27
P.O. 6021, CYPRUS
936,052
5.72
5.72
Freely floating shares
7,275,016
44.50
44.50
At the Extraordinary General Meeting of Shareholders of Panevezio keliai AB held on 14 March
2022 the shareholders of the company took the decision to replace the name of Panevezio keliai AB
(legal entity number 147710353) by HISK AB. This change has affected only the name of the
company, other data as well as rights and obligations remain unchanged.
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 Panevezio statybos
trestas AB is 16,350,000, one ordinary registered share of the Company carries one vote at the
General Meeting of Shareholders.
15. Dividends
The decision to pay dividends is taken and the amount to be paid as dividends is set by the General
Meeting of 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 end of the tenth business day from the
General Meeting of Shareholders that adopted the relevant decision are entitled to the dividends.
Dividends are taxable in accordance with the Law on Income Tax of Individuals and the Law on
Corporate Income Tax of the Republic of Lithuania.
71
The Ordinary General Meeting of Shareholders of Panevezio statybos trestas AB that took place on
29 April 2021 did not come to the decision to pay dividends.
Table 7. History of dividends paid over the previous years:
Profit of financial year allocated for dividends
2015
2016
2017
2018
2019
Total amount allocated for dividends,
Euros
261,977
1,062,750
981,000
0
490,500
Dividends per share
0.016
0.065
0.060
0
0.030
Ratio of dividends to the Company's net
profit, per cent
79.80
59.33
504.50
0
83.09
Dividend profitability (dividends per
share / share price as of the end of the
period), per cents
1.7
6.9
6.6
0
5.3
16. Information on significant transactions between the related parties
All transactions with related parties are provided in the Notes to the Separate Financial Statements
(Note 29) and Consolidated Financial Statements (Note 28).
17. Published information
In accordance with the procedure established by the laws of the Republic of Lithuania, all material
events related to operation of the Company and information on the time and place of the General
Meeting of Shareholders are published on the website of the Company
https://www.pst.lt/investuotojams and on the stock exchange NASDAQ Vilnius AB
(www.nasdaqomxbaltic.com).
72
Corporate Governance Report
Information on compliance with the Corporate Governance Code
The information on compliance with the Corporate Governance Code is provided in Appendix 1 to
the Annual Report.
Panevezio statybos trestas AB in principle complies with the recommendatory Governance Code for
the companies listed at NASDAQ OMX Vilnius. Referring to the Articles of Association of the
Company, the governance bodies of the Company include the General Meeting of Shareholders, the
Board and the Managing Director. According to the Law on Companies of the Republic of Lithuania,
either two (supervisory and management) or one collegial management body may be set up in the
Company at the discretion of the Company. As no Supervisory Board is set up in the Company, the
Board is elected, which performs the supervision functions pursuant to the Law on Companies of the
Republic of Lithuania. Following the Articles of Association of the Company, the Board is set up of
5 members, which are elected for the period of four years. The members of the Board represent the
shareholders and perform the supervisory and control functions. Only the Audit Committee, which
is elected for the period of one year, is formed in the Company. The functions of the Nomination and
Remuneration Committees are performed by the Board.
The system of the corporate governance ensures fair treatment of all shareholders, including minority
and foreign shareholders, and protects the rights of the shareholders.
The management system of the Company ensures that any information on all essential issues,
including financial situation, operation and Company management, is disclosed in a timely and
accurate manner.
The Audit Committee of the Company gives recommendations to the Board on nomination of an
auditing company/auditor. The Board selects the candidate for the auditing company/auditor and
submits it to the General Meeting of Shareholders for approval. This ensures independence of the
conclusions and opinion provided by the auditing company.
Information on extent of risk and risk management
Risk management is a part of strategic management and integral to the day-to-day operations of the
Group. In managing risks, the main objective of the Group is to identify higher and significant risks
and manage them in the optimal way. The following financial risks are faced within the Group: credit,
liquidity, market and operational.
The Board is responsible for setting up and maintaining the risk management structure. The risk
management policy of the Group is aimed at identifying and analysing the risks faced by the Group,
introduction and maintenance of appropriate limits and controls. The risk management policy and
risk management systems are reviewed at regular intervals to reflect changes in market conditions
and operation of the Group. The Group seeks to create a disciplined and constructive environment
for risk management where all employees know their roles and responsibilities.
Based on the credit risk policy established by the Group, standard payments and terms are only
offered after credit standing of each new client has been assessed. The potential credit risk for the
clients of the Group and the Company is managed through continuous monitoring of outstanding
balances. The aim to ensure that the services are provided to reliable clients and do not exceed the
permissible credit risk limit is continuously maintained. The clients failing to meet the established
limit may only make purchases with the Group after paying prepayments.
The Group manages liquidity risk to ensure, as far as possible, sufficient liquidity, which allows
fulfilling its obligations under both normal and complex conditions without incurring unacceptable
losses and without facing the risk to lose reputation of the Group. The Company and the Group strives
to maintain sufficient amount of cash and cash equivalents or secure of appropriate credit instruments
so as to fulfil their obligations.
The market risk is the risk that changes in market prices, for example, changes in exchange rates and
interest rates will affect the result of the Group or the value of available financial instruments. The
purpose of the market risk management is to manage open positions of risk in order to optimize
returns.
73
Business risk is related to the Group's entry into new markets, segments, management of available
inventories and investments, and execution of construction contracts. One of the peculiarities related
to construction activities is that the fulfilment of concluded construction contracts is a long-term
process, which makes the sector inert to changes in the economic environment. For this reason, both
positive and negative changes reach the economic environment in the construction sector with
considerable delay. In order to manage business risk, the Company and the Group seek to diversify
their sources of revenue. To this end, orders are being sought and contracts are being concluded in
both private and public sectors, and markets are being searched not only in Lithuania but in other
countries as well. The companies of the Group operate in different sectors, such as construction, real
estate development, production and engineering network installation. The construction sector is not
limited to the construction of single-purpose buildings. The Company implements construction
projects for industrial, engineering, environmental and residential buildings. Before starting new
projects, the Company and the companies of the Group make a thorough analysis of the project
specifics and only after are confident that the environment is sufficiently stable and a competent team
is collected, final decisions are made.
The accounts of the Company are kept and financial statements are prepared in accordance with
International Financial Reporting Standards adopted for application in the EU. The annual financial
statements are audited by the independent auditors selected by the General Meeting of Shareholders.
This procedure ensures relevance and transparency of the data provided in the financial statements.
Operational risk constitutes the risk of probability to incur losses due to people, systems, inadequate
internal processes or their failure, effects of external events, including legal risks. For the purposes
of operational risk management, the Group implements appropriate measures to ensure functioning
of the internal control system and appropriate co-operation with relevant third parties. The main
elements of internal control applied in the Group are control of operations and accounting, limits of
decision-making powers and their control, separation of business decision-making and control
functions, etc. The aim is to minimize the risk of legal compliance and ensure that the activities
carried out comply with the applicable legislation. To this end, the advice of professional lawyers
and their participation are used in the processes of drafting internal instruments and contracts.
Information on significant directly or indirectly held share portfolios
The Company has no information available on directly or indirectly held share portfolios.
Information on any transactions with related parties as prescribed by Paragraph 2, Article 37 of
the Law on Companies.
There were no such transactions concluded.
Information on shareholders with special control rights
There are no shareholders with special control rights in the Company. The ordinary dematerialised
shares of the Company grant equal voting rights to all shareholders of the Company.
Information on all existing limitations on voting rights
The Company has no information available on limitations on voting rights.
Information on rules regulating election and replacement of the Board members, and amendment
of Articles of Association
The Board of the Company consisting of five members is 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 is not different from that
prescribed by the Law on Companies.
The Articles of Association may be amended only by the General Meeting of Shareholders by the
qualified majority of at least 2/3 of the total votes of the shareholders attending the meeting. The
resolution amending the Articles of Association is adopted following the procedure set forth in the
Law on Companies of the Republic of Lithuania.
74
Information on powers of members of the Board
The powers of the members of the Board are set forth in the Law on Companies of the Republic of
Lithuania and the Articles of Association. The Articles of Association of Panevezio statybos trestas
AB are published on the website at http://www.pst.lt/en/investuotojams.
Information on powers of General Meeting of Shareholders, rights of shareholders and their
exercising
The powers of the General Meeting of Shareholders and the rights of shareholders are set forth in the
Articles of Association and are not different from that prescribed by the Law on Companies.
Information on composition of management, supervisory bodies and their committees, their activities
and field of activities of the Chief Executive Officer
Referring to the Articles of Association of Panevezio statybos trestas AB, the management bodies
of the Company are the General Meeting of Shareholders, the Board and the Managing Director. The
Supervisory Council is not formed in the Company.
The General Meeting of Shareholders is the highest governing body of the Company, resolving the
issues assigned to its competence by the Law on Companies and the Articles of Association of the
Company. The competence of the General Meeting of Shareholders does not differ from that of the
competence prescribed by the Law on Companies.
According to the Law on Companies of the Republic of Lithuania, one collegial management body
may be formed in the Company. The Board consists of 5 (five) members, who are elected by the
General Meeting of Shareholders for the period of 4 (four) years. They represent the shareholders
and perform supervisory and control functions. The activities of the Board are managed by the
Chairman. The Board elects the Chairman from the members of the Board.
The Chief Executive officer of the Company is the Managing Director. The Managing Director is
the sole governing body of the Company. The Managing Director is the main person managing and
representing the Company. The Board elects and dismisses the Chief Executive Officer of the
Company – the Managing Director, fixes his salary, sets other terms and conditions in the
employment contract with him, approves his job description, gives incentives and imposes penalties.
The Managing Director shall organize the activities of the Company.
The Board:
The Board members of Panevezio statybos trestas AB were elected for a new 4 (four) year term at
the General Meeting of Shareholders on 9 April 2021, 2 (two) members of the Board are independent.
The term of office of all members of the Board will end on 9 April 2025.
JUSTAS JASIUNAS, Chairman
Educational background: Mykolas Romeris University, Master in Law.
Place and position of employment: Consultant at Panevezio statybos trestas AB (company code
147732969, P. Puzino Str. 1, Panevezys).
Participation in activities of other companies:
Board Member at Panevezio keliai AB (company code 147710353, S. Kerbedzio Str. 7, Panevezys);
Chairman at Aliuminio fasadai UAB (company code 305412441, Pramones Str. 7, Panevezys);
Chairman at Vekada UAB (company code 147815824, Marijonu Str. 36, Panevezys);
Board Member at Skydmedis UAB (company code 148284718, Pramones Str. 5, Panevezys).
As of 31 December 2021, held no shares of the Company.
75
GVIDAS DROBUŽAS, Board Member
Educational background: Panevezys Polytechnic School, higher non-university.
