CONFIRMATION OF THE COMPANY’S RESPONSIBLE PERSONS
This confirmation of responsible employees concerning the audited Separate Financial Statements
and Consolidated Annual Report, Corporate Governance Report, Consolidated Social Responsi-
bility and Remuneration Report of Panevezio statybos trestas AB for the year 2023 is presented
in accordance with the Law on Securities of the Republic of Lithuania and the Rules for Prepara-
tion and Presentation of Periodic and Additional Information approved by the Resolution of the
Board of the Bank of Lithuania.
Hereby we confirm that, as to our knowledge, the presented Separate Financial Statements, which
have been prepared in accordance with International Financial Reporting Standards as adopted by
the European Union, give a true and fair view of financial position, profit or loss and cash flows
of Panevezio statybos trestas AB, and that the Consolidated Annual Report, Governance, Con-
solidated Social Responsibility and Remuneration Reports fairly state the review of business de-
velopment and activities, the Company’s position, and description of the main risks and uncer-
tainties that are faced.
Panevezio statybos trestas AB Panevezio statybos trestas AB
Managing Director Chief Accountant
Tomas Stukas Danguole Sirvinskiene
9 April 2024 9 April 2024
Panevėžio Statybos Trestas AB
Separate Financial Statements for the year 2023
prepared in accordance with International Finan-
cial Reporting Standards as adopted in the Euro-
pean Union, presented together with the Annual
Report
2
AB „Panevėžio statybos trestas“
Separate Financial Statements
Content
Information about the Company 3
Statement of comprehensive income 4
Statement of Financial Position 5
Statement of changes in equity 7
Statement of Cash Flows 8
Notes to the Financial Statements 9
Company’s and Consolidated Annual Report, Governance Report,
Consolidated Report of Social Responsibility and Remuneration
Report 47
Annex 1 Corporate Governance Reporting Form 69
Annex 2 Social Responsibility and Sustainability Report 91
3
AB „Panevėžio statybos trestas“
Separate Financial Statements
Information about the Company
Panevėžio Statybos Trestas AB
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 (01/01/2023-29/10/2023)
Darijus Vilčinskas (30/10/2023-31/12/2023)
Management
Egidijus Urbonas, Managing Director (01/01/2023-30/07/2023)
Tomas Stukas, Managing Director (31/07/2023-31/12/2023)
Auditor
Grant Thornton Baltic UAB
Banks
Luminor bank AS
SEB bank AB
Swedbank AB
OP Corporate Bank plc Lithuania
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
4
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of comprehensive income
For the year ended December 31
EUR thousand
Note
2023
2022
Revenue from contracts with customers
5
80,751
79,222
Cost of sales
6
(76,909)
(77,066)
Gross profit
3,842
2,156
Other revenue
10
1,351
1,432
Selling expenses
7
(390)
(337)
Administrative expenses, total:
8
(7,673)
(6,797)
Impairment loss (reversal) on trade debts, contract assets
and other receivables
30
100
Other administrative expenses
(7,703)
(6,897)
Other expenses
10
(759)
(620)
Operating profit (loss)
(3,629)
(4,166)
Finance income, total
11
1,293
2,188
Interest income
428
231
Reverse of interest charged by the Competition Council
11
0
1,133
Other finance income
865
824
Finance expense, total:
11
(383)
(126)
Interest expenses
(375)
(102)
Other finance expense
(8)
(24)
Profit (loss) before tax
(2,719)
(2,104)
Income tax expenses (benefit)
12
440
384
Net profit (loss)
(2,279)
(1,720)
Other comprehensive income
Items that will never be transferred to profit/(loss)
0
1,029
Non-current asset revaluation impact
0
1,211
Deferred income tax on revaluation of non-current assets
0
(182)
Items that will be transferred to profit (loss)
-
Other comprehensive income, total
0
1029
Total comprehensive income (loss)
(2,279)
(691)
Basic earnings (loss) per share (EUR)
31
(0.14)
(0.11)
Notes disclosed in pages 9–46 are an integral part of these financial statements.
Managing director Tomas Stukas 09/04/2024
Chief accountant Danguolė Širvinskienė 09/04/2024
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
5
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Financial Position
As at 31 December
EUR thousand
Note
2023
2022
ASSETS
Non-current assets
Property, plant and equipment
13
3,966
4,051
Intangible Assets
14
150
164
Investment Property
15
3,926
3,741
Right of use assets
26
457
691
Investments in subsidiaries
16
2,850
5,977
Loans granted
17
6,378
5,954
Non-current trade receivables
4, 19
1
114
Other non-current financial assets
548
535
Deferred tax assets
12
891
451
Total non-current assets
19,167
21,678
Current assets
Inventories
18
4,634
5,267
Trade receivables
4, 19
13,757
14,232
Contract assets
4, 19
2,531
4,104
Prepayments
1,050
706
Loans granted
17
1,427
1,358
Other current assets
20
36
404
Prepaid income tax
0
0
Cash and cash equivalents
21
5,125
5,013
Total current assets
28,560
31,084
TOTAL ASSETS
47,727
52,762
Notes disclosed in pages 9–46 are an integral part of these financial statements.
Managing Director Tomas Stukas 09/04/2024
Chief Accountant Danguolė Širvinskienė 09/04/2024
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
6
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of financial position (continued)
As at 31 December
EUR thousand
Note
2023
2022
EQUITY AND LIABILITIES
Equity
Issued capital
22
4,742
4,742
Reserves
22
2,296
2,509
Retained earnings
12,131
14,197
Total equity
19,169
21,448
Non-current liabilities
Debt to the Competition Council
3,017
0
Warranty provisions
25
270
471
Deferred tax liability
12
0
0
Pension fund provision
25
81
87
Non-current lease liabilities
26
225
408
Total non-current liabilities
3,593
966
Current liabilities
Loans
23
4,120
0
Current lease liabilities
26
259
296
Trade payables
24
14,595
13,979
Contract liability
27
915
3,630
Provisions
19, 25, 27
306
208
Other liabilities
19, 27
4,770
12,235
Total current liabilities
24,965
30,348
Total liabilities
28,558
31,314
TOTAL EQUITY AND LIABILITIES
TOTAL
47,727
52,762
Notes disclosed in pages 9–46 are an integral part of these financial statements.
Managing director Tomas Stukas 09/04/2024
Chief accountant Danguolė Širvinskienė 09/04/2024
Company code: 147732969
Address: P. Puzino st. 1, LT-35173 Panevėžys
7
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 December 2022
4,742
475
2,034
14,197
21,448
Net profit (loss)
-
-
(2,279)
(2,279)
Total comprehensive income for the year
-
-
(2,279)
(2,279)
Depreciation of revalued assets
-
-
(212)
213
1
Balance as at 31 December 2023
4,742
475
1,822
12,131
19,170
Balance as at 31 December 2021
4,742
475
1,137
15,785
22,139
Net profit (loss)
-
-
-
(1,720)
(1,720)
Revaluation reserve
-
1,029
-
1,029
Total comprehensive income for the year
-
-
1,029
(1,720)
(691)
Depreciation of revalued assets
-
-
(132)
132
-
Balance as at 31 December 2022
4,742
475
2,034
14,197
21,448
Notes disclosed in pages 9–46 are an integral part of these financial statements.
Managing director Tomas Stukas 09/04/2024
Chief accountant Danguolė Širvinskienė 09/04/2024
8
AB „Panevėžio statybos trestas“
Separate Financial Statements
Statement of Cash Flows
For the year ended December 31
EUR thousand
Note
2023
2022
Cash flows from operating activities
Net profit (loss)
(2,279)
(1,720)
Adjustments to:
Depreciation and amortisation
13, 14
670
786
Result from disposal of property, plant and equipment
(45)
(26)
Income tax expenses (benefit)
12
(440)
(384)
Financing activities
11
(1,026)
(989)
Other non-cash items
(627)
(305)
Net cash flows from operating activities before changes in work-
ing capital
(3,747)
(2,638)
Changes in working capital:
Changes in non-current receivables
241
352
Changes in inventories
18
617
(784)
Changes in trade receivables and contract assets
19
2,232
(3,586)
Changes in prepayments
(353)
514
Changes in other assets
366
(228)
Changes in trade payables
24
616
2,167
Change in contract liabilities (prepayments received)
19
(755)
473
Changes in other liabilities
(5,974)
2,496
Income tax paid
-
-
Net cash flows from operating activities
(6,757)
(1,234)
Cash flows used in investing activities
Acquisition of intangible assets and property, plant and equipment
13, 14
(640)
(140)
Disposal of property, plant and equipment
71
28
Recovery of Investments
3,108
0
Loans granted
28
0
(292)
Collection of loans granted
24
415
Dividends received
11
854
804
Interest received
11
1
32
Net cash flows used in investing activities
3,418
847
Cash flows from/used in financing activities
Dividends paid*
0
(1)
Loans received (overdraft)
4, 23
26,853
12,961
Loans repaid (overdraft)
4, 23
(22,733)
(12,961)
Lease obligations
26
(323)
(306)
Interest paid
4
(345)
(88)
Net cash flows from/used in financing activities
3,452
(395)
Net increase/(decrease) in cash and cash equivalents
113
(782)
Effect of foreign exchange on cash
Cash and cash equivalents as at January 1
21
5,013
5,795
Cash and cash equivalents as at December 31
21
5,126
5,013
* There were no dividend payments in 2023 and 2022.
Notes disclosed in pages 9–46 are an integral part of these financial statements.
Managing director Tomas Stukas 09/04/2024
Chief accountant Danguolė Širvinskienė 09/04/2024
9
AB „Panevėžio statybos trestas“
Separate Financial Statements
Notes to the Financial Statements
1. General information
Panevėžio Statybos Trestas AB (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 2023, the Company had
491 employee (as at 31 December 2022, 537 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 2023 and 2022, the principal shareholders of the Company were as follows:
• Hisk AB, S. Kerbedžio st. 7, Panevėžys, company code 147710353, (49.78%) (ultimate controlling
shareholder);
• Clairmont Holdings LTD, Grigori Afxentiou, 27 P.O.6021, CY (4.85%);
• The freely traded shares, owned by natural and legal persons (45.38%). 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 9 April 2024.
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:
10
AB „Panevėžio statybos trestas“
Separate Financial Statements
2. Basis of preparation (continued)
• Note 12: deferred taxes 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 uti-
lised.
• 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. The Company’s real estate appraisal was carried
out when preparing these financial statements,
• 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 27: 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 judgements are to predict the outcome of litigations. Provisions are not
recognised in the financial statements as based on the management judgement 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.
3. Summary of Significant Accounting Policies
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 2023.
(a) Standards, their amendments and interpretations effective for annual periods beginning on or
after 1 January 2023.
New standards, amendments and interpretations that are not mandatory for reporting period beginning on
1 January 2023 and have not been early adopted when preparing these financial statements are presented
below:
IFRS 17 and IFRS 4: Deferral of the effective date of IFRS 17 and IFRS 9 for insurers (issued on
25 June 2020 with effective date of 1 January 2023)
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
11
AB „Panevėžio statybos trestas“
Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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 finan-
cial statements.
IFRS 17 Insurance Contracts (issued on 18 May 2017 with effective date of 1 January 2023).
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 IASB 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 Standard will not have any impact on the financial position or performance of the 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).
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 are effec-
tive for reporting periods beginning on or after 1 January 2023.
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).
The amendments effective for reporting periods beginning on or after 1 January 2023. The amendments
provide guidance on the application of materiality judgements to accounting policy disclosures. In par-
ticular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ 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.
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).
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 became effective for annual reporting periods beginning on or after
1 January 2023 and apply to changes in accounting policies and changes in accounting estimates that
occur on or after the start of that period.
(b) Standards issued but not yet effective and not early adopted and their 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 2024).
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
12
AB „Panevėžio statybos trestas“
Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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 eval-
uated the impact of the implementation of these amendments.
Amendments to IAS 1 “Non-current Liabilities with Covenants” (issued on 31 October 2022 with effective
date of 1 January 2024):
Modify the requirements introduced by Classification of Liabilities as Current or Non-current on how the
Company classifies debt and other financial liabilities as current or non-current in particular circum-
stances: Only covenants with which the Company is required to comply on or before the reporting date
affect the classification of a liability as current or non-current. In addition, the Company has to disclose
information in the notes that enables users of financial statements to understand the risk that non-current
liabilities with covenants could become repayable within twelve months. The amendments are effective
for reporting periods beginning on or after 1 January 2024. The amendments are applied retrospectively
in accordance with IAS 8 and earlier application is permitted. The management has not yet evaluated the
impact of the implementation of these amendments.
Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” with amendments that clarify
how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the require-
ments in IFRS 15 to be accounted for as a sale (issued on 22 September 2022 with effective date of 1
January 2024).
Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” require a seller-lessee to subsequently
measure lease liabilities arising from a leaseback in a way that it does not recognise any amount of the
gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee
from recognising in profit or loss any gain or loss relating to the partial or full termination of a lease. The
amendments become effective for annual reporting periods beginning on or after 1 January 2024 with
earlier application permitted. A seller-lessee applies the amendments retrospectively in accordance with
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and leaseback transac-
tions entered into after the date of initial application. The management has not yet evaluated the impact
of the implementation of these amendments.
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements (issued in May 2023 with effec-
tive date of 1 January 2024, with earlier application permitted):
The amendments Supplier Finance Arrangements supplement IAS 7 Statement of Cash Flows and require
an entity to disclose the terms and conditions of supplier finance arrangements. The amendments also add
supplier finance arrangements as an example within the liquidity risk disclosure requirements in IFRS 7
Financial Instruments: Disclosures. The amendments have not yet been endorsed by the EU. The man-
agement has not yet evaluated the impact of the implementation of these amendments.
Amendments to IAS 21: Lack of Exchangeability (issued in August 2023 with effective date of 1 Jan-
uary 2025, with earlier application permitted):
The amendments Lack of Exchangeability supplement IAS 21 The Effects of Changes in Foreign Ex-
change Rates and require entities to apply a consistent approach in assessing whether a currency can be
exchanged into another currency and, when it cannot, in determining the exchange rate to use and the
disclosures to provide. The amendments have not yet been endorsed by the EU. The management has not
yet evaluated the impact of the implementation of these amendments.
13
AB „Panevėžio statybos trestas“
Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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.
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 2023 and 2022, 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 2023 and 2022, the Company did not
have such financial instruments.
(d) At fair value through profit or loss. As at 31 December 2023 and 2022, 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
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
(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. Gain or loss is recognised in the statement of comprehen-
sive income when the asset is derecognised, modified or impaired.
The Company’s financial assets at amortised cost includes trade, other current and non-current receiva-
bles, loans granted.
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
all contractual cash flows and all the cash flows that the Company expects to receive, discounted at the
approximate original effective interest rate. ECLs are recognised 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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.
Subsequent measurement
The 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 written off or amortised. Amortised cost is calculated by reference to the discount or premium
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
expired. 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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.
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 component is written-
off. 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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.
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.
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
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
3.6 Leased Assets and Lease Liabilities (continued)
• 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.
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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
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.
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.
In the statement of cash flows, cash and cash equivalents are considered to be cash in the current bank
accounts and deposits the terms of which on the day of signing the contract are no less than three 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 flows from continuing use that are largely independent of the cash flows 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
3.12 Provisions (continued)
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.
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. These include salaries and wages, social security contributions, bonuses, paid holidays and
other benefits.
3.14 Revenue
Revenue from contracts with customers
The Company’s primary business activity is the construction of buildings, structures, plant and equipment
and communication 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 vari-
able 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 the customer and is exposed to the risk
of default;
- the entity 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
3.14 Revenue (continued)
When the outcome of a contract cannot be estimated reliably (for example, in the early stages of a con-
tract), 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 obli-
gation that is partially satisfied at the date of the contract modification. The effect that the contract mod-
ification has on the transaction price, and on the Company's measure of progress towards complete satis-
faction 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.
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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
3.15 Income Tax (continued)
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 liability method. Deferred tax is recognised, providing for tempo-
rary 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.
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 carrying
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 Company 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.
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Separate Financial Statements
3. Summary of Significant Accounting Policies (continued)
3.18 Determination of Fair Value (continued)
In 2023 and 2022, 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 all 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:
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.
24
AB „Panevėžio statybos trestas“
Separate Financial Statements
4. Financial Risk Management (continued)
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.
25
AB „Panevėžio statybos trestas“
Separate Financial Statements
4. Financial Risk Management (continued)
The maximum exposure to credit risk is set out below:
(EUR thousand)
2023
2022
Trade Receivables and Contract Assets
16,289
18,450
Loans granted
7,805
7,312
Cash and cash equivalents
5,125
5,013
Total
29,219
30,775
Trade receivables and contract assets:
(EUR thousand)
2023
2022
Municipalities and state institutions
1,268
6,266
Legal persons
15,021
12,184
Total trade receivables and contract assets
16,289
18,450
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)
2023
%
2022
%
Client 1
4,212
25.9
3,635
19.8
Customer No 2
3,122
19.2
2,028
11.0
Customer No 3
1,142
7.0
1,848
10.0
Customer No 4
1,116
6.8
1,685
9.1
Customer No 5
747
4.6
644
3.5
Customer No 6
718
4.4
620
3.4
Customer No 7
441
2.7
534
2.9
Other customers
4,847
29.7
7,582
41.0
Impairment
(56)
(0.3)
(126)
(0.7)
Total
16,289
100
18,450
100
Breakdown of trade receivables and contract assets by geographic regions:
(EUR thousand)
2023
2022
Local market (Lithuania)
16,276
18,294
Latvia
0
153
Other
13
3
Total
16,289
18,450
Ageing of (gross) trade receivables as at the reporting date can be specified as follows:
(EUR thousand)
2023
Impairment
2022
Impairment
Not overdue
13,627
15,931
Overdue 0-30 days
1,117
1,142
Overdue 30-90 days
813
1,255
More than 90 days
788
56
248
126
Total
16,345
56
18,576
126
The Company establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade receivables.
26
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.
Following removal of the subsidiary OOO Baltlitstroj from the register on 25 November 2022, the Com-
pany’s other current assets were written off,
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 2023, the management considers that
there is no 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;
On 20 February 2023, the agreement was signed with the Tax Authority on the payment of the fine im-
posed in equal instalments over period of four years. The fee payable to the Competition Council is ac-
counted for under the non-current and current liabilities.
Payment terms of financial liabilities, including calculated interest, as to the agreements, as at 31 Decem-
ber 2023 are presented below:
(EUR thousand)
Carrying
amount
Contractual net cash
flows
Up to 6
months
More than 6
months
Liabilities
Trade payables
14,595
14,595
14,595
0
Lease liabilities
484
493
134
359
Overdraft
4,120
4,253
4,253
0
Liabilities related to the fine imposed by the Competition
Council
4,409
4,671
772
3,899
Total
23,608
24,012
19,754
4,258
Payment terms of financial liabilities, including calculated interest, as to the agreements, as at 31 Decem-
ber 2022 are presented below:
(EUR thousand)
Carrying
amount
Contractual net cash
flows
Up to 6
months
More than 6
months
Liabilities
Trade payables
13,979
13,979
13,979
0
Lease liabilities
704
704
146
558
Liabilities related to the fine imposed by the Competition
Council*
5,775
5,775
5,775
0
20,458
20,458
19,900
558
* The full amount of the fine is presented as payable within six months, as, when preparing these financial statements, the
management was guided by the judgement that the Company does not yet have a court settlement signed with the Tax Authority.
The Company currently pays the said fine in equal parts for a period of four years (with additional interest).
27
AB „Panevėžio statybos trestas“
Separate Financial Statements
4. Financial Risk Management (continued)
On 17 June 2021, an overdraft agreement was signed with bank with the limit of EUR 5 million. The
agreement was extended until 31 July 2024. As at 31 December 2023, the balance of overdraft limit
utilised amounted to EUR 4,120 thousand (Note 23).
Change in Liabilities Arising from Financing Activities
(EUR thousand)
As at 31
December
2022
Accrued
Cash in-
flows/outflows
Other
As at 31
December
2023
Loans received
0
0
4,120
0
4,120
Dividends payable
28
0
0
0
28
Lease liabilities
704
102
(322)
0
484
Total
732
102
3,798
0
4,632
As at 31 December 2022, overdraft limit was not used (Note 23).
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 2023 and 2022, 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
2023 and 2022 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.
The Company’s financial assets and borrowings subject to variable interest rates outstanding as of 31
December 2023 were as follows:
Contract cur-
rency
2023
2022
Long-term loans granted
EUR thousand
6,378
5,954
Short-term loans granted
EUR thousand
1,427
1,358
Total
7,805
7,312
Loans received (overdraft)
EUR thousand
4,120
0
Total
4,120
0
With an increase in the interest rate by 0.5% as at 31 December 2023, 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 2022, the Company’s net profit would also increase by approximately EUR 35 thousand. With
an increase in the interest rate by 0.5% as at 31 December 2023, the Company’s net profit would decrease
by approximately EUR 21 thousand due to the loan received.
Capital management
The Company’s Boards policy is to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. The Company’s 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
28
AB „Panevėžio statybos trestas“
Separate Financial Statements
4. Financial Risk Management (continued)
of the Company must not be less than ½ of the issued capital. As at 31 December 2023 and 2022, 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. 97% in 2023 and 99% in 2022).
(EUR thousand)
2023
2022
Lithuania
79,141
78443
Latvia
1 610
779
Sales in total
80,751
79,222
Revenue from the largest customer of the Company in 2023 amounted to approximately EUR 17,234
thousand (2022: EUR 18,214 thousand) of the Company’s total revenues.
In 2023, the Company recognised EUR 2,531 thousand of revenue from contracts with customers that
were included to the balance of contract liabilities at the beginning of the period (2022: EUR 674 thou-
sand). Information on contracts outstanding at the end of the financial year is disclosed in Note 19.
6. Cost of sales
(EUR thousand)
2023
2022
Construction sub-contractors
38,735
41,919
Raw materials and consumables
18,644
16,136
Payroll expenses (Note 9)
10,943
9,582
Depreciation charge
240
391
Amortisation charge
2
4
Machinery expenses
1,686
2,856
Rent expenses (short term lease)
2,199
1,550
Onerous contracts
(413)
515
Other expenses
4,873
4,113
Total cost of sales
76,909
77,066
7. Selling expenses
(EUR thousand)
2023
2022
Advertising and other expenses
35
31
Payroll expenses (Note 9)
355
306
Total selling expenses
390
337
8. Administrative expenses
(EUR thousand)
2023
2022
Payroll expenses (Note 9)
4,938
4,615
Purchased services for administrative use
1,523
1,425
Rent expenses
302
305
Depreciation charge
268
226
Operating taxes other than income tax
119
121
Sponsorship
13
12
Amortisation charge
21
19
Total expenses of impairment (reversal of impairment) of trade re-
ceivables, contract assets and other receivables:
(20)
(68)
Impairment (reversal of impairment) of trade receivables (Note 19)
(28)
(13)
Decrease (increase) in other amounts receivable
8
(55)
Other expenses
509
142
Total administrative expenses
7,673
6,797
29
AB „Panevėžio statybos trestas“
Separate Financial Statements
9. Payroll expenses
(EUR thousand)
2023
2022
Wages and salaries
15,293
12,834
Social security contributions
293
244
Daily allowances and incapacity benefits
674
1,098
Change in accrued vacation reserve and bonuses
52
277
Change in pension provision (Notes 25 and 27)
(17)
67
Total salary related expenses
16,295
14,520
Recognised in:
Cost of sales
10,943
9,582
Administrative expenses
4,938
4,615
Selling expenses
355
306
Other operating expenses
59
17
Total salary related expenses
16,295
14,520
10. Other Income and Expenses
(EUR thousand)
2023
2022
Gain from sale of property, plant and equipment
51
29
Rental income (Note 15)
466
413
Gain on revaluation of assets
140
346
Other revenue
694
644
Total other income
1,351
1,432
Depreciation of rented premises
(139)
(132)
Other expenses
(620)
(488)
Total other expenses
(759)
(620)
Total other income and expenses, net
592
812
11. Finance Income and Expense
(EUR thousand)
2023
2022
Interest income
428
231
Interest expenses, related to fine imposed by the Competition Coun-
cil (Note 28)
0
1,133
Other finance income
865
824
Total finance income
1,293
2,188
Loan interest expenses
(375)
(102)
Other expenses
(8)
(24)
Total finance expense
(383)
(126)
Total finance income and expense, net
910
2,062
12. Income tax
Income tax expenses (benefit):
(EUR thousand)
2023
2022
Current income tax expense
0
0
Change in deferred tax
(440)
(384)
Total income tax expense
(440)
(384)
In 2023 and 2022, 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:
30
AB „Panevėžio statybos trestas“
Separate Financial Statements
12. Income Tax (continued)
(EUR thousand)
2023
2022
Profit (loss) before tax
(2,279)
(2,104)
Income tax expense (benefit) applying the
Company’s tax rate in Lithuania
15.0 %
(342)
15.0 %
(316)
Non-deductible expenses
356
111
Non-taxable income
(522)
(419)
Change in deferred tax asset’s realisation al-
lowance
68
240
(19.3)%
(440)
(18.3)%
(384)
Deferred tax:
(EUR thousand)
2023
2022
Temporary
differences
Deferred tax
Temporary
differences
Deferred tax
Impairment of trade and other receivables
122
19
184
28
Accrued bonuses
267
40
222
33
Pension provision
278
42
296
44
Vacation reserve
30
4
28
4
Warranty provision
270
40
471
71
Inventory write-off to net realisable value
91
14
75
11
Tax loss carry forward (indefinite period)
8,684
1,303
5,225
785
Onerous contracts
102
15
515
77
Total deferred tax assets
1,477
1,053
Not recognised deferred tax assets (trade
receivable allowance)
(10)
(9)
Deferred tax asset recognised
1,467
1,044
Revaluation of land and buildings
(2,144)
(322)
(2,394)
(359)
Difference in investment property value
(1,694)
(254)
(1,557)
(234)
Deferred tax liability
(576)
(593)
Deferred tax, net
891
451
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)
2023
2022
Net deferred tax as at 1 January
451
249
Amounts recognised in other comprehensive income
0
(182)
Recognised in profit or loss
440
384
Net deferred tax as at 31 December
891
451
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.