Place and position of employment: General Director, Board Member at IOCO Packaging UAB
(company code 110564826, Pusaloto Str. 212, Panevezys).
Participation in activities of other companies:
Chairman at Panevezio keliai AB (company code 147710353, S. Kerbedzio Str. 7, Panevezys);
Consultant at Panevezio statybos trestas AB (company code 147732969, P. Puzino Str. 1, Panevezys);
Board Member at PST investicijos UAB (company code 124665689, Ukmerges Str. 219, Vilnius);
Director at Pokstas UAB (company code 168424572, Gustonys Vlg., Naujamiestis Eldership,
Panevezys District Municipality);
Director at IOCO UAB (company code 302547850, Verkiu Str. 25C-1, Vilnius);
Director at Stenrosus UAB (company code 300007108, B. Sruogos Str. 6-14, Vilnius).
As of 31 December 2021, held 5 (five) shares of the Company, a shareholder of Panevezio keliai AB.
VAIDAS GRINCEVICIUS, independent Board Member
Educational background: Vilnius University, Master in Management and Business Administration.
Participation in activities of other companies:
Venture Capital Investor, Member of LitBAN (Lithuanian Business Angel Network) Association
(company code 304811409, L. Stuokos-Guceviciaus Str. 9-10, Vilnius);
Chairman at SIQOR industries UAB (company code 304755864, Konstitucijos Ave. 21A, Vilnius).
As of 31 December 2021, held no shares of the Company.
KRISTINA MACIULIENE, Board Member
Educational background: Kaunas University of Technology, Bachelor in Business Administration,
Lithuanian University of Law, Master in Law.
Place and position of employment: Expert-Consultant at Panevezio keliai AB (company code
147710353, S. Kerbedzio Str. 7, Panevezys).
Participation in activities of other companies:
Board Member at Panevezio keliai AB (company code 147710353, S. Kerbedzio Str. 7, Panevezys);
Chairman at Skydmedis UAB (company code 148284718, Pramones Str. 5, Panevezys);
Chairman at Hustal UAB (company code 304968047, Tinklu Str. 7, Panevezys);
Board Member at Metalo meistrai UAB (company code 148284860, Tinklu Str. 7, Panevezys);
Board Member at Vekada UAB (company code 147815824, Marijonu Str. 36, Panevezys);
Board Member at Aliuminio fasadai UAB (company code 305412441 Pramones Str. 5, Panevezys);
Chairman at Lauktuves Jums UAB (company code 147797155, Laisves Sq. 26, Panevezys);
Chairman at Gustoniu zemes ukio technika UAB (company code 168581940, S. Kerbedzio Str. 7F,
Panevezys).
As of 31 December 2021, held 10 (ten) shares of the Company.
LINA SIMASKIENE, independent Board Member
Educational background: Kaunas University of Technology, Engineer-Economist.
Place and position of employment: Chief Financial Officer at IOCO Packaging UAB (company code
110564826, Pusaloto Str. 212, Panevezys).
Participation in activities of other companies:
Chief Accountant at IOCO UAB (company code 302547850, Verkiu Str. 25C-1, Vilnius);
Chief Accountant at Pokstas UAB (company code 168424572, Gustonys Vlg., Naujamiestis
Eldership, Panevezys District Municipality);
Chief Accountant at Stenrosus UAB (company code 300007108, B. Sruogos Str. 6-14, Vilnius);
Chief Accountant at New Miracle UAB (company code 304552981, J. Zikaro Str. 33A, Panevezys);
Director at WEB Solutions MB (company code 303044019, Filaretu Str. 99A, Vilnius),
As of 31 December 2021, held no shares of the company.
76
Administration:
EGIDIJUS URBONAS – Head of the Company Administration, Managing Director. Holds no shares
of the Company. University education, Construction Engineering, Kaunas Technology University.
Master Degree in Construction Engineering, Vilnius Gediminas Technical University, postgraduate
program in Construction Management.
Participation in activities of other companies: Chairman at PST investicijos UAB (company code
124665689, Ukmerges Str. 219, Vilnius)
As of 31 December 2021, held no shares of the Company
DANGUOLE SIRVINSKIENE – Chief Accountant of the Company. Holds no shares of the
Company. University education (LZUA, 1983), Accounting - Economics.
In 2021, no loans, guarantees, sureties were granted and no property was transferred to any Board
Members or top managers of Panevezio statybos trestas AB.
Audit Committee
Following Article 52 of the Law on Audit of the Republic of Lithuania, the General Meeting of
Shareholders of Panevezio statybos trestas AB elects the Audit Committee. The Audit Committee
consists of three members, two 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 functions of the Audit Committee are as follows:
1) to monitor the financial reporting process;
2) to monitor effectiveness of the company's internal control, risk management and internal audit,
if applicable, systems;
3) to monitor the process of the audit;
4) to monitor independence and objectivity of the auditor or audit company.
The following members were elected to the Audit Committee at the Annual General Meeting of
Shareholders of Panevezio statybos trestas AB on 29 April 2021:
Drasutis Liatukas – an independent auditor, Head of Finansu auditorius UAB, auditor. Holds no
shares of the Company;
Irena Kriauciuniene – an independent auditor. Holds no shares of the Company;
Egle Grabauskiene – Deputy Chief Accountant of the Company. Holds no shares of the Company.
Diversity policies applied to election of the CEO and members of the supervisory bodies of the
company
The Company has no diversity policy for election of the CEO and members of the supervisory bodies
of the Company. The main criterion for election of a candidate to CEO and members of the
supervisory or management bodies is competence of the candidate.
Information on all agreements between the shareholders
The Company has no information on any agreements between the shareholders available.
77
Consolidated Report of Social Responsibility
We believe that corporate social responsibility is effective only when integrated into everyday work
and, if managed like any other business activity, it leads to a sustainable and responsible economy.
Constant and continuous improvement of business and project management, quality, customer
satisfaction, supply and subcontracting chain management, environmental and public relations at
PST is not only openness to the surrounding environment, but also the goal of operating ethically,
fairly and transparently in respect of the market, environmental protection, society and employees.
In their activities both, the Company and the companies of the Group, follow the highest standards
of business ethics and principles of social ethics. Social responsibility is based on its values and
defines the approach of the Company to its activities, integration of social, environmental and
transparent business principles in the internal processes of the Company and the Group as well as in
relations with its clients.
Short Description of Activity Model
Panevezio statybos trestas AB is one of the largest local construction companies, which has been
operating in the construction sector for more than 60 years and has the highest competence for
creation of exceptional quality. Honesty, responsibility, professionalism, quality workmanship and
efficient solutions are the values that have allowed us to achieve our goals – today we are one of the
largest construction companies in Lithuania. The Company has implemented many especially
important and complex projects that have contributed to the economic growth of Lithuania and have
a significant impact on development of infrastructure and improvement of environment protection in
the country.
In 2021, the Company made structural changes in order to optimize costs, concentrate services and
strengthen production capacity. One of them, merge of the branches Konstrukcija and Betonas,
Genranga and Stogas, took place at the beginning of the year. This merge resulted in reduction of
branch administration costs and faster decision-making processes.
The Company comprises the following branches:
- Gerbusta, focusing on construction of utility networks and landscaping.
- Pastatu apdaila, carrying out indoor and outdoor finishing works,
- Konstrukcija where production capacities were concentrated,
- Vilnius branch Genranga, performing general contracting activities and project management
in the Vilnius Region,
- Klaipstata, performing general contracting activities and project management.
The business model of Panevezio statybos trestas AB Group did not change last year. The number
of the companies remained the same. The Group consists of the parent company, Panevezio statybos
trestas AB, and 13 subsidiaries in Lithuania, Latvia, Poland and the Russian Federation. Information
on the portion of the capital held by Panevezio statybos trestas AB in the subsidiaries is provided in
Section 5 of the Consolidated Annual Report.
Panevezio statybos trestas AB and the companies of Panevezio statybos trestas AB Group belong to
various associations. Panevezio statybos trestas AB is the member of the Lithuanian Construction
Association, Association of Testing Laboratories for Construction Products, Panevezys Chamber of
Commerce, Industry and Crafts. Metalo meistrai UAB is the member of the Lithuanian Association
of Welders and PST investicijos UAB is the member of the Lithuanian Real Estate Development
Association.
For management purposes, the Group is divided into business units based on the nature of their
activity and has the following accountable segments:
• Construction;
• Steel structures;
• Timber panel houses;
• Concrete floor installation;
• Aluminium structure production;
• Real estate development;
• Other activity.
78
The segment of construction includes activity of Panevezio statybos trestas AB, Vekada UAB, Alinita
UAB and PS Trests SIA. The main area of activity is construction, design and erection of various
buildings, structures, equipment and communications, construction/installation of other objects
(electrical installation, building renovation, installation of plumbing, waste water systems, fire
protection systems, video surveillance, security and fire alarm) in Lithuania and other countries.
The segment of steel structures includes activity of Metalo meistrai UAB and Hustal UAB. The main
area of their activity is design and fabrication of steel structures for construction. The company also
delivers steel structures to other companies based on their demand.
The segment of timber panel houses includes activities of Skydmedis UAB. The area of activity is
design, production, construction and outfitting of prefabricated timber panel houses, production of
timber structures and millwork.
The segment of concrete floor installation are carried out by Pastatu apdaila, the branch of Panevezio
statybos trestas AB.
The aluminium structure production (the production of aluminium profile systems, aluminium
framed windows and doors) was started by Aliuminio fasadai UAB in the beginning of 2020.
The segment of real estate development includes Seskines projektai UAB, Ateities projektai UAB,
Tauro apartamentai UAB, Teritorija OOO and PST investicijos UAB.
The segment of other activity includes Kingsbud Sp.z o.o., which is engaged in wholesale of
construction materials.
Due to insignificance of volumes, the segments of concrete floor installation and production of
aluminium structures are not distinguished and are presented in the segment of Other activity in the
consolidated financial statements.
In view of the increased geopolitical tension in the region, new sanctions and restrictive measures
imposed on the Russian Federation and Republic of Belarus by the European Union and its allies,
Panevezio statybos trestas AB ceases to operate its companies located in the region of the Russian
Federation.
Strategy, vision, mission and objectives of the Company
In its activity, Panevezio statybos trestas AB follows the 3-year strategy approved by the Board. The
strategy of the Company for the years 2019 through 2021 is based on growth in operation,
enhancement in corporate value, management of client relations, ensuring of safe working
environment and development of employees.
Vision – To become a reputed construction company in Europe, which uses advanced technologies,
ensures quality and agreed work completions terms.
Mission - While honestly fulfilling our obligations, promoting long-term cooperation and proposing
mature solutions in construction, we ensure profitable and sustainable business development.