31
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
Construc-
tion-in-pro-
gress
Total
Cost (revalued carrying amount of land and buildings)
Balance as at 1 January 2023
3,840
2,594
1,759
546
0
8,739
Additions
311
184
116
20
631
Reclassification
(45)
(45)
Asset written-off
(453)
(69)
(167)
(689)
Balance as at 31 December 2023
3,795
2,452
1,874
495
20
8,636
Balance as at 1 January 2022
2,598
2,614
1,740
603
7,555
Additions
108
37
19
81
245
Revaluation of assets
1,134
1,134
Asset written-off
(57)
(138)
(195)
Balance as at 31 December 2022
3,840
2,594
1,759
546
8,739
Depreciation and impairment
Balance as at 1 January 2023
650
2,287
1,467
284
4,688
Depreciation for the year
224
196
114
113
647
Depreciation of asset written-off
(439)
(66)
(160)
(665)
Balance as at 31 December 2023
874
2,044
1,515
237
4,670
Balance as at 1 January 2022
500
2,048
1,279
290
4,117
Depreciation for the year
150
296
188
129
763
Depreciation of asset written-off
(57)
0
(135)
(192)
Balance as at 31 December 2022
650
2,287
1,467
284
4,688
Residual value
As at 1 January 2023
3,190
307
292
262
0
4,051
As at 31 December 2023
2921
408
359
258
20
3,966
As at 1 January 2022
2,098
566
461
313
0
3,438
32
13. Property, Plant and Equipment (continued)
(EUR thousand)
2023
2022
Depreciation recognised in:
Cost of sales
240
391
Operating expenses
268
226
Other expenses
139
146
Total depreciation
647
763
Land and buildings are stated at revalued amount. The last external revaluation was performed
as on 31 December 2022 based on the estimates on possible market prices of the Company’s land
and buildings provided by independent appraisers, 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 value approach. Significant unob-
servable data was used in fair value measurement, i.e. price per square meter/are. The fair value
would increase with an increase in price per square meter/are and decrease with a decrease in
price per square meter/are.
If the buildings and land were stated at cost model, their net book value as at 31 December 2023
would be equal to EUR 1,526 thousand (as at 31 December 2022, EUR 1,638 thousand).
As at 31 December 2023, the acquisition cost of fully depreciated property, plant and equipment
still in use amounted to EUR 2,927 thousand, (as at 31 December 2022, EUR 2,108 thousand).
Land and buildings with the carrying amount of EUR 6,327 thousand as at 31 December 2023
(as at 31 December 2022, EUR 3,272 thousand) has been pledged to banks, insurance company
and the state authority (see Note 28).
14. Intangible assets
(EUR thousand)
Software
Other assets
Total
Cost
Balance as at 1 January 2023
202
0
202
Additions
9
9
Asset written-off
0
0
Balance as at 31 December 2023
211
0
211
Balance as at 1 January 2022
221
0
221
Additions
3
3
Asset written-off
(22)
(22)
Balance as at 31 December 2022
202
0
202
Amortisation and impairment
Balance as at 1 January 2023
38
0
38
Amortisation charge for the year
23
23
Amortisation of asset written-off
Balance as at 31 December 2023
61
0
61
Balance as at 1 January 2022
38
(1)
37
Amortisation charge for the year
22
1
23
Amortisation of asset written-off
(22)
(22)
Balance as at 31 December 2022
38
0
38
Residual value
As at 1 January 2023
164
0
164
As at 31 December 2023
150
0
150
As at 1 January 2022
183
1
184
33
AB „Panevėžio statybos trestas“
Separate Financial Statements
14. Intangible Assets (continued)
(EUR thousand)
2023
2022
Amortisation recognised in:
Cost of sales
2
4
Administrative expenses
21
19
Total amortisation
23
23
The Company did not have any intangible assets fully amortised but still in use neither as at 31
December 2023, nor as at 31 December 2022.
15. Investment Property
(EUR thousand)
2023
2022
Balance as at 1 January
3,741
3,396
Reclassification from (to) property, plant and equip-
ment
45
130
Change in fair value
140
215
Balance as at 31 December
3,926
3,741
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 investment property.
The fair value measurement has been determined by valuation of the building carried out by the
independent property appraisers Ober-Haus UAB, 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 2023 and 2022).
The identified fair value of the above investment property of EUR 1,690 thousand (2022: EUR
1,550 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-cancella-
ble lease agreements were the following: EUR 154 thousand in less than one year, EUR 70 thou-
sand between one and five years (as at 31 December 2022, EUR 171 thousand in less than one
year, EUR 112 thousand between one and five years). Revenue from the hotel premises rent in
2023 amounted to EUR 132 thousand (2022: EUR 123 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 2022 amounted to EUR 2,236 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 10.56% 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.
Expected rental receivables of this investment property under non-cancellable contracts as at 31
December 2023 amounted to: EUR 293 thousand in less than one year, EUR 629 thousand be-
tween one and five years (as at 31 December 2022: EUR 355 thousand in less than one year,
EUR 469 thousand between one and five years). Revenue from lease in 2023 amounted to EUR
334 thousand (in 2022: EUR 332 thousand) and was accounted for under other income.
34
AB „Panevėžio statybos trestas“
Separate Financial Statements
16. Investments in subsidiaries and joint operations
(a) Subsidiaries
(EUR thousand)
2023
2022
Subsidiary
Ownership
interest
Cost
Owner-
ship in-
terest
Cost
PST Investicijos UAB, Verkių st. 25C, Vilnius
69.0 %
305*
68.3 %
3,432
Šeškinės Projektai UAB, Verkių st. 25C, Vilnius
100 %
1,600
100 %
1,600
Ateities Projektai UAB, Verkių st. 25C, Vilnius
100 %
400
100 %
400
Tauro Apartamentai UAB, Verkių st. 25C-1, Vilnius
100 %
2
100 %
2
Hustal UAB, Tinklų st. 7, Panevėžys
100 %
34
100 %
34
Vekada UAB, Marijonų st. 36, Panevėžys
95.6 %
225
95.6 %
225
Skydmedis UAB, Pramonės st. 5, Panevėžys
100 %
145
100 %
145
Alinita UAB, Tinklų st. 7, Panevėžys
100 %
70
100 %
70
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, Po-
land
100 %
1
100 %
1
Aliuminio Fasadai UAB, Pramonės st. 5, Panevėžys
100 %*
250
100 %*
250
Impairment:
PST Investicijos UAB
(112)
(112)
Alinita UAB
(70)
(70)
PS Trests SIA
(4)
(4)
Total investments
2,850
5,977
* In 2022, the General Meeting of Shareholders of PST Investicijos UAB made a decision to
reduce the issued capital by the EUR 9,709 thousand loss (the Company’s share is EUR 6,636
thousand). * In 2023, the General Meeting of Shareholders of PST Investicijos UAB made a
decision to pay EUR 4,576 thousand in dividends to the shareholders, by reducing the issued
capital of PST Investicijos UAB.
Financial information on subsidiaries can be specified as follows:
Subsidiaries of Panevėžio Statybos Trestas AB:
(EUR thousand)
Type of activity
Equity
As at 31
December
2023
Net profit
(loss) for
2023
Equity
As at 31
December
2022
Net profit
(loss) for
2022
PST Investicijos UAB (consoli-
dated group, see below)
Real estate development
250
5,502
4,808
33
Vekada UAB
Construction: electrical
installation
813
(182)
988
(63)
Skydmedis UAB
Construction: wooden
houses
1,892
884
1,507
837
Alinita UAB
Construction: condition-
ing equipment
(251)
18
(265)
(241)
Metalo Meistrai UAB before
business combination
Construction
0
0
1,485
455
Hustal UAB before business
combination
Trade
0
0
376
216
Hustal UAB after business
combination
Trade, construction
3,038
1,243
2,095
690
Aliuminio Fasadai UAB
Production of aluminium
profile systems
(198)
(8)
(191)
(120)
PS Trests SIA
Construction
(182)
11
(193)
(51)
Šeškinės Projektai UAB
Real estate development
8,280
701
7,615
1,337
Kingsbud Sp.z.o.o
Trade
581
141
441
183
Ateities Projektai UAB
Real estate development
619
216
403
204
Tauro Apartamentai UAB
Real estate development
3
0
3
0
35
AB „Panevėžio statybos trestas“
Separate Financial Statements
16. Investments in subsidiaries and joint operations (continued)
Subsidiaries of PST Investicijos UAB:
(EUR thousand)
Ownership in-
terest
Equity
As at 31 De-
cember 2023
Net profit
(loss) for 2023
Equity
As at 31 De-
cember 2022
Net profit
(loss) for 2022
(9,264)
ZAO ISK Baltevromarket
100 %
0
0
198
5,629
As at 31 December 2023 and 2022, based on the management’s assessment, the investments in
Alinita UAB and SIA Trests SIA were impaired, therefore, a 100% impairment loss was recog-
nised. The management estimated the recoverable amount for investment into PST Investicijos
UAB as at 31 December 2023 and 2022 as described below. There were no impairment indica-
tions for other investments as at 31 December 2023 and 2022.
As at 31 December 2023, PST Investicijos UAB recoverable amount was estimated as follows:
Carrying value of PST Investicijos UAB as at 31 December 2022 (cost less
impairment recognised)
193
Other assets less liabilities at estimated fair value
250
Recoverable value of PST Investicijos UAB
250
Amount of shares controlled by Panevėžio Statybos Trestas AB
68.974 %
PST Investicijos UAB recoverable value attributed to Panevėžio Statybos
Trestas AB
172
Estimated potential impairment as at 31 December 2023.
(20)
Estimated impairment until 31 December 2022
(5,558)
Reduction in financial assets of PST investicijos UAB by making payments
to shareholders
3,127
Reduction in financial assets of PST investicijos UAB by covering losses
2,319
Total impairment for as of 31 December 2023
(112)
The subsidiary ZAO ISK Baltevromarket (Kaliningrad) of PST investicijos UAB was removed
from the register on 30 May 2023. The potential impairment was not identified based.
As at 31 December 2022, PST Investicijos UAB recoverable amount was estimated as follows:
Carrying value of PST Investicijos UAB as at 31 December 2022 (cost less
impairment recognised)
3,320
Other assets less liabilities at estimated fair value
4,886
Recoverable value of PST Investicijos UAB
4,886
Amount of shares controlled by Panevėžio Statybos Trestas AB
68.344 %
PST Investicijos UAB recoverable value attributed to Panevėžio Statybos
Trestas AB
3340
Estimated potential impairment as at 31 December 2022.
20
Estimated impairment until 31 December 2021
(5 558)
Additional impairment accounted for under financial expenses in 2022
0
Total impairment for as of 31 December 2022
(5 558)
Estimation of the recoverable amount of investment made by PST Investicijos UAB 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.
36
AB „Panevėžio statybos trestas“
Separate Financial Statements
16. Investments in subsidiaries and joint operations (continued)
(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)
2023
2022
Total assets
14
14
Total liabilities
3
3
Equity
11
11
Revenue
0
0
Net result
0
(5)
17. Long-term and short-term loans granted
(EUR thousand)
Interest rate
Maturity
2023
2022
Šeškinės Projektai UAB
3-month
EURIBOR+0.98 %, as
from 05/11/2019 3-
month EURIBOR+3.0%
As at 1 July
2026
6,378
5,954
Short-term loans
Ateities Projektai UAB
6-month
EURIBOR+3.0%
As at 31 Decem-
ber 2024
1,379
1,286
Kingsbud Sp.z.o.o
Fixed at 1.5 %
As at 31 Decem-
ber 2023
48
72
Total
7,805
7,312
As at 31 December 2023 and 2022, 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.
The long term loan granted by the Company was not past due as at 31 December 2023 and
2022. Kingsbud Sp. z. o. o. repaid the loan in January 2024.
37
AB „Panevėžio statybos trestas“
Separate Financial Statements
18. Inventories
(EUR thousand)
2023
2022
Raw materials and consumables
1,359
2,223
Projects under development
3,366
3,119
Write-down to net realisable value
(91)
(75)
Total inventories
4,634
5,267
In 2023 and 2022, the change in write-down of inventory to the net realizable value was ac-
counted for in administrative expenses.
19. Trade Receivables and Contract Assets
(EUR thousand)
2023
2022
Trade receivables
12,729
14,075
Contract assets (accrued income based on the stage of completion)
2,531
4,104
Receivables from subsidiaries
1,085
397
Impairment at the beginning of the year
(126)
(130)
Write-off of doubtful trade receivables
42
(10)
Repayment of doubtful trade receivables
7
1
Additional impairment/(reversal) during the period
21
13
Impairment at the end of the year
(56)
(126)
Total trade receivables and contract assets, net
16,289
18,450
The part of trade receivables due from customers is accounted for as non-current trade receiva-
bles: EUR 1 thousand as at 31 December 2023, EUR 114 thousand as at 31 December 2022.
These amounts are related with non-current retentions as indicated below.
As at 31 December 2023, 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 1,400 thousand (2022: EUR
3,555 thousand) relating to construction contracts in progress. For impairment of trade receiva-
bles refer to Note 4.
Information about customers’ specific projects in progress as at 31 December 2023 and 2022:
(EUR thousand)
2023
2022
Sales by specific customers’ projects in progress, recognised in the statement of
comprehensive income during the year
47,711
65,689
Sales by specific customers’ projects in progress, recognised over the contract
period
69,594
101,987
Expenses incurred for completing specific customers’ projects in progress, rec-
ognised in the statement comprehensive income during the year
45,757
62,233
Expenses incurred for completing specific customers’ projects in progress, rec-
ognised in the statement comprehensive income over the contract period
66,993
98,550
Contract assets (Note 19)
2,531
4,104
Contract liability (deferred income) under outstanding contracts at the year-end
(Note 27)
728
2,687
Contract liability (payments from customers for purchase of inventories and
etc.)
187
943
Provisions for onerous contracts (Note 27)
102
515
Trade receivables (under the caption of trade receivables and receivables from
related parties)
11,525
12,347
As at 31 December 2023, the total contract amount attributed to performance obligations under
the construction contracts with customers that were outstanding (or partly outstanding) amounted
to EUR 97,318 thousand (as at 31 December 2022, EUR 79,160 thousand). Most of these con-
struction projects are expected to be completed and revenue recognised within one year.
38
AB „Panevėžio statybos trestas“
Separate Financial Statements
20. Other current assets
(EUR thousand)
2023
2022
Non-financial assets
Excess VAT
36
135
Accrued revenue from contracts
0
269
Other current assets
0
0
Non-financial assets, total
36
404
Other current assets, total
36
404
As at 31 December 2023 and 2022, the Company did not have any term deposits.
21. Cash and cash equivalents
(EUR thousand)
2023
2022
Cash at bank
5,125
5,013
Cash on hand
0
0
Cash and cash equivalents, total
5,125
5,013
As from 21 June 2022, the Company does not have any cash on hand.
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 2023 and 2022. The Company did not hold its own shares
as at 31 December 2023 and 2022. As at 31 December 2023 and 2022, the subsidiaries had not
acquired any shares of the Company.
The reserves were as follows:
(EUR thousand)
2023
2022
Revaluation reserve
1,822
2,034
Legal reserve
475
475
Total reserves
2,297
2,509
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:
2023
2022
Revaluation reserve as at 1 January
2,035
1,137
Revaluation
0
1,030
Depreciation of revaluation reserve
(213)
(132)
Revaluation reserve as at 31 December
1,822
2,035
39
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 2023
and 2022 accounted for 10% of the issued capital.
23. Loans
(EUR thousand)
Interest rate
Maturity
2023
2022
OP Corporate Bank plc. Lithuania
(overdraft)
3-month
EURIBOR+2.54
%
As at 31 Janu-
ary 2024
4,120
0
Total
4,120
0
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 2022, the overdraft was not used.
24. Trade payables
Payables to suppliers by geographic region:
(EUR thousand)
2023
2022
Local market (Lithuania)
14,033
13,509
Latvia
193
264
Netherlands
0
145
Ukraine
5
11
Poland
328
47
Germany
36
3
Total
14595
13,979
Trade payables are non-interest bearing and normally settled on 30–90 day term.
25. Provisions
Warranty provisions are related to constructions built in 2019–2023. 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*
Other
Warranty
Pension
Change in provisions:
2023
2023
2023
2022
2022
Provisions at the beginning of the
year
471
295
0
702
228
Used and recognised in the cost of
sales and operating costs
(421)
(56)
(430)
(33)
Accrued during the year
220
39
109
199
100
Provisions at the end of the year
270
278
109
471
295
* Represents current and non-current part of provision.
40
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
Total
Balance as at 1 January 2023
568
123
691
Additions
91
91
Asset written-off
0
Depreciation charge
(211)
(114)
(325)
Balance as at 31 December 2023
357
100
457
As at 31 January 2022
779
198
977
Additions
0
14
14
Asset written-off
0
0
0
Depreciation charge
(211)
(89)
(300)
Residual value as at 31 December 2022
568
123
691
The Company has long-term contracts with two lessors for lease of premises and cars.
Lease liabilities and their dynamics:
(EUR thousand)
2023
2022
Residual value at the beginning of the period
704
981
Contracts signed under IFRS 16
91
14
Contracts terminated (write-off of liability and accrued interest)
0
0
Accrued interest
11
16
Lease payments (principal portion and interest)
(322)
(307)
Residual value as at 31 December
484
704
Non-current lease liabilities
225
408
Current lease liabilities
259
296
The Company’s payments under leases were as follows:
(EUR thousand)
2023
2022
Minimum payments
Within first year
283
308
From two to five years
210
420
More than five years
0
0
Total
493
728
Future finance costs
Within first year
(7)
(16)
From two to five years
(2)
(8)
More than five years
0
0
Total
(9)
(24)
Residual value
484
704
41
AB „Panevėžio statybos trestas“
Separate Financial Statements
27. Contract and Other Liabilities
(EUR thousand)
2023
2022
Non-financial liabilities
Contract liability (deferred income) under contracts in progress (Note
19)
728
2,687
Contract liability (payments from customers for purchase of invento-
ries and etc.) (Note 19)
187
943
Liabilities related to the fine imposed by the Competition Council
(Note 28)
4,409
5,775
Payable VAT
0
0
Accrued vacation reserve
1,687
1,635
Salaries and related taxes payable
1,210
1,191
Bonus accrual for employees
267
222
Provisions for onerous contracts
102
515
Liabilities to subsidiary
0
2,734
Other liabilities
112
163
Other liabilities, total
8,702
15,865
28. Contingent Liabilities
Guarantees
As at 31 December 2023, the bank guarantees in the amount of EUR 9,098 thousand to third
parties, related to obligations under the construction contracts of the Company, were issued by
banks on behalf of the Company (as at 31 December 2022, EUR 10,456 thousand). The guaran-
tees expire in the period from 7 January 2024 to 30 August 2029. In addition, the Company has
guarantees issued by insurance companies for the amount of EUR 13,996 thousand, which are
also related to liabilities in the construction contracts (2022: EUR 15,503). The guarantees expire
between 30 January 2024 and 21 December 2026. No additional liabilities are recorded in respect
of these guarantees in the financial statements other than estimated warranty reserve (Note 25).
The property with a carrying amount of EUR 6,327 thousand as at 31 December 2023 (EUR
3,272 thousand as at 31 December 2022) has been pledged to banks, insurance company and the
state authority for the guarantee limit, bank guarantees issued and deferral of payables. As at 31
December 2023, the guarantee limit amounted to EUR 15,000 thousand, the balance withdrawn
was EUR 9,098 thousand. The guarantee limit agreement is effective until 31 March 2024 with
the possibility to issue guarantees until 31 March 2024 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 2022, the guarantee limit amounted to
EUR 15,000 thousand, the balance withdrawn was EUR 10,456 thousand.
Legal contingencies
The Company is involved in below described material legal cases:
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 modern-
ization works meeting the requirements of Article 5 of the Competition law of the Republic 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 requirements 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. 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 state-
ments for the year ended 31 December 2020 the fine amounting to EUR 8,514 thousand and
related interest charge amounting to EUR 1,385 thousand, and the bailiff enforcement fee
amounting to EUR 396 thousand.
42
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 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. On 17 February 2023, the settlement agreement was signed with the Tax Authority,
with the fine payable by equal instalments over four years period. On 20 July 2023, the Chamber
of Panevėžys of the Panevėžys District approved the settlement agreement between the Company
and the Tax Authority of 17 February 2023 regarding the collection of the fine imposed by the
Competition Council in enforcement proceedings. The outstanding debt as at the date of conclu-
sion of the settlement agreement, amounting to EUR 5,568,841.30, is divided over a period until
1 February 2027, and is paid in equal installments every month. The Group’s non-current assets
with the carrying amount of EUR 4,104,022 were pledged to secure payments.
The Chamber of Panevėžys of the Panevėžys District Court investigated the appeal of
PANEVĖŽIO STATYBOS TRESTAS AB in a civil case No 2YT-238-1105/2021 regarding the
bailiff’s orders by which the enforcement fees were calculated. By the ruling of 8 February 2022,
the Court overturned the order No S-20-102-25277 of S. Ramanauskas, a bailiff, dated 7 Sep-
tember 2020, regarding the recovery of enforcement fees in the enforcement proceedings No
0102/20/00638. The parties to the proceedings did not appeal, and thus bailiff's enforcement fees
decreased from EUR 396 thousand to EUR 45 thousand.
The Chamber of Panevėžys of the Panevėžys District Court investigated the appeal of
PANEVĖŽIO STATYBOS TRESTAS AB 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 January 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. On 14 April 2022, the Supreme Court of Lithuania
overturned the ruling of the Panevėžys Regional Court dated 20 April 2021 and remitted the case
to the appeal court for reconsideration. On 14 June 2022, the Panevėžys Regional Court over-
turned the ruling of the Chamber of Panevėžys of the Panevėžys District Court dated 13 January
2021, and decided this question on the merits: upheld the appeal against the actions of bailiff
Saulius Ramanauskas in enforcement proceedings No OI 02/20/00638; repealed the bailiff's or-
der No S-20- 17054 dated 11 June 2020, order No S-20-102-17225 dated 12 June 2020, order
No 20-102-17214 dated 12 June 2020, order No S-20-102-17969 dated 18 June 2020 and order
No S-20-102-18809 dated 30 June 2020 concerning the calculation of interest and enforcement
fees (bailiff fees), and ordered the bailiff Saulius Ramanauskas to carry out a recalculation of the
interest and enforcement fees specified in these orders. On this basis, the interest charged de-
creased from EUR 1,385 thousand to EUR 252 thousand.
There is a civil case in Vilnius District Court based on DG Paupio Verslo Namai UAB (Plaintiff)
action against Panevėžio Statybos Trestas AB (civil case No e2-739-863/2024), under which the
Plaintiff seeks that the Company and ERGO Insurance SE acting through ERGO Insurance SE
Lithuanian branch be ordered jointly and severally to pay EUR 827,917.61; the Company be
ordered to pay EUR 397,983.79; and the Company be ordered to pay 6% annual interest from
the adjudged amount calculated from the day when the civil case was lodged in the court until
complete execution of the judgement and the costs incurred.
The dispute arose out of the plaintiff’s allegation that the Company did not properly carry out the
exterior facade tile installation works of the apartment building at Aukštaičių g. 10, Vilnius, re-
sulting in several tiles falling off external facade.
43
AB „Panevėžio statybos trestas“
Separate Financial Statements
28. Contingent liabilities (continued)
By judgment delivered by the Court of First Instance on 3 April 2024, the compensation for
damages was reduced to EUR 208,141. The judgment can be appealed to the Lithuanian Court
of Appeal within 30 days.
The management intends to appeal the judgment and is confident that the case will be success-
fully resolved, therefore no provision has been made for the amount of the claim.
The property of EUR 854,736 is pledged to the insurance company to secure fulfilment of the
obligations.
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 2022–2023 with subsidiaries, the con-
trolling company Hisk AB and with its subsidiaries (reported under other caption “Other related
companies” below). Transactions with related parties during 2023 and 2022 were as follows:
(EUR thousand)
Type of transaction
2023
2022
Sales:
Companies under control
Šeškinės Projektai UAB
Interest and services
424
332
Vekada UAB
Goods and services
14
16
Alinita UAB
Goods and services
339
35
PST Investicijos UAB
Services
19
135
Skydmedis UAB
Goods and services
52
41
Ateities Projektai UAB
Services
80
48
Aliuminio Fasadai UAB
Services
428
697
Hustal UAB
Services
171
210
PS Trests SIA
Services
102
33
Kingsbud Sp.z.o.o
Interest
7
2
Controlling company
Hisk AB
Goods and services
106
185
Other related companies
Goods and services
0
1
(EUR thousand)
Type of transaction
2023
2022
Purchases:
Companies under control
Alinita UAB
Goods and services
384
1,620
Kingsbud Sp.z.o.o
Goods and services
1,275
777
Vekada UAB
Goods and services
1,212
1,600
PS Trests SIA
Services
1,725
865
Aliuminio Fasadai UAB
Goods and services
42
966
Šeškinės Projektai UAB
Goods and services
289
308
PST Investicijos UAB
Services
217
357
Other (1+8+16)
Services
25
8
Controlling company
Hisk AB
Goods and services
965
593
Other related companies
UAB Scard
Goods and services
110
120
Other
Goods and services
39
43
44
AB „Panevėžio statybos trestas“
Separate Financial Statements
29. Related Party Transactions (continued)
(EUR thousand)
2023
2022
Receivables
Companies under control
Šeškinės Projektai UAB
433
458
Hustal UAB
37
68
Aliuminio Fasadai UAB
747
376
Other
32
70
Payables:
Companies under control
Vekada UAB
246
435
Kingsbud Sp.z.o.o
420
176
PS Trests SIA
171
222
Šeškinės Projektai UAB
432
166
Other
41
22
Controlling company
Hisk AB
369
269
Other related companies
Other
4
16
Loans receivable incl. accrued interests from companies under control:
Kingsbud Sp.z.o.o
48
72
Šeškinės Projektai UAB
6,378
5,954
Ateities Projektai UAB
1,379
1,286
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 allowances have been made for the doubtful receivables from related
parties by the Company. The balances outstanding with related parties of the Company were not
overdue as at 31 December 2023 and 2022.
Management remuneration
Wages, salaries and social insurance contributions, calculated to the Company’s directors and
the Board members for the year 2023, amounted to EUR 1,068 thousand (2022: EUR 995 thou-
sand). For the Company’s management and the Board members, there were no guarantees issued,
any other paid or accrued amounts or assets transferred.
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.
45
AB „Panevėžio statybos trestas“
Separate Financial Statements
30. Fair value of financial instruments (continued)
As at 31 December 2023
(EUR thousand)
Carrying
amount
Fair value
Total
Level 1
Level 2
Level 3
Financial assets
Trade receivables
16,289
16,289
Loans granted
7,805
7,805
Cash and cash equivalents
5,125
5,125
Financial assets, total
29,219
5,125
24,094
Financial liabilities
Loans (overdraft)
(4,120)
(4,120)
Trade payables
(14,595)
(14,595)
Lease liabilities
(259)
(259)
Liabilities related to the fine imposed by
the Competition Council
(4,409)
(4,409)
Total financial liabilities
(23,383)
(4,120)
(19,263)
As at 31 December 2022
(EUR thousand)
Carrying
amount
Fair value
Total
Level 1
Level 2
Level 3
Financial assets
Trade receivables
18,450
18,450
Loans granted
7,312
7,312
Cash and cash equivalents
5,013
5,013
Financial assets, total
30,775
5,013
25,762
Financial liabilities
Loans (overdraft)
Trade payables
(13,979)
(13,979)
Lease liabilities
(704)
(704)
Liabilities related to the fine imposed by
the Competition Council
(5,775)
(5,775)
Total financial liabilities
(20,458)
(20,458)
There were no transfers between levels of the fair value hierarchy in 2023 and 2022 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.