Objective - To retain the leading position in the construction market by creating the added-value to
our clients, shareholders and employees.
Principles of social responsibility:
Accountability (for impact on society, economy, environment);
Transparency (of decisions and activity, which have impact on society and environment);
Ethical (proper) behaviour;
Respect (listening attentively and responding) for stakeholders’ interest;
Respect for the rule of law;
Respect for international norms of behaviour;
Respect for human rights.
79
Environment Protection
Panevezio statybos trestas AB and the companies of the Group (Skydmedis UAB, Metalo meistrai
UAB, Alinita UAB, Vekada UAB) have the Environmental Management System (EMS) consistent
with the requirements of ISO 14001:2015/LST EN ISO 14001:2015, legal and other environmental
regulations established, documented and constantly reviewed to ensure its suitability, adequacy and
effectiveness.
In the process of implementation related to the established Environmental Policy, the Company seeks
to preserve a healthy environment to any employee, biological and landscape diversity as well as
optimal use of natural resources. The Environmental Policy is published in all branches, subsidiary
companies and sites of Panevezio statybos trestas AB, available for public and all interested parties
on the website at www.pst.lt.
When making plans of the environmental system, external and internal issues with regard to the
objectives and strategic direction of the Company as well as needs and requirements of interested
parties are taken into account resulting in defining risks and opportunities to make sure that the
integrated management system is able to achieve the intended outcome, strengthen the desired
impact, prevent or reduce undesired effects and achieve continual improvement. The Company plans
actions to eliminate risks, actions to address and strengthen opportunities, how actions should be
integrated and implemented in the EMS processes, assessment criteria and effectiveness of these
actions. Panevezio statybos trestas AB has the Risk and Opportunity Register prepared.
The significant environmental aspects are determined in all branches, subsidiary companies and sites
of the Company after significance of activity impact on environment is taken into account and legal
requirements are identified. The environmental aspects are identified by analysing past, current and
potential beneficial and adverse environmental impact of activities, services and products of the
subdivisions. The review of these aspects is performed at least once per year and in case the nature
of activities or any other conditions, such as a process, materials used, technologies, etc., changes,
provided they condition occurrence of new environmental aspects. The site aspects are identified
individually for each project.
The significant environmental aspects can cause one or more significant environmental impacts and
therefore can result in risks and opportunities to be assessed in order to ensure the Company is able
to achieve the intended outcomes of the EMS. When determining environmental aspects, a life cycle
perspective is taken into account. The following key life cycle stages of a product/service are thought
over and evaluated: raw material acquisition, design, production of construction products,
transportation, construction of a building, use of a building, end-of-life treatment and final disposal
(waste recycling and management). For each aspect possible legal and other requirements, which can
affect activities of the Company and the Group, are identified.
As every year, in 2021 the Company monitored the EMS indicators and performed measurements:
amount of waste, amount of hazardous chemicals used, incidents related to soil pollution with oil
products, rainwater pollution, emissions from internal combustion engines, air pollution with
particulate matter, noise, indoor dust, street pollution with dirt/dust, consumption of electricity,
water, fuel, etc.
The use of hazardous chemicals in construction sites is being reduced by replacing them with less
hazardous ones.
In its operation the company uses only green electricity produced from renewable energy sources.
Panevezio statybos trestas AB has a responsible approach on the issues of climate change and is not
only a consumer of electricity, but also a producer.
Panevezio statybos trestas AB operates a 200 kW solar power plant generating approximately 190
thousand kWh of the electric power annually, which makes about 30 per cents of the electric power
consumed by the production facilities. In addition to that, the Company operates three power plants
of 30 kW each, together they generate about 80,000 kWh of renewable electric power, which is
supplied to the electric grid. In 2021, a new 150 kW solar power plant was installed and started in
one of the companies of Panevezio statybos trestas AB Group, Skydmedis UAB. It is planned that it
will produce about 80 – 90 per cents of the electric power required for production facilities.
The amount of green electric power generated from the renewable electric sources over the year 2021
totalled 263.549 thousand kWh (24.9 thousand kWh in 2020), which prevented 1028.79 t of CO2
emissions (97.2 t of CO
2
in 2020).
80
In 2021, the company of Panevezio statybos trestas AB Group, Skydmedis UAB, installed and started
using a bioboiler for heating of premises. 30 per cents of the biofuel required for operation of this
boiler is obtained from production timber waste, which does not need to be disposed of.
The MobyDick ConLine KIT Flex400 MC Wheel Washing System has been successfully in use. The
closed-cycle wheel washing system not only reduces street pollution with dirt, prevents contaminated
water from entering urban sewage networks, but also does not interfere with other road users when
cleaning roads and is an alternative to sweeping brooms that cause dust and particulate matter spread
in the city.
The accounting of generated waste is performed in the GPAIS module: https://www.gpais.eu.
The Group sorted out the following quantities of waste for recycling and reuse, as well as secondary
raw materials:
2021
2020
Group
incl. Company
Group
incl. Company
Timber waste, t
71.03
68.89
42.59
35.93
Paper, cardboard waste, t
12.83
12.83
8.53
6.49
Polyethylene waste, t
7.69
7.69
7.81
0.12
To reduce air pollution Gerbusta branch performs control of emissions from vehicles and machinery
with internal combustion engines, Skydmedis UAB monitors air cleaning equipment, Metalo meistrai
UAB makes efficiency measurements of air cleaning equipment in painting chambers.
In 2021 the pollution charges paid amounted to 132,955 Euros (168,509 Euros in 2020) for the Group
and 123,071 Euros (157,968 Euros in 2020) for the Company, including:
2021
2020
Euros
Group
incl. Company
Group
incl. Company
Pollution with packaging waste
2,797
1,383
2,290
1,096
Pollution from mobile pollution sources
6,556
5,844
2,544
2,120
Environment protection (waste
management)
123,642
115,844
163,675
154,752
Modern engineering systems creating a healthy working environment are applied in the buildings
under construction. Where possible, environmentally friendly building materials are used. The
changed climatic conditions are taken into account in the construction process of the new buildings.
As the temperature conditions change, the needs for indoor ventilation, heating and cooling also
change. Therefore, new technological and architectural solutions are being implemented. The
construction sector uses very unsustainable CO
2
-neutral materials: steel, cement, glass, etc., therefore
solutions are being sought to make the construction process more environmentally friendly, i. e. use
of organic materials. Designers apply the highest standards for design and construction of a building,
contributing to environmental sustainability and healthy work environment. In the design process
much attention is paid to ensuring indoor air quality, intelligent lighting in accordance with good
international practices, sound resistance that retains external noise. The B2EAM New Construction
Very Good certificate confirming the above measures has been awarded to the Business Centre U219.
This certificate also acknowledges the responsible approach of developers to the environment and
human health, and guarantees long-term returns.
The report has been prepared based on the Communication from the European Commission -
Guidelines on Non-Financial Reporting (2017-C 215-01).
81
Taxonomy Overview
Regulation (EU) 2020/852, also known as the Taxonomy Regulation, establishes a common
nomenclature for the classification of sustainable economic activities and analysis of investments to
be considered as contributing to environmental objectives. The main activity of the Company is the
construction and design of various buildings, structures, equipment and communications and other
objects. The Company carries out work on the basis of detailed designs approved by the clients and
does not directly affect any sustainable economic activities set out in the regulation. As the Group
will be obliged to provide information in accordance with the Taxonomy Regulation, we have carried
out a preliminary assessment of whether/how the activities contribute to one of the six environmental
objectives set.
1. The new buildings construction of which is currently started by the Company are of the A++
energy efficiency class. The buildings of the A ++ energy efficiency class use almost no
thermal energy, which contributes to the climate change mitigation.
2. In its operations the Company uses only green electric power generated from renewable
electric power sources. A part of the consumed electric power is produced by the Company
itself, and another part is purchased from the suppliers of green electric power. operates a
200 kW solar power plant generating approximately 190 thousand kWh of the electric power
annually, which makes about 30 per cents of the electric power consumed by the production
facilities. In addition to that, the Company operates three power plants of 30 kW each,
together they generate about 80,000 kWh of renewable electric power, which is supplied to
the electric grid. A new 150 kW solar power plant was installed and started in one of the
companies of Panevezio statybos trestas AB Group, Skydmedis UAB. The amount of green
electric power generated from the renewable electric sources over the year 2021 totalled
263.549 thousand kWh (24.9 thousand kWh in 2020). the company of Panevezio statybos
trestas AB Group, Skydmedis UAB, uses a biofuel boiler house for heating of premises. 30
per cents of the biofuel required for operation of this boiler is obtained from production
timber wood waste, which does not need to be disposed of. These are renewable energy
sources, which allow significantly reducing the use of fossil fuels and contribute to reduction
of the greenhouse effect.
3. For construction of new buildings, sustainable materials are used more often. After the life
cycle of the building these materials could be reused for a new life cycle or be
environmentally friendly and do not result in pollutions by means of recycling. One such
material is timber. Skydmedis UAB, the company of the Group, uses timber panels for the
construction of houses.
4. Renewable car fleet. We give up old polluting cars by adding new, less polluting cars to the
fleet. 30 per cents of the vehicles owned by the Group comply with the requirements of the
Euro 6 emission standard.
Relationship with Employees
The main asset of the Company is employees, who are the most important link in achieving the
objectives. Therefore, much attention is paid to motivation of employees: environment favourable
for development of new ideas and their implementation is being created, continuous exchange of
information is taking place. In the present-day environment, competence of employees is one of the
key factors describing competitiveness of the Company. Considering this factor, the Company
encourages employees in all organizational levels to learn and develop. Employees are given the
opportunity to study, improve their qualifications, and participate in various seminars and trainings.
In 2021, the training cycles on emotional intelligence were organized, and a course on improvement
of performance appraisal skills was provided for managers. The lawyers together with the staff of
the Personnel Department attended the Annual Labour Law Conference, and training was provided
to the lawyers on the continuously changing regulation of public procurement. In 2021 considerable
attention was also paid to improving the practical skills of internal communication, for that purpose
professional lecturers were invited.
82
We constantly strive to become the leader in the construction market, guaranteeing safe and non-
hazardous work places for the employees of Panevezio statybos trestas AB and all employees
working on behalf of the Company. The Occupational Health and Safety Management System (ISO
45001) implemented in 2008 ensures continuous identification and assessment of OHS risk factors,
identification of risk management measures and control of their implementation for the Company.
The work and personal protective equipment is selected for the employees following the most
advanced technologies. The professional competence of employees and perception of employees in
the field of occupational safety and health is continuously improved. Much attention is paid to
prevention of accidents and occupational diseases, and reduction of accident likelihood. Partners,
suppliers and others working on behalf of the Company are involved in the processes of the
occupational health and safety system. The human and financial resources are provided to maintain
and continuously improve the occupational health and safety system.