46
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)
2023
2022
Net result for the year
(2,278,981)
(1,720,126)
Dividends declared
0
0
Average number of shares
16,350,000
16,350,000
Basic and diluted earnings/(loss) per share
(0.14)
(0.11)
Dividends declared per share
0
32. Events after the End of the Reporting Period
On 23 January 2024, Panevėžio Statybos Trestas AB, former managing director and insurers
R&Q Syndicate Management Limited and Marco International Insurance Company Limited
signed a settlement agreements, whereby amicably discontinuing all court and arbitration dis-
putes regarding the civil liability of the former managing director of PST (regarding the fine
imposed by the Competition Council of the Republic of Lithuania under the resolution No 2S-11
(2017) of 20 December 2017) and the payment of the related insurance benefit. In line with the
settlement agreements, the insurers paid EUR 1,200,000 in favour of PST, and PST waived all
its claims against the insurers and the former managing director.
Managing director Tomas Stukas 09/04/2024
Chief Accountant Danguolė Širvinskienė 09/04/2024
47
Company’s and Consolidated Annual Report,
Governance Report,
Consolidated Report of Social Responsibility,
and Remuneration Report
of Panevezio statybos trestas AB
for 2023
48
I. Consolidated Annual Report
1. Accounting period covered by the Annual Report
This Company’s and Consolidated Annual Report for the year 2023 covers the period from 1 January
2023 until 31 December 2023.
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 Com-
pany 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 Panevezys, 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, production and real estate development. In addition
to the listed activities, the Company is engaged in rent of premises and machinery.
49
5. The companies included in the Group of Panevezio statybos trestas AB
As of 31 December 2023, the Group of Panevezio statybos trestas AB included the following com-
panies:
Subsidiary
company
Registration date,
register administra-
tor
Company
code
Registered ad-
dress
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
Vekada UAB
16 May 1994
State Enterprise
Centre of Registers
147815824
Tinklu Str. 7,
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 Bi-
alystok,
XII Economic De-
partment of Na-
tional 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
Seskines pro-
jektai UAB
9 November 2010
State Enterprise
Centre of Registers
302561768
Ukmerges Str. 219,
Vilnius
Tel. (+370 615) 54090
info@psti.lt
gbujokas@psti.lt
100
Ateities pro-
jektai 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 investici-
jos 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 aparta-
mentai
UAB
23 October 2018
State Enterprise
Centre of Registers
304937621
Ukmerges Str. 219,
Vilnius
Tel. (+370 610) 09222
gbujokas@psti.lt
100
Hustal UAB
16 June 1999
State Enterprise
Centre of Registers
148284860
Tinklu Str. 7,
Panevezys
Tel. (+370 45) 585087
www.hustal.eu
100
Aliuminio fa-
sadai 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
50
6. Nature of operating 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.
Hustal UAB – design, fabrication and erection of steel structures. The company also supplies steel
structures for other industries where steel items are required. Activity and sale of the company are
focused on the Scandinavian market.
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 estab-
lished 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.
Seskines projektai UAB – real estate development and rent.
Ateities projektai UAB – real estate preparation and sale.
PST investicijos UAB – real estate preparation and sale.
Tauro apartamentai UAB – development of real estate projects.
Aliuminio fasadai UAB – production of aluminium profile systems, aluminium framed windows and
doors.
7. Contracts with the intermediary of public trading in securities
The Company has the contract for securities accounting signed with Siauliu bankas AB.
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
51
Comparison of PTR1L Panevezio statybos trestas and OMX Vilnius Benchmark GI indexes in 2023
Company share price variation at Stock Exchange Market Nasdaq Vilnius for the period 2019
through 2023 (Euros)
Company share price variation at Stock Exchange Market Nasdaq Vilnius in 2023 (Euros)
52
Table 1. Information on the Company share price at Stock Exchange Market Nasdaq Vilnius for the
period 2019 through 2023:
Indicator
2023
2022
2021
2020
2019
Highest price, Euros
0.582
0.694
0.838
0.85
0.878
Lowest price, Euros
0.45
0.50
0.53
0.52
0.71
Average price, Euros
0.514
0.564
0.677
0.629
0,78
Share price as of the end
of reporting period, Euros
0.475
0.518
0.66
0.57
0.75
Traded volume
772,677
991,215
2,935,832
1,980,134
986,685
Turnover, mln. Euros
0.40
0.56
1.99
1.25
0.77
Capitalisation, mln. Euros
7.78
8.47
10.79
9.32
12.26
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
The key events that occurred during 2023 and were published through the GlobeNewswire infor-
mation system are listed below.
1 February 2023. The General Extraordinary Meeting of Shareholders was reconvened to take the
resolution on approval of the agreed material conditions for the settlement agreement with the State
Tax Inspectorate.
27 April 2023. 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.
27 July 2023. The Extraordinary General Meeting of Panevezio statybos trestas AB took place. The
Extraordinary General Meeting of Shareholders selected the audit company Grant Thornton Baltic
UAB to carry out the audit of the financial statement sets of Panevezio statybos trestas AB and the
companies of Panevezio statybos trestas AB Group for the years 2023 and 2024, and approved the
terms and conditions of payment for the audit services.
31 July 2023. The Board of Panevezio statybos trestas AB (PST) has appointed Tomas Stukas as the
company's CEO. Egidijus Urbonas, who has held this position for the last three years, will remain in
the Group's management team and continue his career as PST Director of Construction.
1 August 2023. By the court judgement dated 20 July 2023, the Panevezys Chamber of the Panevezys
District Court approved the settlement agreement dated 17 February 2023 between the company and
the State Tax Inspectorate at the Ministry of Finance of the Republic of Lithuania on recovery of the
fine imposed by the Competition Council in the enforcement case.
5 October 2023. Panevezio statybos trestas AB (PST) has signed a civil contract with Juodeliai UAB
for construction of the second production building and reconstruction of utility networks. This ex-
tension is planned in the subdivision of the company operating in the Marijampole Municipality. The
contract value totals 13.5 mln. Euros, VAT inclusive. The total area of facilities amounts to approx-
imately 14,700 square meters. Completion of the works is scheduled for the end of June 2024.
26 October 2023. Panevezio statybos trestas AB has signed a 17 mln. Euros (VAT inclusive) order
with one of the largest food production companies in Lithuania, Kauno grudai AB, for construction
of production and industrial building at Fortu Str. 9, Alytus. The total area of the building will be 7.4
thousand square meters, completion of the works is scheduled 11 months after the date of the signed
contract.
30 October 2023. The Extraordinary General Meeting of Shareholders of Panevezio statybos trestas
AB took place. The Ordinary General Meeting of Shareholders approved the new wording of the
Articles of Association of Panevezio statybos trestas AB. The member of the Board of Panevezio
statybos trestas AB Vaidas Grincevicius was removed from office from 30 October 2023. Darijus
Vilcinskas was elected as an independent member to the Board.
53
6 November 2023. Panevezio statybos trestas AB has signed a 13 mln. Euros (VAT inclusive) order
with Sausiu logistikos parkas UAB for construction of a storage building at Logistikos Str. 30,
Sausiai Village, Lentvaris Subdistrict, Trakai District. The total area of the building will be nearly
10 thousand square meters, completion of the works is scheduled 12 months after the date of the
signed contract. The services of construction management and technical supervision will be provided
by Viconus UAB.
In 2023 the Company has successfully completed several major construction projects, such as Con-
struction of Vilnius Lazdynai Swimming Pool opened to public, Construction of Laboratory and Ed-
ucation Blocks for Faculties of Mechanics, Electronics and Transport Engineering at VILNIUS
TECH. The modernization projects of apartment buildings have been completed in Klaipeda. In 2023
the works on several wind farm projects were completed, where the Konstrukcija branch carried out
the installation of foundations for the wind turbines. In addition to that, activities are continued in
such projects as Modernisation of Oil Refining Plant of ORLEN Lietuva AB in Mazeikiai, Recon-
struction of Panevezys City Sports Centre Aukstaitija – Construction of Swimming Pool, Recon-
struction of Wroblewski Library of Lithuanian Academy of Sciences. Over the year 2023, the Com-
pany signed the contracts and started the projects of apartment building renovation.
More than once the Company has been awarded for successfully implemented projects, their com-
plexity, high quality and organization of complicated activities. In December 2023, the awards of the
Lithuanian Product of the Year were arranged by Lithuanian Confederation of Industrialists for the
27th time where Panevezio statybos trestas AB has been awarded the gold medal for the Lazdynai
Swimming Pool project in the category of construction and construction material industry.
In 2023, 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 are concentrated, this branch
carries out civil and special construction works, Vilnius branch Genranga, performing general con-
tracting 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 2023, the companies of the Group successfully continued their activity inside and outside Lithua-
nia. 97 per cents of all orders of Hustal UAB engaged in fabrication of steel structures were directed
to Scandinavian countries in 2023. 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 and Alinita UAB‚ which
specialize in installation of indoor heating, ventilation and conditioning, water supply and waste wa-
ter systems, and in installation of electric systems, renewable energy and low current fields, imple-
mented the projects in Lithuania. The most advanced aluminium profile systems, aluminium win-
dows and doors, façades are produced at Aliuminio fasadai UAB.
PST investicijos UAB, Ateities projektai UAB and Seskines projektai UAB are the real estate devel-
opment companies. Ateities projektai UAB develops the project of residential houses in Kunigiskes.
PS Trests SIA operating in Latvia, in 2023 continued to carry out the construction works it had
started.
In 2023, 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 2024)
23 January 2024. Panevezio statybos trestas AB, the former CEO of the Company, D. Gesevicius,
and the insurers R&Q Syndicate Management Limited and Marco International Insurance Company
Limited signed the settlement agreements, on the basis of which all legal and arbitration disputes
regarding the civil liability of the former CEO of the Company, D. Gesevicius, (for the fine imposed
by the decision No. 2S-11(2017) of the Competition Council dated 20 December 2017) and payment
of the insurance benefit related to it will be amicably ended. Referring to the concluded settlement
agreements, the insurers will pay the sum amounting to 1 200 00 Euros in favour of Panevezio
statybos trestas AB, and Panevezio statybos trestas AB will waive all its claims against the insurers
and the former CEO, D. Gesevicius.
54
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 regula-
tion, 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), geopolitical changes in Lithuania and the countries
where the Group companies operate, Russia's military invasion of Ukraine, and remaining risks re-
lated to COVID-19. 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 Sep-
arate Financial Statements (Note 4) and Consolidated Financial Statements (Note 4). Legal uncer-
tainties are provided in the Notes to the Separate Financial Statements (Note 28) and Consolidated
Financial Statements (Note 27).
10. Analysis of financial and non-financial performance, information related to environmen-
tal and employee matters
In 2023, the consolidated revenue of the Group of Panevezio statybos trestas AB amounted to
119.828 mln. Euros, whereas in 2022 the consolidated revenue was 115.84 mln. Euros. Over the
reporting period, the net profit of the Group amounted to 3.322 mln. Euros and in 2022 the Group
had the net profit in the amount of 0.525 mln. Euros.
In May 2023, Baltevromarket OOO (Russia, Kaliningrad), the subsidiary company of PST investici-
jos UAB was liquidated. Liquidation of this company have had a significant impact on the results of
the Group. Elimination of the company resulted in additional income from financial activities for the
Group amounting to 3.8 mln. Euros.
Baltevromarket OOO is the last liquidated Russian company in the balance of the Group.
Over the year of 2023, the turnover of Panevezio statybos trestas AB amounted to 80.751 mln. Euros,
and in 2022 the turnover of Panevezio statybos trestas AB was 79.222 mln. Euros.
In 2023, Panevezio statybos trestas AB has suffered the net loss in the amount of 2.279 mln. Euros,
the net loss in 2022 was 1.720 mln. Euros.
55
Table 2. Performance (thousands Euros) of the Company and the Group of Panevezio statybos tres-
tas AB for the period 2021 through 2023:
Group
Items
Company
2021
2022
2023
2021
2022
2023
98,451
115,840
119,828
Revenue
65,721
79,22
80,751
68,283
106,310
107,588
Cost of sales
59,888
77,066
76,909
12,168
9,530
12,240
Gross profit
5,833
2,156
3,842
12.36
8.23
10.21
Gross profit margin (per cents) (API)
8.88
2.72
4.76
2,414
-1,067
440
Typical operating result
-589
-4,978
-4,221
2.45
-0.92
0.37
Typical operating result from turno-
ver (per cents)
-0.90
-6.28
-5.23
3,477
266
1,638
EBITDA
1
(API)
259
-4,192
-3,551
3.53
0.23
1.37
EBITDA margin (per cents) (API)
0.39
-5.29
-4.40
3.499
525
3,322
Net profit (API)
304
-1,720
-2,279
3.55
0.45
2.77
Nets profit (loss) margin (per cents)
0.46
-2.17
-2.82
0.214
0.032
0.203
Earnings per share (Euros) (EPS)
2
(API)
0.019
-0.105
-0.139
12.58
1.75
10.89
Return on equity (per cents) (ROE)
3
(API)
1.38
-7.89
-11.22
4.41
0.60
3.81
Return on assets or asset profitabil-
ity (ROA)
4
(API)
0.55
-3.40
-4.54
6.65
0.99
6.16
Return on investments (ROI)
5
(API)
1.29
-7.67
-10.01
1.30
1.23
1.26
Current liquidity ratio
6
(API)
1.12
1.02
1.14
1.00
0.95
0.98
Critical liquidity ratio
7
(API)
0.94
0.85
0.96
0.34
0.35
0.35
Equity ratio
8
(API)
0.46
0.41
0.40
0.65
0.64
0.65
Debt ratio
9
(API)
0.54
0.59
0.60
1.90
1.82
1.85
Debt to equity ratio
10
(API)
1.19
1.46
1.49
1.79
1.88
1,85
Book value per share
11
(API)
1.35
1.31
1.17
0.37
0.28
0.26
Price-to-book ratio (P/B ratio)
12
(API)
0.49
0.39
0.41
3.08
16.13
2.34
Price-to-earnings ratio (P/E)
13
(API)
35.50
-4.92
-3.41
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).
56
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 finan-
cial performance of the Group and the Company. The description of these indicators and methodol-
ogy 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
2023, the revenue of the Group from construction and erection activities totalled 74.3 per cents, the
revenue from real estate development and rent was 2.4 per cents, the revenue from finished products
and other revenue amounted to 23.3 per cents, whereas in 2022, the revenue of the Group from con-
struction and erection activities totalled 75.5 per cents, the revenue from real estate development and
rent was 1.6 per cents, the revenue from finished products and other revenue amounted to 22.9 per
cents.
Revenue distribution by activity types for the Group:
The main activities of the Company were performed in Lithuania and made 98.01 per cents of all
works carried out by the Company in 2023 compared to 99.02 per cents in 2022. The revenue of the
Group from the works performed inside the country made 81.1 per cents of the revenue, whereas in
2022 it was 83.6 per cents. In 2023 and 2022, the revenue of the Group in the Scandinavian countries
was respectively 17.1 and 15.25 per cents of total revenue.
Operating revenue distribution by countries for the Company:
57
Operating revenue distribution by countries for the Group:
Environment protection
Work quality, sustainability, environment protection, occupational health and safety play a very im-
portant role in activities of Panevezio statybos trestas AB. Quality Management (ISO 9001), Envi-
ronmental Management (ISO 14001) and Occupational Health and Safety Management (OHSAS
18001) Systems introduced and available at the Company allow taking proper care of these signifi-
cant 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 en-
vironmental plan including specific measures for control of significant aspects of environment pro-
tection and activities performed is prepared.
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.
In 2023, the Lithuanian National Accreditation Bureau accredited the Construction Laboratory of the
Company according to LST EN ISO/IEC 17025:20185 thus granting it the right to perform tests of
building materials for the period of 5 years.
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 im-
plementation 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 environ-
ment.
As of 31 December 2023, the number of employees in the Group was 762, in the Company – 491.
As of 31 December 2022, the number of employees in the Group was 805, in the Company – 536.
58
Table 3. Average number of employees in 2022 and 2023:
Average number of em-
ployees
2022
2023
Group
Company
Group
Company
Managers
22
11
22
11
Specialists
304
224
309
229
Workers
486
310
519
336
Total
813
544
850
576
Table 4. Education level of the Group employees as of the end of the period:
PST Group
employees
Payroll
number
Higher uni-
versity level
education
Higher non-
university
education
Junior col-
lege educa-
tion
Secondary
education
Incomplete
secondary
education
Managers
22
21
0
1
0
0
Specialists
288
214
37
22
15
0
Workers
452
19
8
64
324
37
Total
762
254
45
87
339
37
Employment contracts do not include any special rights and obligations of employees or some part
of them.
In 2023, the Company also paid much attention to qualification improvement, safety (zero fatalities),
welfare, diversity, equality and involvement of employees. 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 continually pay much attention to increase of operational
management efficiency, improvement of construction work quality and introduction of modern tech-
nologies. We are looking for the ways to make activities more efficient, apply innovative and re-
source-saving process management methods, improve working conditions of employees, improve
quality of services.
Realizing that construction activities leave a fairly significant footprint for nature and people, we
make emphasis on the sustainability issue in our operation. We strive to analyse the impact of our
operation on the environment and implement the solutions to consistently reduce the emissions of
CO
2
,
negative influence on the health of our employees, surrounding communities and nature.
By optimizing production processes, we aim to reduce the amount of energy used in our activities.
We invest in more effective work equipment, technologies allowing to generate and use green en-
ergy.
59
To maintain the highest competence in the construction sector, the Company in cooperation with our
partners strives for a wider application of the digital model (BIM) principles in development project
management.
13. Operation plans and forecasts of the Company and the Group
In 2023, the Lithuanian construction market was significantly influenced by the overall macroeco-
nomic situation of the country and the whole Europe. Economic activity was reduced throughout the
EU, and many countries, including Lithuania, were in fixed recession. The change in real GDP in
Lithuania was negative by about -0.2%. This had a direct impact on the slowdown of investments,
including in the real estate sector. Panevezio statybos trestas AB always diversifies projects in pro-
gress according to different sectors, i.e. implements construction projects in the residential, indus-
trial, logistics, green energy, and public sectors. This guarantees a stable portfolio of the Company.
Despite the difficult geopolitical situation, in 2024 economic forecasts show a positive trend, growth
of about 1.5% of GDP in Lithuania is expected. The existing portfolio of signed contracts-construc-
tion projects allows Panevezio statybos trestas AB to forecast growth. The companies of Panevezio
statybos trestas AB forecast maintaining stable activity volumes.
In 2024, the Company and the Group will continue to investing in making processes more efficient
through digitization, implement innovations, and sustainably develop activities taking into account
the benefits for clients, employees, business partners and shareholders.
14. Authorised capital of the issuer and its structure
As of 31 December 2023, the authorised capital of the Company amounted to 4,741,500 Euros di-
vided 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 2023, the total number of the shareholders was 1,759.
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
1,351,015
8.3%
Natural persons
1,401,132
8.6%
Local investors
Legal entities
9,850,635
60.2%
Natural persons
3,747,218
22.9%
Table 6. Shareholders holding or controlling more than 5 per cents of the authorised capital of the
Company:
Full name of a shareholder (com-
pany name, type, headquarter ad-
dress, company code)
Number of ordinary reg-
istered shares held by a
shareholder under own-
ership right (pcs.)
Portion of the
authorized cap-
ital held (%)
Portion of votes
granted by the shares
held under ownership
right (%)
HISK AB
S. Kerbedzio Str. 7, Panevezys
Company code: 147710353
8,138,932
49.78
49.78
Freely floating shares
(shareholders holding or controlling
less than 5 percents of authorized capi-
tal)
8,211,068
50.22
50.22
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.
60
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 Gen-
eral 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.
The Ordinary General Meeting of Shareholders of Panevezio statybos trestas AB that took place on
27 April 2023 did not come to the decision to pay dividends.
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/investu-
otojams and on the stock exchange NASDAQ Vilnius AB (www.nasdaqomxbaltic.com).
61
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 Com-
pany, 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 mem-
bers, which are elected for the period of four years. The members of the Board represent the share-
holders 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, includ-
ing 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, business 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 of-
fered 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 the 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.
62
The business risk is related to the Group's entry into new markets, segments, management of availa-
ble 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 pro-
jects for industrial, engineering, environmental and residential buildings. Before starting new pro-
jects, 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 col-
lected, 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.
The operational risk constitutes the risk of probability to incur losses due to people, systems, inade-
quate internal processes or their failure, effects of external events, including legal risks. For the pur-
poses of operational risk management, the Group implements appropriate measures to ensure func-
tioning 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 con-
trol 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 Share-
holders 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
63
resolution amending the Articles of Association is adopted following the procedure set forth in the
Law on Companies of the Republic of Lithuania.
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 https://www.pst.lt/en/pst-istatai-ir-audito-nuostatai.
Information on powers of General Meeting of Shareholders, rights of shareholders and their exer-
cising
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 Chair-
man. 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 Com-
pany – 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 Manag-
ing 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.
On 30 October 2023 at the Extraordinary General Meeting of Shareholders the independent member
of the Board Vaidas Grincevicius was removed from office and Darijus Vilcinskas was elected as an
independent member to the Board.
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 HISK 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);
Board Member at PST investicijos UAB (company code 124665689, Ukmerges Str. 219, Vilnius);
Board Member at Lauktuves Jums UAB (company code 147797155, Laisves Sq. 26, Panevezys).
64
Board Member at Gustoniu zemes ukio technika UAB (company code 168581940, S. Kerbedzio
Str. 7F, Panevezys)
As of 31 December 2023, held no shares of the Company.
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 (com-
pany code 110564826, Pusaloto Str. 212, Panevezys).
Participation in activities of other companies:
Chairman at HISK 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 2023, held 5 (five) shares of the Company, a shareholder of HISK AB.
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 HISK AB (company code 147710353, S.
Kerbedzio Str. 7, Panevezys).
Participation in activities of other companies:
Board Member at HISK 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 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 2023, 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), Board Member.
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 Elder-
ship, Panevezys District Municipality);
Chief Accountant at Stenrosus UAB (company code 300007108, B. Sruogos Str. 6-14, Vilnius);
As of 31 December 2023, held no shares of the Company.
DARIJUS VILCINSKAS, independent Board Member
Educational background: Vilnius Gediminas Technical University (VILNIUS TECH), Master De-
gree.
Place and position of employment: Director at VIP Centras UAB, Director at VK Invest UAB; Di-
rector at Restoda UAB.
Participation in activities of other companies:
Board Member at Hunting Club Truskava.
As of 31 December 2023, held no shares of the Company.
65
Administration:
TOMAS STUKAS – Head of Administration, Managing Director of the Company. Education – Vil-
nius Gediminas Technical University, Bachelor in Industrial Engineering, Vilnius Gediminas Tech-
nical University, Master in Industrial Engineering.
As of 31 December 2023, held no shares of the Company
DANGUOLE SIRVINSKIENE – Chief Accountant of the Company. Holds no shares of the Com-
pany. University education (LZUA), Accounting - Economics.
As of 31 December 2023, held no shares of the Company.
In 2023, 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 Commit-
tee 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 27 April 2023:
Drasutis Liatukas – an independent auditor, CEO of Finansu auditorius UAB, auditor. Holds no
shares of the Company;
Irena Kriauciuniene – an independent auditor. Holds no shares of the Company;
Lina Rageliene –Accountant at Panevezio statybos trestas AB. 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 supervi-
sory 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.
Consolidated Report of Social Responsibility
The Consolidated Report of Social Responsibility for the Group has been prepared in accordance
with the standards of the Global Reporting Initiative and is provided in the Appendix of the Annual
Report Social Responsibility and Sustainability Report for 2023.
66
Consolidated Remuneration Report
The Remuneration Report of Panevezio statybos trestas AB has been prepared for the reporting fi-
nancial period of the year 2023. The report has been prepared in accordance with the Law on Finan-
cial Reporting of Enterprises of the Republic of Lithuania, the Ordinary General Meeting of Share-
holders 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 2022
was approved at the General Meeting of Shareholders on 27 April 2027 together with the Set of
Financial Statements for 2022.
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 per-
forming 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 2023 is provided below. The Extraordinary General Meeting of Share-
holders held on 27 April 2023 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 7. Information on remuneration of supervisory body members of the issuer in 2023:
Full name
Position
Remuneration
of independent
member of the
Board,
total for 2023
(Euros)
Total income
from the com-
pany for 2023
(Euros)
Justas Jasiunas
Chairman
-
75,600
Gvidas Drobuzas
Board Member
-
148,645
Kristina Maciuliene
Board Member
-
-
Vaidas Grincevicius* (Jan. through Oct.)
Board Member
32,850
-
Lina Simaskiene*
Board Member
39,600
-
Darijus Vilčinskas* (Oct. through Dec.)
Board Member
6,750
Total
79,200
224,245
* an 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.
67
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 2023 the salary fund attributed to the Company's employees amounted to 16.324 mln.
Euros compared to 14.520 mln. Euros in 2022.
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 achieve-
ments 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 full text of Renumeration Policy is pro-
vided at https://www.pst.lt/en/pst-istatai-ir-audito-nuostatai.
The Company does not provide for the possibility to restore variable remuneration.
The average monthly salary of employees (FRC and VRC) for the period 2019 through 2023 is pro-
vided in the tables below.
Table 8. Average monthly salary for employees of the Group, Euros (before taxes)
Position category
2023
2022
2021
2020
2019
Average
salary
Average
salary
Average
salary
Average
salary
Average
salary
Managing Director
9993
9281
8863
7626
Top Management Staff
6049
5528
5107
5323
4524
Middle Management Staff
4713
4428
4297
3478
3216
Specialists
2754
2380
2192
1806
1753
Workers
2097
1646
1380
1319
1322
Total
2458
2020
1800
1583
1569
Table 9. Average monthly salary for employees of the Group, Euros (before taxes)
Position category
2023
2022
2021
2020
2019
Average
salary
Average
salary
Average
salary
Average
salary
Average
salary
Top Management Staff
5569
5019
4482
3957
4083
Specialists
2788
2436
2167
1871
1752
Workers
2122
1649
1407
1363
1322
Total
2471
2048
1787
1622
1569
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 expe-
rience. Remuneration determined in the Employment Contract, taking into account the level of posi-
tion 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.
68
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 objec-
tives. 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 10. Company performance and average monthly gloss salary for the period 2019 through
2023
Company performance
2023
2022
2021
2020
2019
Net profit (loss) (thousands Euros)
-2,279
-1,720
304
-12,418
590
Profit (loss) per share (Euros)
-0.139
-0.105
0,019
-0.76
0.036
Assets (thousands Euros)
47,727
52,762
48,478
62,290
71,337
Average monthly salary
2,458
2,040
1,800
1,583
1,569
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.