The Company continuously invests in employee training and development courses to improve their
competencies and understanding in the field of occupational health and safety. In 2021 trainings were
organized both at the Company and educational institutions. Total number of trained employees and
managers was 243 in 2021. The employees participated in the following trainings:
- workers performing activities at height,
- load handler,
- locksmiths – fitters of lifting equipment,
- operators of lifting platforms and their equipment,
- OHS specialists,
- site OHS coordinators,
- first aid.
During the emergency and quarantine period, Panevezio statybos trestas AB Group complied with
the provision that appropriate, safe and healthy working conditions should be created for each
employee, i. e. employee work place and environment should be safe and healthy, the risk of infection
in the work environment should be minimize and employees should be protected from COVID-19.
For that purpose the COVID - 19 Preventive Action Plan was developed and implemented.
For the employees who were given the opportunity to work remotely using telecommunications
(Internet, telephone), the work was organized remotely. To increase the abilities to work remotely
for the employees, the Company has invested in purchase of laptops.
For the employees who, based on the analysis results, were not able to work remotely at their work
places, measures were taken to reduce the risk of COVID-19 infection:
- partitions between work places were mounted and organizational measures were applied to
maintain the distance of at least 2 meters between the employees.
- access to administrative premises and construction sites was reduced for third parties (by
installing door locks and control posts);
- clients’ access of to the premises of the Company was restricted, physical communication of
employees with clients was replaced by remote communication;
- employees were provided with the Personal Protective Equipment (PPE);
- For hygienic maintenance and disinfection of premises a special device (hot steam generator
FAST 250 PUMP PRO PLUS) was purchased for disinfection of offices and office
containers on the sites after each case of COVID-19 and periodically afterwards.
Implementation of the planned COVID - 19 preventive measures and compliance with the action
plan resulted in prevention f COVID - 19 virus outbreak in Panevezio statybos trestas AB Group.
Employees are motivated not only by material incentives, such as competitive wages and salaries,
progressive bonus system, but also by exceptional quality of working environment. The Company
and the Group provides social guarantees: the allowance is paid in the event of the death of a family
member or immediate family of the employee, in case of an employee’s death, a gift to an employee
when a baby is born, on the employee’s anniversary birthday.
83
On 6 August 2021, the Works Council for representation of the employees consisting of 9 members
was elected at the Company. The Works Council submits proposals to the employer on economic,
social and work issues, which are topical to the employees, employer’s decisions, laws and other
regulations governing work relations. The Council is elected for the period of three years, which
starts from the beginning of their term of office.
Human Rights
The Group advocates equal opportunities for all employees, regardless of the employee's gender. The
majority of the Group's employees, 81% (85% of the Company), are men. This is greatly influenced
by specifics of the activity performed, i. e. women are less likely to choose the technological work
performed in construction as well as specialties in construction and technical engineering directly
related to such work and outdoor conditions. In 2021, women accounted for 33% of all specialists in
the companies Group and 33% in the Company.
The Company and the Group adhere to the principles for the protection of human rights and do not
tolerate any violations of human rights in their activities. They are for the fair and transparent wage
and salary policy, comply with the laws regulating overtime and working hours, respect the right of
employees to rest and do not tolerate harassment and violence of any nature.
The Company opposes any discrimination and forced labour. Employees of the Company have equal
rights and possibilities regardless their gender, nationality, social or family status, membership in
public or political organisations or personal qualities. In 2020, there were no violations of human
rights or relevant claims recorded.
Social Initiatives
Panevezio statybos trestas AB keeps on implementing its objective to be a reliable and socially
responsible company. In its activity, the Company follows the principles of sustainable business
development, which also include social responsibility. Panevezio statybos trestas AB invests in
various extra activities, supports different social, sports, cultural and health promotion projects.
In 2021, Panevezio statybos trestas AB Group supported 17 various organizations, public institutions
in the fields of education, sports, culture, health. Among the social initiatives implemented by the
Group, the following activities were initiated by the Company:
- International initiative DUOday. For several days various units/branches allowed people
with disabilities to work there;
- Blood donation campaign in the Business Centre U219 in cooperation with the National
Blood Centre. It is planned to repeat the campaign.
Fight against Corruption and Bribery
The Company and its subsidiaries do not tolerate corruption or its manifestations of any nature and
pursue open competition, ethical business conditions and proper ensuring of transparency and
publicity in their activities. The Group does not tolerate fraud, extortion, unofficial accounting,
unofficial and inadequately executed transactions, accounting for fictitious expenses, use of forged
documents and other forms of corruption. Provisions of corruption intolerance apply to all employees
of the Group, members of the management and supervisory bodies, any third parties acting on behalf
of the Group.
The risk is mitigated by existing integrated internal controls for identifying potential risk factors for
corruption. The Company and the Group constantly control their activities by improving the
processes.
Panevezio statybos trestas AB and its subsidiary companies refrain from any form of influence on
politicians and does not fund election campaigns of political parties, their representatives or their
candidates.
The Group always co-operates with the institutions and is ready to provide all the necessary
information.
84
The Company and its subsidiary companies ensure that its procurement is carried out in compliance
with the principles of equality, non-discrimination, transparency, mutual recognition, proportionality
and requirements of confidentiality as well as impartiality at the same time using the Company’s
funds in a rational manner. Suppliers are selected on the basis of the most economically advantageous
proposal or the lowest price under equal and non-discriminatory conditions.
In performing selection of subcontractors, the Company carries out assessment of subcontractors’
qualification. Compliance with environmental, occupational health and safety requirements as well
as honesty are the fundamental requirements for subcontractors.
In 2021, Panevezio statybos trestas AB was included in the civil initiative Integrity Pacts
implemented by Transparency International, during which two projects related to modernization of
the Neris embankments and related public procurements were monitored. One part of this initiative
is assessment of business transparency, which consists of assessment of the largest businesses
operating in Lithuania, transparency assessment of the largest suppliers operating with the Vilnius
City Municipality in the field of infrastructure and construction, and their comparison with
assessment of the tender participants awarded the contract for the Neris embankments. Late 2021 -
early 2022 assessment of the largest suppliers who had participated in the public procurements
arranged by the Vilnius City Municipality and signed contracts for construction works or related
services from 7 August 2019 until 6 August 2021 was repeated. Panevezio statybos trestas AB was
on the top of the list and scored 90 points out of 100 possible.
85
Remuneration Report
The Remuneration Report of Panevezio statybos trestas AB has been prepared for the reporting
financial period of the year 2021. The report has been prepared in accordance with the Law on
Financial Reporting of Enterprises of the Republic of Lithuania, the Ordinary General Meeting of
Shareholders held on 29 April 2020 approved the Remuneration Policy for Top and Middle
Management Staff of Panevezio statybos trestas AB and the Extraordinary General Meeting of
Shareholders held on 9 April 2021 approved the Procedure for Awarding and Paying Remuneration
of Independent Board Members of Panevezio statybos trestas AB. The Consolidated Remuneration
Report for 2020 was approved at the General Meeting of Shareholders on 29 April 2021 together
with the Set of Financial Statements for 2020.
Remuneration of Board Members
As the Law on Companies of the Republic of Lithuania provides for the possibility to elect only one
either collegial supervision or management body, the collegial management body, the Board
performing the supervision function, and one-person management body, the Managing Director, are
set up at the Company.
Following the Law on Companies and Articles of Association of the parent Company, the Board
Members are appointed for the four-year term of office.
On 9 April 2021 the Extraordinary General Meeting of Shareholders approved the procedure for
awarding and paying remuneration of the independent members of the Board for their activities in
the Board. Remuneration (bonuses) is paid to the members of the Board, except for the independent
members of the Board, for their work by the decision of the General Meeting of Shareholders in
accordance with the Law on Companies of the Republic of Lithuania.
Remuneration Paid to Board Members
On 9 April 2021 the Extraordinary General Meeting of Shareholders elected the new Board of
Panevezio statybos trestas AB. The information on payments made to the members of the newly
elected Board over the year 2021 is presented below. The Extraordinary General Meeting of
Shareholders held on 9 April 2021 did not come to the decision to pay bonuses to the members of
the Board.
The amounts in the table are in Euros, before taxes.
Table 8. Information on remuneration of supervisory body members of the issuer in 2021:
Full name
Position
Monthly
remuneration of
independent
member of the
Board (Euros)
Remuneration
of independent
member of the
Board
total for 2021
(Euros)
Total income
from the
company for
2021 (Euros)
Justas Jasiunas
Chairman
-
-
62 899
Gvidas Drobuzas
Board Member
-
-
232 629
Kristina Maciuliene
Board Member
-
-
-
Vaidas Grincevicius*
Board Member
3 300
25 614
-
Lina Simaskiene*
Board Member
3 300
25 614
-
Total
6600
51229
295528
* independent member of the Board
The Company is not aware that the Board Members of the Board have received any remuneration
from other companies of Panevezio statybos trestas AB Group.
After the term of office for the Board expires, the Board Members are not entitled to any severance
pays.
86
Remuneration of Company’s Employees
The purpose of the remuneration policy is to increase the operation efficiency at the Company and
promote achievement of strategic objectives. The objective of the Company goal is to maximize the
efficiency of the reward programs in order to attract and motivate highly skilled employees who are
necessary for success in business.
Over the year 2021 the salary fund attributed to the Company's employees amounted to 13.405 mln.
Euros compared to 12.404 mln. Euros in 2020.
To attract high-level professionals to management positions, we aim to keep the remuneration close
to the market median of the country in which any company of the Group operates.
In general, the remuneration structure at the Company consists of two parts: Fixed Remuneration
Component (FRC) and Variable Remuneration Component (VRC). The FRC range limits are set
taking into account the remuneration trends in the market, research data and comparative market, i.e.
the market of the companies operating in Lithuania. The VRC is a tool for getting the Top and Middle
Management Staff directly interested in seeking for high performance of the Company, an instrument
to for creating policy and culture of the Company, clearly and accurately indicating what
achievements and contributions are valued/rewarded. The Variable Remuneration Component to the
Top and Middle Management Staff is paid once a year at the end of the financial year and is linked
to performance of the employee, team and/or company.
The Company does not provide for the possibility to restore variable remuneration.
The average monthly salary of employees (FRC and VRC) for the period 2017 through 2021b is
provided in the tables below.
Table 9. Average monthly salary for employees of the Group, Euros (before taxes)
Position category
2021
2020
2019
2018
2017
Average
salary
Average
salary
Average
salary **
Average
salary
Average
salary
Managing Director
8863
7626
Top Management Staff
5107
5323
4524
3887
4568
Middle Management Staff
4297
3478
3216
2630
3030
Specialists
2192
1806
1753
1244
1244
Workers
1380
1319
1322
980
917
Total
1800
1583
1569
1170
1109
** Salary adjustment due to changes in taxation in effect since beginning of 2019.
Table 10. Average monthly salary for employees of the Group, Euros (before taxes)
Position category
2021
2020
2019
2018
2017
Average
salary
Average
salary
Average
salary **
Average
salary
Average
salary
Top Management Staff
4482
3957
4083
3040
3193
Specialists
2167
1871
1752
1343
1261
Workers
1407
1363
1322
956
914
Total
1787
1622
1569
1148
1097
** Salary adjustment due to changes in taxation in effect since beginning of 2019.
Remuneration Structure for Managing Director and Top Management Staff
The Fixed Remuneration Component is determined considering the impact on general operation of
the Company, management scope, decision making, complexity of activities, knowledge and
experience. Remuneration determined in the Employment Contract, taking into account the level of
position and competence of the employee (conformity with the requirements for the position). The
Fixed Remuneration Component is paid on a monthly basis. The Fixed Remuneration Component of
the Top and Middle Management Staff is reviewed minimum every 12 months.
87
The new size of the FRC is determined/revised based on performance assessment of the Top and
Middle Management Staff. The PAD of the Top and Middle Management Staff may be changed by
the decision of the Board.
The Variable Remuneration Component is designed to promote achievement of the annual
objectives. The size of the VRC amounts to a fixed percentage of the annual result, which is
determined and approved by the Board. The Chief Executive Officer and directors of the Company
are assigned the percentage of the profit accepted for calculating motivation. For the Directors of the
branches the percentage is determined from the profit accepted for calculating motivation for the
branch managed by him.
Annual Changes in Remuneration
Changes in performance of the Company and average salary of the employees of the Company who
are not members of the management and supervisory bodies during the last five years.
Table 11. Company performance and average monthly gloss salary for the period 2017 through
2021
Company performance
2021
2020
2019 **
2018
2017
Net profit (loss) (thousands Euros)
304
-12,418
590
-4,852
194
Profit (loss) per share (Euros)
0,019
-0.76
0.036
-0.297
0.012
Assets (thousands Euros)
48,478
62,290
71,337
58,986
55,925
Average monthly salary
1,800
1,583
1,569
1,170
1,109
** Salary adjustment due to changes in taxation in effect since beginning of 2019.
Long-Term Motivation by Shares
The Company applies neither schemes under which the members of management bodies, managers
and employees receive remuneration in shares, share options or other rights to share acquisition, nor
supplementary pension or early retirement schemes.
Annex 1
Corporate Governance Reporting Form
Panevezio statybos trestas AB (hereinafter referred to as the “Company”), acting in compliance with Article
22 (3) of the Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of
Nasdaq Vilnius AB, hereby discloses how it complies with the Corporate Governance Code for the
Companies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In case of non-
compliance with this Code or some of its provisions or recommendations, the specific provisions or
recommendations that are not complied with must be indicated and the reasons for such non-compliance
must be specified. In addition, other explanatory information indicated in this form must be provided.
1. Summary of the Corporate Governance Report:
Panevezio statybos trestas AB in principle complies with the recommendatory Governance Code for the
companies listed at NASDAQ Vilnius. Referring to the Articles of Association of the Company, the
governance bodies of the Company include the General Shareholders’ Meeting, the Management Board and
the Managing Director. According to the Law on Companies of the Republic of Lithuania, either two
(supervisory and management) or one collegial management body may be set up in the Company at the
discretion of the Company. No Supervisory Board is set up in the Company. Following the Articles of
Association of the Company, the Management Board is set up of 5 members, which are elected for the period
of for years. The members of the Management Board represent the shareholders and perform the supervisory
and control functions. Only the Audit Committee, which is elected for the period of one year, is formed in
the Company. The functions of the Nomination and Remuneration Committees are performed by the
Management Board. The system of the corporate governance ensures fair treatment of all shareholders,
including minority and foreign shareholders, and protects the rights of the shareholders.
In its Annual Report, in accordance with the requirements of the legal acts, the Company provides
information on the total amounts of money calculated during the reporting period to the members of the
Management Board of the Company, the Chief Executive Officer.
The management system of the Company ensures that any information on all essential issues, including
financial situation, operation and company management, is disclosed in a timely and accurate manner.
The audit company is proposed by the Management Board and elected by the Meeting of Shareholders, thus
ensuring independence of the conclusions and opinion provided by the audit company.
2. Structured table for disclosure:
PRINCIPLES/ RECOMMENDATIONS
YES/NO/
NOT
APPLICABLE
COMMENTARY
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate
governance framework should protect the rights of shareholders.
89
1.1. All shareholders should be provided with
access to the information and/or documents
established in the legal acts on equal terms. All
shareholders should be furnished with equal
opportunity to participate in the decision-making
process where significant corporate matters are
discussed.
Yes
All information that shall be made public in
accordance with legal acts is published in
Lithuanian and English via informational system
of stock-exchange Nasdaq Vilnius and on the
website of the Company. The venue, date and
time of the Meeting of Shareholders convened by
the Company are chosen in such a way as to
ensure participation of all shareholders in the
decision-making process of the Company.
1.2. 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 of their holders.
Yes
The Company’s authorized share capital consists
of 16,350,000 ordinary shares, the nominal value
of 0.29 EUR each, which provide their holders
equal voting, property, dividend and other rights.
1.3. 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
The rights attached to the shares are indicated in
the Articles of Association of the Company,
which are published on the website of the
Company.
1.4. Exclusive transactions that are particularly
important to the company, such as transfer of all or
almost all assets of the company which in principle
would mean the transfer of the company, should be
subject to approval of the general meeting of
shareholders.
No
The Articles of Association of the Company do
not provide that the mentioned transactions are
subject to approval of the General Meeting of
Shareholders. The shareholders of the Company
approve the transactions for approval of which
they have the right prescribed by the Law on
Companies of the Republic of Lithuania and the
Articles of Association of the Company.
1.5. Procedures for convening and conducting a
general meeting of shareholders should provide
shareholders with equal opportunities to
participate in the general meeting of shareholders
and should not prejudice the rights and interests of
shareholders. The chosen venue, date and time of
the general meeting of shareholders should not
prevent active participation of shareholders at the
general meeting. In the notice of the general
meeting of shareholders being convened, the
company should specify the last day on which the
proposed draft decisions should be submitted at the
latest.
Yes
The Company convenes a General Meeting of
Shareholders in accordance with the procedure
established by the Law on Companies of the
Republic of Lithuania.
90
1.6. With a view to ensure the right of
shareholders living abroad to access the
information, it is recommended, where possible,
that documents prepared for the general meeting of
shareholders in advance should be announced
publicly not only in Lithuanian language but also
in English and/or other foreign languages in
advance. It is recommended that the minutes of the
general meeting of shareholders after the signing
thereof and/or adopted decisions should be made
available publicly not only in Lithuanian language
but also in English and/or other foreign languages.
It is recommended that this information should be
placed on the website of the company. Such
documents may be published to the extent that
their public disclosure is not detrimental to the
company or the company’s commercial secrets are
not revealed.
Yes
All information for investors, notices on
convocation of General Meetings of
Shareholders, drafts of resolutions and
documents proposed for the Meeting of
shareholders by the Management Board and
adopted resolutions and approved documents are
made public in Lithuanian and English languages
through the information system of NASDAQ
OMX Vilnius Stock Exchange and published on
the website of the Company.
1.7. Shareholders who are entitled to vote should
be furnished with the opportunity to vote at the
general meeting of shareholders both 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 at the meeting
in person or delegate the participation to some
other person.
The Company allows the shareholders voting by
filling the general voting ballot in as prescribed
by the law.
1.8. With a view to increasing the shareholders’
opportunities to participate effectively at general
meetings of shareholders, it is recommended that
companies should apply modern technologies on a
wider scale and thus provide shareholders with the
conditions to participate and vote in general
meetings of shareholders via electronic means of
communication. In such cases the security of
transmitted information must be ensured and it
must be possible to identify the participating and
voting person.
No
The Company does not comply with the
provisions of this recommendation, as it is not
possible to ensure text protection and identify the
signature of a voting person. Furthermore, in the
opinion of the Company, so far there was no need
for any modern technologies at the General
Meeting of Shareholders for the purposes of
participation and voting via electronic means of
communication.
91
1.9. It is recommended that the notice on the draft
decisions of the general meeting of shareholders
being convened should specify new candidatures
of members of the collegial body, their proposed
remuneration and the proposed audit company if
these issues are included into the agenda of the
general meeting of shareholders. Where it is
proposed to elect a new member of the collegial
body, it is recommended that the information about
his/her educational background, work experience
and other managerial positions held (or proposed)
should be provided.
Yes
Information on the candidates to the members of
the Management Board of the Company is
provided to the shareholders at the General
Meeting of Shareholders with the item related to
the election of the members of the Management
Board on the agenda in accordance with the
procedure established by the Law on Companies
of the Republic of Lithuania.
Information on the audit company to be elected
is made public together with the notice on the
draft resolutions of the General Meeting of
Shareholders to be convened in accordance with
the procedure prescribed by the legal acts.
1.10. Members of the company’s collegial
management body, heads of the administration
1
or
other competent persons related to the company
who can provide information related to the agenda
of the general meeting of shareholders should take
part in the general meeting of shareholders.
Proposed candidates to member of the collegial
body should also participate in the general meeting
of shareholders in case the election of new
members is included into the agenda of the general
meeting of shareholders.
Yes
The Managing Director, Chief Accountant,
Chairman and other competent persons who can
provide information on the agenda of the General
Meeting of Shareholders always participate at the
General Meeting of Shareholders. The proposed
candidates to the members of the Management
Board, however not all, participated at the
General Meeting of Shareholders.
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its
shareholders, accountability of this body to the shareholders and objective monitoring of the company’s
operations and its management bodies as well as constantly provide recommendations to the management
bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and
control system.
2.1.1. Members of the supervisory board should
act in good faith, with care and responsibility for
the benefit and in the interests of the company and
its shareholders and represent their interests,
having regard to the interests of employees and
public welfare.
Not applicable
As the Law on Companies of the Republic of
Lithuania provides for the possibility to elect
only one either collegial supervision or
management body, the collegial management
body, the Management Board performing the
supervision function, and one-person
management body, the Managing Director, are
set up in the Company. The collegial supervising
– the Supervisory Board is not formed.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management
positions.
92
2.1.2. Where decisions of the supervisory board
may have a different effect on the interests of the
company’s shareholders, the supervisory board
should treat all shareholders impartially and fairly.
It should ensure that shareholders are properly
informed about the company’s strategy, risk
management and control, and resolution of
conflicts of interest.
Not applicable
See item 2.1.1.