69
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 on Securities of the Republic of Lithuania and paragraph 24.5 of the Listing Rules of
Nasdaq Vilnius AB, hereby discloses how it complies with the Corporate Governance Code for the Compa-
nies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In case of non-compli-
ance with this Code or some of its provisions or recommendations, the specific provisions or recommenda-
tions 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 govern-
ance 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 (supervi-
sory 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 func-
tions. 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 infor-
mation on the total amounts of money calculated during the reporting period to the members of the Manage-
ment Board of the Company, the Chief Executive Officer.
The management system of the Company ensures that any information on all essential issues, including fi-
nancial 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.
70
1.1. All shareholders should be provided with ac-
cess to the information and/or documents estab-
lished in the legal acts on equal terms. All share-
holders 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 ac-
cordance with legal acts is published in Lithua-
nian and English via informational system of
stock-exchange Nasdaq Vilnius and on the web-
site 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 at-
tached 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 Com-
pany.
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 share-
holders.
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 partici-
pate 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 pre-
vent active participation of shareholders at the gen-
eral 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 Re-
public of Lithuania.
71
1.6. With a view to ensure the right of shareholders
living abroad to access the information, it is rec-
ommended, where possible, that documents pre-
pared 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 recom-
mended that the minutes of the general meeting of
shareholders after the signing thereof and/or
adopted decisions should be made available pub-
licly not only in Lithuanian language but also in
English and/or other foreign languages. It is rec-
ommended that this information should be placed
on the website of the company. Such documents
may be published to the extent that their public dis-
closure is not detrimental to the company or the
company’s commercial secrets are not revealed.
Yes
All information for shareholders, notices on con-
vocation 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 sys-
tem of NASDAQ 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 meet-
ings of shareholders via electronic means of com-
munication. In such cases the security of transmit-
ted information must be ensured and it must be
possible to identify the participating and voting
person.
No
The Company does not comply with the provi-
sions of this recommendation, as it is not possible
to ensure text protection and identify the signa-
ture of a voting person. Furthermore, in the opin-
ion 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 communica-
tion.
72
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 pro-
posed 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 pro-
vided to the shareholders at the General Meeting
of Shareholders with the item related to the elec-
tion of the members of the Management Board
on the agenda in accordance with the procedure
established by the Law on Companies of the Re-
public 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 man-
agement 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. Pro-
posed 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 Gen-
eral 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 opera-
tions 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, hav-
ing 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 manage-
ment 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.
73
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 in-
formed about the company’s strategy, risk man-
agement 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 deci-
sions without an external influence from the per-
sons 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. Independent
2
mem-
bers of the supervisory board should: a) maintain
independence of their analysis and decision-mak-
ing; 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 super-
visory board is provided with sufficient resources
(including financial ones) to discharge their duties,
including the right to obtain all the necessary in-
formation or to seek independent professional ad-
vice from external legal, accounting or other ex-
perts 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.
74
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 qualifi-
cations, professional experience and competences
and seek for gender equality. With a view to main-
tain 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 individ-
ual re-election for a new term in office in order to
ensure necessary development of professional ex-
perience.
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 for-
mer 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 recommen-
dations, it should provide information on the
measures taken to ensure impartiality of the super-
vision.
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 super-
visory board should undertake to limit his other
professional obligations (particularly the manag-
ing 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 com-
pany, the shareholders of the company should be
notified thereof.
Not applicable
See item 2.1.1.
75
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 circum-
stances.
Not applicable
See item 2.1.1.
2.2.6. The amount of remuneration to members of
the supervisory board for their activity and partici-
pation in meetings of the supervisory board should
be approved by the general meeting of sharehold-
ers.
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 supervi-
sory 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 re-
spective 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 govern-
ance 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 ap-
proved by the supervisory board if the latter has
been formed at the company. In such cases where
the supervisory board is not formed, the manage-
ment 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 su-
pervisory functions, discusses and approves the
strategy of the Company, analyses and evaluates
information on implementation of the strategy of
the Company.
76
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 arti-
cles 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 com-
pany’s shareholders, employees and other interest
groups by respectively striving to achieve sustain-
able 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 share-
holders.
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 manage-
ment and control measures aimed at ensuring reg-
ular 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 guid-
ance.
3.1.5. When appointing the manager of the com-
pany, the management board should take into ac-
count the appropriate balance between the candi-
date’s qualifications, experience and competence.
Yes
When appointing the Chief Executive Officer,
the Board takes into account the candidate's qual-
ifications, 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 supervi-
sory board is not formed, by the general meeting of
shareholders should collectively ensure the re-
quired diversity of qualifications, professional ex-
perience 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 compe-
tent to perform their functions, have a long expe-
rience in management.
At present the Management Board fails to main-
tain gender equality. All members of the Man-
agement Board are male. At present females
make 40 per cents of the members of the Man-
agement Board, i. e. two females and three males.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-brib-
ery/44884389.pdf
77
3.2.2. Names and surnames of the candidates to
become members of the management board, infor-
mation on their educational background, qualifica-
tions, professional experience, current positions,
other important professional obligations and po-
tential 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 manage-
ment board should, on yearly basis, collect data
provided in this paragraph on its members and dis-
close it in the company’s annual report.
Yes
Information on the positions taken by the mem-
bers of the Management Board or their participa-
tion in operation of other companies is continu-
ously collected and compiled, and at the end of
every year it is revised and presented in the re-
ports 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 Com-
pany.
3.2.4. Members of the management board should
be appointed for a specific term, subject to individ-
ual re-election for a new term in office in order to
ensure necessary development of professional ex-
perience 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 pre-
scribed by the Law on Companies of the Repub-
lic of Lithuania. Individual members of the Man-
agement Board or the entire Management Board
may be recalled by the General Meeting of
Shareholders before the end of their term of of-
fice.
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 immedi-
ately appointed as chair of the management board.
When a company decides to depart from these rec-
ommendations, it should furnish information on
the measures it has taken to ensure the impartiality
of supervision.
Yes
The Chairman of the Management Board repre-
sents the main shareholder and has never been
the Chief Executive Officer of the Company.
78
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 suffi-
cient time to perform their duties as a member of
the collegial body.
In 2023 there were 19 (nineteen) meetings of the
Management Board where four members partic-
ipated in all the meetings and one member par-
ticipated in fifteen meetings.
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 com-
pany, and some of its members will be independ-
ent4, 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 cri-
teria of independence established by the Law,
he/she cannot be considered independent due to
special personal or company-related circum-
stances.
No
Two independent Board Members are Vaidas
Grincevicius and Lina Simaskiene. 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 remunera-
tion 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 Meet-
ing of Shareholders approved the Procedure for
Awarding and Paying Remuneration to Inde-
pendent 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.
3.2.9. The members of the management board
should act in good faith, with care and responsibil-
ity for the benefit and the interests of the company
and its shareholders with due regard to other stake-
holders. 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 com-
pany’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.
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.
79
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 manage-
ment 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 manage-
ment board should, at least once a year, make pub-
lic respective information about its internal struc-
ture 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 supervi-
sory functions. However, the collegial body en-
sures 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 supervi-
sory board. The management board should regu-
larly and, where necessary, immediately inform
the supervisory board about any matters significant
for the company that are related to planning, busi-
ness development, risk management and control,
and compliance with the obligations at the com-
pany. The management board should inform he su-
pervisory board about any derogations in its busi-
ness 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.
4.2. It is recommended that meetings of the com-
pany’s collegial bodies should be held at the re-
spective intervals, according to the pre-approved
schedule. Each company is free to decide how of-
ten meetings of the collegial bodies should be con-
vened but it is recommended that these meetings
should be convened at such intervals that uninter-
ruptable resolution of essential corporate govern-
ance 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 ac-
cordance 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 Manage-
ment Board. If required, the meetings of the
Management Board are held at shorter intervals.
80
4.3. Members of a collegial body should be noti-
fied 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 meet-
ing, unless all members of the collegial body pre-
sent at the meeting agree with such change or sup-
plement to the agenda, or certain issues that are im-
portant to the company require immediate resolu-
tion.
Yes
The members of the Management Board are no-
tified of the meeting being convened and its
agenda in advance. All members of the Manage-
ment Board get all materials relevant to the issues
on the agenda in advance and have an oppor-
tunity to get familiarised with them and ask ques-
tions before and during the meeting, have the
right to request to supplement or clarify the ma-
terials 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 com-
pany’s collegial supervision and management bod-
ies 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 con-
cerning the removal of the management board
members, their responsibility or remuneration are
discussed.
Not applicable
The Company does not have a Supervisory
Board.
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 deci-
sion should be adopted by the collegial body.
81
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 manage-
ment is the Management Board performing
the functions of Nomination Committee and
the Remuneration Committees. The Manage-
ment Board selects and approves the candi-
dacy of the Chief Executive Officer of the
Company – Managing Director and agrees
with the candidacies of Directors of the Com-
pany 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 se-
lects the candidate for the external auditor and
provides proposals to the General Meeting of
Shareholders for approval.
On 27 April 2023, 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 ex-
plain in detail why they have chosen the alternative
approach, and how the chosen approach corresponds
with the objectives set for the three different commit-
tees.
Yes
5.1.3. In the cases established by the legal acts the
functions assigned to the committees formed at com-
panies 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.
5.1.4. Committees established by the collegial body
should normally be composed of at least three mem-
bers. Subject to the requirements of the legal acts,
committees could be comprised only of two members
as well. Members of each committee should be se-
lected on the basis of their competences by giving pri-
ority 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 re-
quirements for independence. The Audit
Committee is elected for the period of one
year.
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).
82
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 perfor-
mance on a regular basis. The authority of each com-
mittee 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 ba-
sis). 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 perfor-
mance.
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 regula-
tions specifying the rights and duties of the
Audit Committee, size of the Audit Commit-
tee, term of office in the Audit Committee, re-
quirements for education, professional experi-
ence and principles iof independence.
The approved Rules of the Audit Committee
are published on the website of the Company.
In 2023, there were 2 meetings of the Audit
Committee held where all members of the Au-
dit 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 commit-
tees should normally have a right to participate in the
meetings of the committee only if invited by the com-
mittee. A committee may invite or request that certain
employees of the company or experts would partici-
pate 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.
83
5.2. Nomination Committee
5.2.1. The key functions of the nomination commit-
tee should be the following:
1) to select candidates to fill vacancies in the mem-
bership 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 experi-
ence 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 bod-
ies as well as the skills, knowledge and activity of its
members, and provide the collegial body with recom-
mendations 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 Man-
agement 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 relation-
ships with the company and the heads of the admin-
istration, the manager of the company should be con-
sulted by granting him/her the right to submit pro-
posals 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 re-
muneration policy applied to members of the super-
visory and management bodies and the heads of the
administration for approval. Such policy should in-
clude 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 com-
pany’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).
84
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 recommenda-
tion.
On 27 April 2023, the Audit Committee was
elected at the Annual General Meeting of
Shareholders. The Audit Committee is com-
posed of three members, two of which con-
form 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 Share-
holders.
5.4.2. All members of the committee should be pro-
vided with detailed information on specific issues of
the company’s accounting system, finances and op-
erations. 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 ap-
proaches.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of Share-
holders.
All members of the Committee are provided
with detailed information on specific issues of
the accounting system, finances and opera-
tions 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 manage-
ment bodies present.
Yes
The Audit Committee organizes its activities
in accordance with the Rules of the Audit
Committee approved at the Meeting of Share-
holders.
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 in-
formed about the work program of external auditors
and should receive from the audit firm a report de-
scribing 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 Share-
holders. The Audit Committee is provided
with the information mentioned listed herein
from independent audit firm.
No internal audit function exists at the Com-
pany/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 Fi-
nancial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the
Bank of Lithuania.
85
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 poten-
tial violations committed at the company and should
also ensure that there is a procedure in place for pro-
portionate and independent investigation of such is-
sues 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 Share-
holders.
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 ac-
tivity 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 pe-
riod.
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 fi-
nancial 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 con-
cerned.
Any member of the company’s supervisory and man-
agement 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 oc-
cur, a member of the company’s supervisory or man-
agement 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 con-
flict 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 com-
pany’s remuneration policy and its long-term strategy.
7.1. The company should approve and post the re-
muneration 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.
86
7.2. The remuneration policy should include all
forms of remuneration, including the fixed-rate re-
muneration, performance-based remuneration, fi-
nancial 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 de-
fines the renumeration components and estab-
lished the principles of its award and payment.
7.3. With a view to avoid potential conflicts of in-
terest, the remuneration policy should provide that
members of the collegial bodies which perform the
supervisory functions should not receive remunera-
tion 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 suffi-
cient information on the policy regarding termina-
tion payments. Termination payments should not ex-
ceed 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 pay-
ments should not be paid if the contract is terminated
due to inadequate performance.
Yes
The Company complies with this recommen-
dation 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 re-
tention of shares after the award thereof. Where re-
muneration 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 colle-
gial 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.
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 remuner-
ation policy was implemented during the previous fi-
nancial 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, com-
pared to the previous financial year.
Yes
The Company publishes information about the
implementation of the remuneration policy in
the Annual Report.
87
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 un-
der which members and employees of a colle-
gial 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 mu-
tual agreements and encourage active cooperation between companies and stakeholders in creating the com-
pany 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 stake-
holders are protected.
Yes
The Company protects all rights of the stake-
holders, allows the stakeholders to participate
in corporate governance in the manner pre-
scribed 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, con-
sultations with employees or their representatives on
corporate governance and other important matters,
participation of employees in the company’s author-
ized capital, involvement of creditors in corporate
governance in the cases of the company’s insol-
vency, etc.