2.1.3. The supervisory board should be impartial
in passing decisions that are significant for the
company’s operations and strategy. Members of
the supervisory board should act and pass
decisions without an external influence from the
persons who elected them.
Not applicable
See item 2.1.1.
2.1.4. Members of the supervisory board should
clearly voice their objections in case they believe
that a decision of the supervisory board is against
the interests of the company. Independent2
members of the supervisory board should: a)
maintain independence of their analysis and
decision-making; b) not seek or accept any
unjustified privileges that might compromise their
independence.
Not applicable
See item 2.1.1.
2.1.5. The supervisory board should oversee that
the company’s tax planning strategies are designed
and implemented in accordance with the legal acts
in order to avoid faulty practice that is not related
to the long-term interests of the company and its
shareholders, which may give rise to reputational,
legal or other risks.
Not applicable
See item 2.1.1.
2.1.6. The company should ensure that the
supervisory board is provided with sufficient
resources (including financial ones) to discharge
their duties, including the right to obtain all the
necessary information or to seek independent
professional advice from external legal,
accounting or other experts on matters pertaining
to the competence of the supervisory board and its
committees.
Not applicable
See item 2.1.1.
2
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of
unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
93
2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest
and effective and fair corporate governance.
2.2.1. The members of the supervisory board
elected by the general meeting of shareholders
should collectively ensure the diversity of
qualifications, professional experience and
competences and seek for gender equality. With a
view to maintain a proper balance between the
qualifications of the members of the supervisory
board, it should be ensured that members of the
supervisory board, as a whole, should have diverse
knowledge, opinions and experience to duly
perform their tasks.
Not applicable
See item 2.1.1.
2.2.2. Members of the supervisory board should
be appointed for a specific term, subject to
individual re-election for a new term in office in
order to ensure necessary development of
professional experience.
Not applicable
See item 2.1.1.
2.2.3. Chair of the supervisory board should be a
person whose current or past positions constituted
no obstacle to carry out impartial activities. A
former manager or management board member of
the company should not be immediately appointed
as chair of the supervisory board either. Where the
company decides to depart from these
recommendations, it should provide information
on the measures taken to ensure impartiality of the
supervision.
Not applicable
See item 2.1.1.
2.2.4. Each member should devote sufficient time
and attention to perform his duties as a member of
the supervisory board. Each member of the
supervisory board should undertake to limit his
other professional obligations (particularly the
managing positions in other companies) so that
they would not interfere with the proper
performance of the duties of a member of the
supervisory board. Should a member of the
supervisory board attend less than a half of the
meetings of the supervisory board throughout the
financial year of the company, the shareholders of
the company should be notified thereof.
Not applicable
See item 2.1.1.
94
2.2.5. When t is proposed to appoint a member of
the supervisory board, it should be announced
which members of the supervisory board are
deemed to be independent. The supervisory board
may decide that, despite the fact that a particular
member meets all the criteria of independence,
he/she cannot be considered independent due to
special personal or company-related
circumstances.
Not applicable
See item 2.1.1.
2.2.6. The amount of remuneration to members of
the supervisory board for their activity and
participation in meetings of the supervisory board
should be approved by the general meeting of
shareholders.
Not applicable
See item 2.1.1.
2.2.7. Every year the supervisory board should
carry out an assessment of its activities. It should
include evaluation of the structure of the
supervisory board, its work organization and
ability to act as a group, evaluation of the
competence and work efficiency of each member
of the supervisory board, and evaluation whether
the supervisory board has achieved its objectives.
The supervisory board should, at least once a year,
make public respective information about its
internal structure and working procedures.
Not applicable
See item 2.1.1.
Principle 3: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate
governance with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the
implementation of the company’s strategy
approved by the supervisory board if the latter has
been formed at the company. In such cases where
the supervisory board is not formed, the
management board is also responsible for the
approval of the company’s strategy.
Yes
As there is no Supervisory Board formed at the
Company, the Management Board performs
supervisory functions, discusses and approves
the strategy of the Company, analyses and
evaluates information on implementation of the
strategy of the Company.
95
3.1.2. As a collegial management body of the
company, the management board performs the
functions assigned to it by the Law and in the
articles of association of the company, and in such
cases where the supervisory board is not formed in
the company, it performs inter alia the supervisory
functions established in the Law. By performing
the functions assigned to it, the management board
should take into account the needs of the
company’s shareholders, employees and other
interest groups by respectively striving to achieve
sustainable business development.
Yes
The Company follows the strategic plan of the
Company based on which the mission of the
management bodies of the Company is to create
and maintain a strong, competitive, financially
capable and technically advanced Company that
creates and maximizes the value for the
shareholders.
3.1.3. The management board should ensure
compliance with the laws and the internal policy of
the company applicable to the company or a group
of companies to which this company belongs. It
should also establish the respective risk
management and control measures aimed at
ensuring regular and direct liability of managers.
Yes
The Management Board ensures compliance
with the laws and internal policy of the Company
applicable to the Company or the Group.
3.1.4. Moreover, the management board should
ensure that the measures included into the OECD
Good Practice Guidance
3
on Internal Controls,
Ethics and Compliance are applied at the company
in order to ensure adherence to the applicable laws,
rules and standards.
Yes
The Management Board complies with this
recommendation.
3.1.5. When appointing the manager of the
company, the management board should take into
account the appropriate balance between the
candidate’s qualifications, experience and
competence.
Yes
When appointing the Chief Executive Officer,
the Board takes into account the candidate's
qualifications, experience and competence.
3.2. Formation of the management board
3.2.1. The members of the management board
elected by the supervisory board or, if the
supervisory board is not formed, by the general
meeting of shareholders should collectively ensure
the required diversity of qualifications,
professional experience and competences and seek
for gender equality. With a view to maintain a
proper balance in terms of the current
qualifications possessed by the members of the
management board, it should be ensured that the
members of the management board would have, as
a whole, diverse knowledge, opinions and
experience to duly perform their tasks.
Yes
The members of the Management Board of the
Company are elected by the General Meeting of
Shareholders. The members of the Management
Board of the Company are qualified and
competent to perform their functions, have a long
experience in management.
At present the Management Board fails to
maintain gender equality. All members of the
Management Board are male. At present females
make 40 per cents of the members of the
Management Board, i. e. two females and three
males.
96
3.2.2. Names and surnames of the candidates to
become members of the management board,
information on their educational background,
qualifications, professional experience, current
positions, other important professional obligations
and potential conflicts of interest should be
disclosed without violating the requirements of the
legal acts regulating the handling of personal data
at the meeting of the supervisory board in which
the management board or individual members of
the management board are elected. In the event that
the supervisory board is not formed, the
information specified in this paragraph should be
submitted to the general meeting of shareholders.
The management board should, on yearly basis,
collect data provided in this paragraph on its
members and disclose it in the company’s annual
report.
Yes
Information on the positions taken by the
members of the Management Board or their
participation in operation of other companies is
continuously collected and compiled, and at the
end of every year it is revised and presented in
the reports prepared by the Company.
3.2.3. All new members of the management board
should be familiarized with their duties and the
structure and operations of the company.
Yes
The new members of the Management Board
have been familiarised with their duties, the
structure, operations and strategy of the
Company.
3.2.4. Members of the management board should
be appointed for a specific term, subject to
individual re-election for a new term in office in
order to ensure necessary development of
professional experience and sufficiently frequent
reconfirmation of their status.
Yes
The Management Board of the Company is
elected by the General Meeting of Shareholders
for the maximal four-year term in office
prescribed by the Law on Companies of the
Republic of Lithuania. Individual members of
the Management Board or the entire
Management Board may be recalled by the
General Meeting of Shareholders before the end
of their term of office.
3.2.5. Chair of the management board should be a
person whose current or past positions constitute
no obstacle to carry out impartial activity. Where
the supervisory board is not formed, the former
manager of the company should not be
immediately appointed as chair of the management
board. When a company decides to depart from
these recommendations, it should furnish
information on the measures it has taken to ensure
the impartiality of supervision.
Yes
The Chairman of the Management Board
represents the main shareholder and has never
been the Chief Executive Officer of the
Company. The present Chairman of the
Management Board that has been elected on 9
April 2021 and the previous Chairman who was
in office till 9 April 2021, represent the main
shareholder and have never been the Chief
Executive Officers of the Company.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
97
3.2.6. Each member should devote sufficient time
and attention to perform his duties as a member of
the Management Board. Should a member of the
Management Board attend less than a half of the
meetings of the Management Board throughout the
financial year of the company, the Supervisory
Board of the company or, if the Supervisory Board
is not formed at the company, the General Meeting
of Shareholders should be notified thereof.
Yes
The members of the Management Board fulfil
their functions properly: actively participate at
the meetings of collegial body and devote
sufficient time to perform their duties as a
member of the collegial body.
In 2021 there were 12 (twelve) meetings of the
new Management Board elected on 9 April 2021.
All members of the Management Board
participated in these meetings.
The previous Management Board that was in
office till 9 April 2021, had 5 (five) meetings of
the Management Board, four members
participated in all five meetings and one member
participated in four meeting of the Management
Board.
3.2.7. In the event that the management board is
elected in the cases established by the Law where
the supervisory board is not formed at the
company, and some of its members will be
independent4, it should be announced which
members of the management board are deemed as
independent. The management board may decide
that, despite the fact that a particular member
meets all the criteria of independence established
by the Law, he/she cannot be considered
independent due to special personal or company-
related circumstances.
No
Two independent members of the Management
Board, Vaidas Grincevicius and Lina Simaskiene
were elected for the new term of office of the
Management Board on 9 April 2021. Prior to the
Meeting of Shareholders, it was published that
these two candidates for Board Membership
would be considered as independent Board
Members.
3.2.8. The general meeting of shareholders of the
company should approve the amount of
remuneration to the members of the management
board for their activity and participation in the
meetings of the management board.
Yes
On 9 April 2021 the Extraordinary General
Meeting of Shareholders approved the
Procedure for Awarding and Paying
Remuneration to Independent Board Members of
Panevezio statybos trestas AB for their Activities
in the Board.
The members of the Management Board, except
for the independent members of the Management
Board, are paid remuneration (bonuses) by the
decision of the General Meeting of Shareholders
in accordance with the Law on Companies of the
Republic of Lithuania.
4
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated
persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
98
3.2.9. The members of the management board
should act in good faith, with care and
responsibility for the benefit and the interests of
the company and its shareholders with due regard
to other stakeholders. When adopting decisions,
they should not act in their personal interest; they
should be subject to no-compete agreements and
they should not use the business information or
opportunities related to the company’s operations
in violation of the company’s interests.
Yes
Based on the data available to the Company, all
members of the Management Board act in good
will for the interests of the Company and its
shareholders, they are guided by the interests of
the Company and not those of their own or any
third parties, seek to maintain their independence
in decision-making.
3.2.10. Every year the management board should
carry out an assessment of its activities. It should
include evaluation of the structure of the
management board, its work organization and
ability to act as a group, evaluation of the
competence and work efficiency of each member
of the management board, and evaluation whether
the management board has achieved its objectives.
The management board should, at least once a
year, make public respective information about its
internal structure and working procedures in
observance of the legal acts regulating the
processing of personal data.
Yes/No
The internal documents of the Company do not
directly provide for an activity assessment of the
collegial bodies exercising individual
supervisory functions. However, the collegial
body ensures that its members are competent and
have a variety of knowledge, opinions and
experience to perform their tasks properly.
Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board
should ensure efficient operation and decision-making of these bodies and promote active cooperation between
the company’s management bodies.
4.1. The management board and the supervisory
board, if the latter is formed at the company, should
act in close cooperation in order to attain benefit
for the company and its shareholders. Good
corporate governance requires an open discussion
between the management board and the
supervisory board. The management board should
regularly and, where necessary, immediately
inform the supervisory board about any matters
significant for the company that are related to
planning, business development, risk management
and control, and compliance with the obligations at
the company. The management board should
inform he supervisory board about any derogations
in its business development from the previously
formulated plans and objectives by specifying the
reasons for this.
Not applicable
There is no Supervisory Board formed at the
Company.
99
4.2. It is recommended that meetings of the
company’s collegial bodies should be held at the
respective intervals, according to the pre-approved
schedule. Each company is free to decide how
often meetings of the collegial bodies should be
convened but it is recommended that these
meetings should be convened at such intervals that
uninterruptable resolution of essential corporate
governance issues would be ensured. Meetings of
the company’s collegial bodies should be
convened at least once per quarter.
Yes
The meetings of the Management Board of the
Company are held at least once a month in
accordance with the Rules of Procedures of the
Management Board.
The date of the next meeting of the Management
Board is agreed at each meeting of the
Management Board. If required, the meetings of
the Management Board are held at shorter
intervals.
4.3. Members of a collegial body should be
notified of the meeting being convened in advance
so that they would have sufficient time for proper
preparation for the issues to be considered at the
meeting and a fruitful discussion could be held and
appropriate decisions could be adopted. Along
with the notice of the meeting being convened all
materials 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
present at the meeting agree with such change or
supplement to the agenda, or certain issues that are
important to the company require immediate
resolution.
Yes
The members of the Management Board are
notified of the meeting being convened and its
agenda in advance. All members of the
Management Board get all materials relevant to
the issues on the agenda in advance and have an
opportunity to get familiarised with them and ask
questions before and during the meeting, have
the right to request to supplement or clarify the
materials relevant to the issue to be discussed.
4.4. In order to coordinate the activities of the
company’s collegial bodies and ensure effective
decision-making process, the chairs of the
company’s collegial supervision and management
bodies should mutually agree on the dates and
agendas of the meetings and close cooperate in
resolving other matters related to corporate
governance. Meetings of the company’s
supervisory board should be open to members of
the management board, particularly in such cases
where issues concerning the removal of the
management board members, their responsibility
or remuneration are discussed.
Not applicable
The Company does not have a Supervisory
Board.
100
Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or, where
the supervisory board is not formed, of the management board which performs the supervisory functions by
ensuring that decisions are based on due consideration and help organise its work in such a way that the decisions
it takes would be free of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and provide
the collegial body with recommendations concerning the decisions of the collegial body. However, the final
decision should be adopted by the collegial body.
5.1.1. Taking due account of the company-related
circumstances and the chosen corporate governance
structure, the supervisory board of the company or, in
cases where the supervisory board is not formed, the
management board which performs the supervisory
functions, establishes committees. It is recommended
that the collegial body should form the nomination,
remuneration and audit committees
5
.
No
The collegial body of the Company’s
management is the Management Board
performing the functions of Nomination
Committee and the Remuneration
Committees. The Management Board selects
and approves the candidacy of the Chief
Executive Officer of the Company –
Managing Director and agrees with the
candidacies of Directors of the Company
proposed by the Managing Director. The
Management Board continuously evaluates
their experience, professional capabilities and
implementation of the Company’s strategic
goals, hears out their reports. The Board
selects the candidate for the external auditor
and provides proposals to the General Meeting
of Shareholders for approval.
On 29 April 2021, the Audit Committee was
elected at the Annual General Meeting of
Shareholders.
5.1.2. Companies may decide to set up less than
three committees. In such case companies should
explain in detail why they have chosen the alternative
approach, and how the chosen approach corresponds
with the objectives set for the three different
committees.
Yes
5.1.3. In the cases established by the legal acts the
functions assigned to the committees formed at
companies may be performed by the collegial body
itself. In such case the provisions of this Code
pertaining to the committees (particularly those
related to their role, operation and transparency)
should apply, where relevant, to the collegial body as
a whole.
No
See the commentary on the recommendation
provided in item 5.1.1.
The recommendation is implemented to the
extent it is related to the activities of the Audit
Committee in the Company.
5
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of
Financial Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to
public limited liability companies whose securities are traded on a regulated market of the Republic of Lithuania and/or
of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the
exemptions where the functions of the audit committee may be carried out by the collegial body performing the
supervisory functions).
101
5.1.4. Committees established by the collegial
body should normally be composed of at least three
members. Subject to the requirements of the legal
acts, committees could be comprised only of two
members as well. Members of each committee should
be selected on the basis of their competences by
giving priority to independent members of the
collegial body. The chair of the management board
should not serve as the chair of committees.
Yes/No
See the commentary on the recommendation
provided in 5.1.1.
The recommendation is implemented to the
extent it is related to the activities of the Audit
Committee in the Company.
The Audit Committee is composed of three
members. Two members conform to the
requirements for independence. The Audit
Committee is elected for the period of one
year.
5.1.5. The authority of each committee formed
should be determined by the collegial body itself.
Committees should perform their duties according to
the authority delegated to them and regularly inform
the collegial body about their activities and
performance on a regular basis. The authority of each
committee defining its role and specifying its rights
and duties should be made public at least once a year
(as part of the information disclosed by the company
on its governance structure and practice on an annual
basis). In compliance with the legal acts regulating
the processing of personal data, companies should
also include in their annual reports the statements of
the existing committees on their composition, the
number of meetings and attendance over the year as
well as the main directions of their activities and
performance.
Yes/No
See the commentary on the recommendation
provided in item 5.1.1.
The Audit Committee follows the Rules of the
Audit Committee prepared by the committee
and approved by the General Meeting of
Shareholders. These rules define the
regulations specifying the rights and duties of
the Audit Committee, size of the Audit
Committee, term of office in the Audit
Committee, requirements for education,
professional experience and principles iof
independence.
The approved Rules of the Audit Committee
are published on the website of the Company.
In 2021, there were 3 meetings of the Audit
Committee held where all members of the
Audit Committee were present.
5.1.6. With a view to ensure the independence and
impartiality of the committees, the members of the
collegial body who are not members of the
committees should normally have a right to
participate in the meetings of the committee only if
invited by the committee. A committee may invite or
request that certain employees of the company or
experts would participate in the meeting. Chair of
each committee should have the possibility to
maintain direct communication with the shareholders.
Cases where such practice is to be applied should be
specified in the rules regulating the activities of the
committee.
Yes/No
See the commentary on the recommendation
provided in item 5.1.1.
The recommendation is implemented to the
extent it is related to the activities of the Audit
Committee in the Company.
102
5.2. Nomination committee
5.2.1. The key functions of the nomination
committee should be the following:
1) to select candidates to fill vacancies in the
membership of supervisory and management bodies
and the administration and recommend the collegial
body to approve them. The nomination committee
should evaluate the balance of skills, knowledge and
experience in the management body, prepare a
description of the functions and capabilities required
to assume a particular position and assess the time
commitment expected;
2) assess, on a regular basis, the structure, size and
composition of the supervisory and management
bodies as well as the skills, knowledge and activity of
its members, and provide the collegial body with
recommendations on how the required changes
should be sought;
3) devote the attention necessary to ensure succession
planning.
Not applicable
There is no Nomination Committee formed at
the Company.
The functions of the collegial body – the
Management Bord performs the functions of
the Nomination Committee. (See the
commentary on the recommendation provided
in item 5.1.1.).
5.2.2. When dealing with issues related to members
of the collegial body who have employment
relationships with the company and the heads of the
administration, the manager of the company should
be consulted by granting him/her the right to submit
proposals to the Nomination Committee.
Not applicable
5.3. Remuneration committee
The main functions of the remuneration committee
should be as follows:
1) submit to the collegial body proposals on the
remuneration policy applied to members of the
supervisory and management bodies and the heads of
the administration for approval. Such policy should
include all forms of remuneration, including the
fixed-rate remuneration, performance-based
remuneration, financial incentive schemes, pension
arrangements and termination payments as well as
conditions which would allow the company to
recover the amounts or suspend the payments by
specifying the circumstances under which it would be
expedient to do so;
2) submit to the collegial body proposals regarding
individual remuneration for members of the collegial
bodies and the heads of the administration in order to
ensure that they would be consistent with the
company’s remuneration policy and the evaluation of
the performance of the persons concerned;
Not applicable
There is no Remuneration Committee formed
at the Company. (See the commentary on the
recommendation provided in 5.1.1).
103
3) review, on a regular basis, the remuneration policy
and its implementation.
5.4. Audit committee
5.4.1. The key functions of the audit committee are
defined in the legal acts regulating the activities of
the audit committee
6
.
Yes
The Company implements this
recommendation.
On 29 April 2020, the Audit Committee was
elected at the Annual General Meeting of
Shareholders. The Audit Committee is
composed of three members, two of which
conform to the requirements for independence.
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of
Shareholders.
5.4.2. All members of the committee should be
provided with detailed information on specific issues
of the company’s accounting system, finances and
operations. The heads of the company’s
administration should inform the audit committee
about the methods of accounting for significant and
unusual transactions where the accounting may be
subject to different approaches.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of
Shareholders.
All members of the Committee are provided
with detailed information on specific issues of
the accounting system, finances and
operations of the Company.
5.4.3. The audit committee should decide whether
the participation of the chair of the management
board, the manager of the company, the chief finance
officer (or senior employees responsible for finance
and accounting), the internal and external auditors in
its meetings is required (and, if required, when). The
committee should be entitled, when needed, to meet
the relevant persons without members of the
management bodies present.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of
Shareholders.
5.4.4. The audit committee should be informed
about the internal auditor’s work program and should
be furnished with internal audit reports or periodic
summaries. The audit committee should also be
informed about the work program of external
auditors and should receive from the audit firm a
report describing all relationships between the
independent audit firm and the company and its
group.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of
Shareholders. The Audit Committee is
provided with the information mentioned
listed herein from independent audit firm.
No internal audit function exists at the
Company/Group.
6
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the
Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of
Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the
Bank of Lithuania.
104
5.4.5. The audit committee should examine whether
the company complies with the applicable provisions
regulating the possibility of lodging a complaint or
reporting anonymously his/her suspicions of
potential violations committed at the company and
should also ensure that there is a procedure in place
for proportionate and independent investigation of
such issues and appropriate follow-up actions.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of
Shareholders.
5.4.6. The audit committee should submit to the
supervisory board or, where the supervisory board is
not formed, to the management board its activity
report at least once in every six months, at the time
that annual and half-yearly reports are approved.
Yes
The Audit Committee makes analysis of ang
gives evaluation to the financial statements of
the Company, gives recommendations on their
approval to the Management Board together
with the reports on their activity over the
period.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management
bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of
interest related to members of the supervisory and management bodies.
The Corporate Governance Framework should recognize the rights of stakeholders as established by law and
encourage active co-operation between companies and stakeholders in creating the company value, jobs and
financial sustainability. In the context of this principle the concept “stakeholders” includes investors, employees,
creditors, suppliers, clients, local community and other persons having certain interests in the company
concerned.
Any member of the company’s supervisory and
management body should avoid a situation where
his/her personal interests are or may be in conflict
with the company’s interests. In case such a situation
did occur, a member of the company’s supervisory or
management body should, within a reasonable
period of time, notify other members of the same
body or the body of the company which elected
him/her or the company’s shareholders of such
situation of a conflict of interest, indicate the nature
of interests and, where possible, their value.
Yes
Members of the management bodies of the
Company behave in such a way that there is no
conflict of interest with the Company. During
the reporting period, there have been no known
conflict of interest between the Company and
the member of its management body.
Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the company
should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial
bodies and heads of the administration, in addition it should ensure the publicity and transparency of the
company’s remuneration policy and its long-term strategy.
105
7.1. The company should approve and post the
remuneration policy on the website of the company;
such policy should be reviewed on a regular basis
and be consistent with the company’s long-term
strategy.
Yes
The Company has prepared the draft of revised
Remuneration Policy, which is subject to the
approval at the coming General Meeting of
Shareholders.
7.2. The remuneration policy should include all
forms of remuneration, including the fixed-rate
remuneration, performance-based remuneration,
financial incentive schemes, pension arrangements
and termination payments as well as the conditions
specifying the cases where the company can recover
the disbursed amounts or suspend the payments.
Yes
The Remuneration Policy of the Company
defines the renumeration components and
established the principles of its award and
payment.
7.3. With a view to avoid potential conflicts of
interest, the remuneration policy should provide that
members of the collegial bodies which perform the
supervisory functions should not receive
remuneration based on the company’s performance.
Yes
Remuneration policy is intended to establish
only the principles of remuneration of top and
middle management staff.
See item 3.2.8.
7.4. The remuneration policy should provide
sufficient information on the policy regarding
termination payments. Termination payments should
not exceed a fixed amount or a fixed number of
annual wages and in general should not be higher
than the non-variable component of remuneration for
two years or the equivalent thereof. Termination
payments should not be paid if the contract is
terminated due to inadequate performance.
Yes
The Company complies with this
recommendation in accordance with the
provisions of the Labour Code of the Republic
of Lithuania within the limits established
therein.
7.5. In the event that the financial incentive scheme
is applied at the company, the remuneration policy
should contain sufficient information about the
retention of shares after the award thereof. Where
remuneration is based on the award of shares, shares
should not be vested at least for three years after the
award thereof. After vesting, members of the
collegial bodies and heads of the administration
should retain a certain number of shares until the end
of their term in office, subject to the need to
compensate for any costs related to the acquisition of
shares.
Not applicable
There is no scheme anticipating remuneration
of the directors in shares, share options or any
other right to purchase shares.
106
7.6. The company should publish information about
the implementation of the remuneration policy on its
website, with a key focus on the remuneration policy
in respect of the collegial bodies and managers in the
next and, where relevant, subsequent financial years.
It should also contain a review of how the
remuneration policy was implemented during the
previous financial year. The information of such
nature should not include any details having a
commercial value. Particular attention should be
paid on the major changes in the company’s
remuneration policy, compared to the previous
financial year.
Yes
The Company publishes information about the
implementation of the remuneration policy in
the Annual Report.
7.7. It is recommended that the remuneration policy
or any major change of the policy should be included
on the agenda of the general meeting of shareholders.
The schemes under which members and employees
of a collegial body receive remuneration in shares or
share options should be approved by the general
meeting of shareholders.
No
The Company does not apply any schemes
under which members and employees of a
collegial body receive remuneration in shares
or share options.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or
mutual agreements and encourage active cooperation between companies and stakeholders in creating the
company value, jobs and financial sustainability. In the context of this principle the concept “stakeholders”
includes investors, employees, creditors, suppliers, clients, local community and other persons having certain
interests in the company concerned.
8.1. The corporate governance framework should
ensure that the rights and lawful interests of
stakeholders are protected.
Yes
The Company protects all rights of the
stakeholders, allows the stakeholders to
participate in corporate governance in the
manner prescribed by law.
8.2. The corporate governance framework should
create conditions for stakeholders to participate in
corporate governance in the manner prescribed by
law. Examples of participation by stakeholders in
corporate governance include the participation of
employees or their representatives in the adoption of
decisions that are important for the company,
consultations with employees or their
representatives on corporate governance and other
important matters, participation of employees in the
company’s authorized capital, involvement of
creditors in corporate governance in the cases of the
company’s insolvency, etc.
Yes
The Company complies with this
recommendation.
For example, the Company has a Co-operation
Agreement signed with the Works Council.
According to the signed agreement, the
Company informs the representatives of the
Council about the financial position of the
Company, employer’s status, expected
changes, etc.
107
8.3. Where stakeholders participate in the corporate
governance process, they should have access to
relevant information.
Yes
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 relevant
information and vote in adopting decisions.
8.4. Stakeholders should be provided with the
possibility of reporting confidentially any illegal or
unethical practices to the collegial body performing
the supervisory function.
Yes
The stakeholders may submit anonymous
reports to the collegial body.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material
corporate issues, including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure
on confidential information and commercial secrets
and the legal acts regulating the processing of
personal data, the information publicly disclosed by
the company should include but not be limited to the
following:
9.1.1. operating and financial results of the
company;
Yes
The operating and financial results of the
Company are made public in the Intermediate
Semi-annual and Annual Reports of the
Company on the website of the Company and
on the website of stock-exchange Nasdaq
Vilnius.
9.1.2. objectives and non-financial information of
the company;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.1.3. persons holding a stake in the company or
controlling it directly and/or indirectly and/or
together with related persons as well as the structure
of the group of companies and their relationships by
specifying the final beneficiary;
Yes
All information available to the Company is
published in the Intermediate Semi-annual and
Annual Reports of the Company.
9.1.4. members of the company’s supervisory and
management bodies who are deemed independent,
the manager of the company, the shares or votes held
by them at the company, participation in corporate
governance of other companies, their competence
and remuneration;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.1.5. reports of the existing committees on their
composition, number of meetings and attendance of
members during the last year as well as the main
directions and results of their activities;
Yes
Information on composition, number of
meeting and attendance of members of the
existing committees is published in the
Intermediate Semi-annual and Annual Reports
of the Company.
108
9.1.6. potential key risk factors, the company’s risk
management and supervision policy;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.1.7. the company’s transactions with related
parties;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.1.8. main issues related to employees and other
stakeholders (for instance, human resource policy,
participation of employees in corporate governance,
award of the company’s shares or share options as
incentives, relationships with creditors, suppliers,
local community, etc.);
No
The Company does not apply any schemes
under which employees receive remuneration
in shares, share options or other rights to share
acquisition.
9.1.9. structure and strategy of corporate
governance;
Yes/No
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.1.10. initiatives and measures of social
responsibility policy and anti-corruption fight,
significant current or planned investment projects.
This list is deemed minimum and companies are
encouraged not to restrict themselves to the
disclosure of information included into this list. This
principle of the Code does not exempt companies
from their obligation to disclose information as
provided for in the applicable legal acts.
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the
Company.
9.2. When disclosing the information specified in
paragraph 9.1.1 of recommendation 9.1, it is
recommended that the company which is a parent
company in respect of other companies should
disclose information about the consolidated results
of the whole group of companies.
Yes
The Company complies with the
recommendation and discloses information
about the results of the Company and the Group
of its subsidiaries. The information is published
in the Intermediate Semi-annual and Annual
Reports of the Company.
9.3. When disclosing the information specified in
paragraph 9.1.4 of recommendation 9.1, it is
recommended that the information on the
professional experience and qualifications of
members of the company’s supervisory and
management bodies and the manager of the company
as well as potential conflicts of interest which could
affect their decisions should be provided. It is further
recommended that the remuneration or other income
of members of the company’s supervisory and
management bodies and the manager of the company
should be disclosed, as provided for in greater detail
in Principle 7.
Yes
The information specified in the
recommendation in provided in the Annual and
Semi-annual Reports of the Company.
109
9.4. Information should be disclosed in such
manner that no shareholders or investors are
discriminated in terms of the method of receipt and
scope of information. Information should be
disclosed to all parties concerned at the same time.
Yes
The Company discloses the information via the
information disclosure system used by the
Vilnius Stock Exchange in the Lithuanian and
English languages simultaneously. The
Company does not disclose the information
likely to impact the price of the issued by it
securities in its comments, interviews or
otherwise by the time such information is
announced via the information system of the
Stock Exchange.
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the
audit firm.
10.1. With a view to obtain an objective opinion on
the company’s financial condition and financial
results, the company’s annual financial statements and
the financial information provided in its annual report
should be audited by an independent audit firm.
Yes
The independent audit company performs
auditing of the individual and consolidated
(the Group) annual financial statements of the
Company and its subsidiaries in accordance
with the International Accounting Standards
applicable in the European Union. The
independent audit company evaluates
conformity of the Annual Report to the
audited Financial Statements.
10.2. It is recommended that the audit firm would be
proposed to the general meeting of shareholders by the
supervisory board or, if the supervisory board is not
formed at the company, by the management board of
the company.
Yes
The Management Board proposes an audit
firm to the General Meeting of Shareholders.
10.3. In the event that the audit firm has received
remuneration from the company for the non-audit
services provided, the company should disclose this
publicly. This information should also be available to
the supervisory board or, if the supervisory board is
not formed at the company, by the management board
of the company when considering which audit firm
should be proposed to the general meeting of
shareholders.
Yes
In 2021, the firm of auditors provided no
services other than auditing.