Yes
The Company complies with this recommenda-
tion.
For example, the Company has a Co-operation
Agreement signed with the Works Council.
According to the signed agreement, the Com-
pany informs the representatives of the Council
about the financial position of the Company,
employer’s status, expected changes, etc.
8.3. Where stakeholders participate in the corporate
governance process, they should have access to rel-
evant 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 infor-
mation and vote in adopting decisions.
8.4. Stakeholders should be provided with the pos-
sibility of reporting confidentially any illegal or un-
ethical practices to the collegial body performing the
supervisory function.
Yes
The stakeholders may submit anonymous re-
ports to the collegial body.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corpo-
rate issues, including the financial situation, operations and governance of the company.
88
In accordance with the company’s procedure on con-
fidential 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:
• operating and financial results of the com-
pany;
Yes
The operating and financial results of the Com-
pany 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.
• objectives and non-financial information of
the company;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the Com-
pany.
• 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 re-
lationships 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.
• members of the company’s supervisory and
management bodies who are deemed independ-
ent, the manager of the company, the shares or
votes held by them at the company, participa-
tion in corporate governance of other compa-
nies, their competence and remuneration;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the Com-
pany.
• reports of the existing committees on their
composition, number of meetings and attend-
ance of members during the last year as well as
the main directions and results of their activi-
ties;
Yes
Information on composition, number of meet-
ing and attendance of members of the existing
committees is published in the Intermediate
Semi-annual and Annual Reports of the Com-
pany.
• 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 Com-
pany.
• the company’s transactions with related par-
ties;
Yes
Information is published in the Intermediate
Semi-annual and Annual Reports of the Com-
pany.
• main issues related to employees and other
stakeholders (for instance, human resource pol-
icy, 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 un-
der which employees receive remuneration in
shares, share options or other rights to share ac-
quisition.
89
• structure and strategy of corporate govern-
ance;
Yes/No
Information is published in the Intermediate
Semi-annual and Annual Reports of the Com-
pany.
• initiatives and measures of social responsibil-
ity policy and anti-corruption fight, significant
current or planned investment projects.
This list is deemed minimum and companies are en-
couraged 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 Com-
pany.
When disclosing the information specified in para-
graph 9.1.1 of recommendation 9.1, it is recom-
mended that the company which is a parent company
in respect of other companies should disclose infor-
mation about the consolidated results of the whole
group of companies.
Yes
The Company complies with the recommenda-
tion and discloses information about the results
of the Company and the Group of its subsidiar-
ies. The information is published in the Inter-
mediate Semi-annual and Annual Reports of
the Company.
When disclosing the information specified in para-
graph 9.1.4 of recommendation 9.1, it is recom-
mended that the information on the professional ex-
perience and qualifications of members of the com-
pany’s supervisory and management bodies and the
manager of the company as well as potential con-
flicts 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 recommenda-
tion in provided in the Annual and Semi-annual
Reports of the Company.
90
Information should be disclosed in such manner that
no shareholders or investors are discriminated in
terms of the method of receipt and scope of infor-
mation. Information should be disclosed to all par-
ties concerned at the same time.
Yes
The Company discloses the information via the
information disclosure system used by the Vil-
nius Stock Exchange in the Lithuanian and
English languages simultaneously. The Com-
pany 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 in-
formation 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 re-
sults, 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 au-
diting 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 inde-
pendent 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 re-
muneration from the company for the non-audit ser-
vices provided, the company should disclose this pub-
licly. 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 share-
holders.
Yes
In 2023, the firm of auditors provided no ser-
vices other than auditing.
SOCIAL
RESPONSIBILITY
AND SUSTAINABILITY
REPORT
2023
CONTENT
Social Responsibility and Sustainability Report 2023
2
CEO LETTER 3
SUSTAINABILITY IN THE GROUP 6
ENVIRONMENTAL AREA 17
SOCIAL AREA
23
GOVERNANCE AREA 35
INDEX
42
ABOUT THE SUSTAINABILITY
REPORT 4
BRIEFLY ABOUT THE GROUP 5
Main sustainability principles 7
Sustainability management 8
Stakeholder involvement 9
Materiality matrix 9
Key sustainability topics 11
EU Taxonomy alignment overview 12
CO2 emissions reduction and energy
efficiency
18
Waste reduction and resource
management
20
Water conservation and pollution
reduction
21
Environmental impact of buildings and
services
22
Employees and their diversity 24
Diversity, equality and inclusion 26
Employee safety and wellbeing 28
Employee training and education 30
Building an internal culture of
sustainability
32
Positive impact on local communities
33
Human rights 34
Business ethics 36
Sustainability in the supply chain 38
Innovation and operational efficiency 39
Quality of services and buildings 40
Risk management 41
GRI index
42
UN Global Compact Principles
45
CEO
LETTER
As one of the largest construction groups in Lithuania, we consider sustainability
an integral part of our business. I am pleased to present our latest Sustainability
Report, which reflects our environmental, social, and governance achievements
and ambitions. In this report, we have included the issues that matter most to our
customers, employees, shareholders, suppliers and partners, considering their
sustainability expectations.
Our sustainability and responsibility principles are based on global agreements
and recommendations. We commit to adhering to the guidelines set out by the
United Nations Global Compact, contributing to the Sustainable Development
Goals, and following other generally accepted principles of social responsibility.
In the environmental area, reducing the environmental impact of buildings and
services, waste management and resource efficiency, and reducing CO2
emissions remain our priorities. By investing in solar energy projects and sourcing
100% of our electricity from renewable sources, we are committed to reducing
CO2 emissions and contributing to climate change mitigation. We strive not only to
improve our environmental impact but also to set an example for other
organisations. Last year, the Lithuanian Confederation of Industrialists (LCI) also
noticed our efforts, recognising the Lazdynai swimming pool construction project
as the Product of the Year and awarding it with the gold medal of the "Lithuanian
Product of the Year 2023".
On the social area, our efforts are focused on the safety and well-being of our
employees. Vision Zero for Accidents at Work continues to be our primary
objective. In 2023, we introduced an e-learning platform to enhance occupational
health and safety knowledge, improving the safety and efficiency of the working
environment. Through various projects and events, we have worked to create and
foster an internal culture of sustainability.
In governance (economic) area, we do our best to foster a culture of ethical
business, ensure the high quality of the projects we carry out, manage risks, and
strengthen our cooperation with partners to provide the necessary innovations and
the smooth introduction of technology.
Chief Executive Officer
Tomas Stukas
3
This Sustainability Report provides a comprehensive overview of our performance
and commitment to sustainability in each business area. We will continue to
pursue sustainability initiatives, considering stakeholders' expectations and
suggestions. For us, sustainability means not only responsibility but also an
opportunity to grow and develop together with our community and society.
I am grateful to all our employees, partners and stakeholders for their
commitment, contribution and continued support on our sustainability journey.
GRI 2-22
Social Responsibility and Sustainability Report 2023
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
ABOUT THE SUSTAINABILITY
REPORT
4
This Social Responsibility and Sustainability Report (hereinafter the Sustainability
Report) of the public limited liability company Panevezio statybos trestas
(hereinafter the Company; PST), registered in Lithuania at P. Puzino g. 1, LT-35173
Panevezys, and its subsidiaries (hereinafter jointly called the Group), is published in
April 2024 for the period from 1 January 2023 to 31 December 2023.
The information presented in this report includes consolidated information of all
Group companies, in some cases highlighting the data of Panevezio statybos
trestas AB. Subsidiaries have no separate sustainability reports produced.
The Group's sustainability report is compiled by the Global Reporting Initiative (GRI)
standards 2021 updated version. The Sustainability Report is presented for the
same period as the annual financial statements. This report is integrated into the
Company’s and Consolidated Annual Report, which is audited by an independent
external auditor; having read the sustainability section of the report, the auditor
confirmed its conformity to the Law of the Republic of Lithuania on Financial
Reporting by Undertakings. The Company’s and Consolidated Annual Report
(together with the Sustainability Report) is approved by the Board and then
presented to the General Meeting of Shareholders.
The Sustainability Report presents the Company's and its subsidiaries'
achievements and aspirations in the environmental, social and governance (ESG)
areas. This report reveals how the Group contributes to the United Nations
Sustainable Development Goals (SDGs) and adheres to the principles of the Global
Compact.
The report is prepared in consultation with external sustainability experts but is not
audited. The information contained in the Sustainability Report complies with the
requirements for the Social Responsibility Report of the Republic of Lithuania and
the guidelines for non-financial reporting of the European Commission.
In 2023, when applying the GRI Standards, the Group focused on conducting
materiality analysis, interviewing stakeholders and developing a materiality matrix
to identify the information most relevant to stakeholders. This Sustainability Report
represents the best available data at the time of publication. Still, in the future the
Group will strive to improve further the quality of the information provided in the
Sustainability Reports and to fully and accurately disclose all relevant
performance indicators.
Questions or feedback on this report
and the Group's sustainability activities
can be sent to the following contacts:
Economist R. Kairienė:
rkairiene@pst.lt
GRI 2-1 GRI 2-2 GRI 2-3 GRI 2-4 GRI 2-5 GRI 2-14
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BRIEFLY ABOUT
THE GROUP
5
Panevezio statybos trestas AB, together with its Group companies, is one of the
largest construction companies in Lithuania. Operating in the construction sector
for over 70 years, the Group has delivered major and complex projects
contributing to the country's economic growth, infrastructure development, and
environmental objectives.
The Group operates in the following countries: Lithuania, Sweden, Norway, Latvia
and Poland. The Group's activities include the construction and design of
buildings, structures, facilities and communications, and other objects for various
purposes in Lithuania and beyond, the production and design of metal structures
for construction, the sale of building materials, and real estate development.
The group consists of the following companies:
GRI 2-1 GRI 2-2 GRI 2-6
Panevezio statybos trestas AB
Skydmedis UAB
Hustal UAB
Vekada UAB
Alinita UAB
Aliuminio fasadai UAB
Seskines projektai UAB
Ateities projektai UAB
PST investicijos UAB
Tauro apartamentai UAB
PS Trests SIA
Kingsbud Sp.z.o.o.
The Group's principal activities are:
Construction and design of buildings,
structures, facilities, communications, and other
objects for various purposes in Lithuania and
abroad.
Sales of building materials.
Production of some building materials.
Real estate development and management.
Subcontractors are among the Group's most important partners. As part of the
subcontractor selection process, the Company assesses the subcontractors'
qualifications. The most important requirements for subcontractors are
environmental protection, compliance with occupational safety and health
legislation, and integrity.
Further information on the nature of the Group's activities is provided in the
Company's and Consolidated Annual Report.
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Social Responsibility and Sustainability Report 2023
SUSTAINABILITY
IN THE GROUP
MAIN SUSTAINABILITY
PRINCIPLES
7
The Group aims to integrate sustainability topics into its overall business strategy
and key performance indicators. Sustainability is understood as an integral part of
the Group's activities, closely linked to its commitments to its stakeholders and key
strategic directions. The Group's principles of sustainable, responsible, and fair
business conduct are described in the Code of Conduct for Employees, Suppliers,
and Company Representatives and other applicable policies.
Key sustainability principles applied in the Group:
Embedding sustainability in three areas – environmental, social and
governance – to create balanced long-term value.
Taking into account stakeholders' expectations, honoring our commitments to
them, and engaging with them transparently and fairly when making decisions
on the Group's sustainable development.
Sticking to the common objectives set out in the European Green Deal and the
Paris Agreement on climate change.
Implementing the globally recognised good governance recommendations by
OECD.
Contributing to the United Nations Sustainable Development Goals (SDGs).
Supporting and being guided by the United Nations Global Compact principles
on human rights, employees' rights, the environment, and the prevention of
corruption.
Carrying out due diligence on environmental, social and economic impact
management.
Setting sustainability targets based on the precautionary principle, i.e., using
the most up-to-date scientific advice on the environmental protection.
GRI 2-23 GRI 2-24
The Group understands the importance of sustainable development and will seek
to further clarify the directions of its sustainability strategy, develop a framework
for embedding responsible business principles at all organisational levels, and
integrate them into operational strategy, policies, and procedures in the future.
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SUSTAINABILITY
MANAGEMENT
8
he management of the Group's environmental, social and economic impacts is
overseen by the Board and the Management Team (top management). The Board
reviews the results of impact management once a year and considers and
approves the Group's strategy. The Board puts executive managers and
employees in charge for sustainability in Company’s day-to-day operations. The
persons in charge shall report to the Board on the results of environmental, social
and economic impact management on a regular basis – at weekly, monthly and
annual meetings and as required.
The CEO immediately informs the Board of critical sustainability issues. In 2023,
there were no essential sustainability issues of particular concern in Group
companies.
Governance structure and composition
According to the Articles of Association of Panevezio statybos trestas AB, the
company's governing bodies are the General Meeting of Shareholders, the Board
(which performs a supervisory function), and the CEO — general director.
The members of the Board have supervisory and control functions. The Company
has an Audit Committee only, elected for one year. The Board exercises the
functions of the Appointment and Remuneration Committee.
The Board is composed of 5 members elected by the General Meeting of
Shareholders for four years to represent the interests of shareholders.
In 2023, the Board consisted of 3 men and two women. 2 Board members were
independent. The Chairman of the Board has not held any other significant position
(as a top manager) in the Company.
In 2023, the Audit Committee comprised one man and two women, with two
independent Audit Committee members.
For more information on the members of the Board and the Audit Committee,
including their other significant responsibilities, please refer to the section
Governance Report of the Company's and the Consolidated Annual Report.
GRI 2-13 GRI 2-15
Nomination and selection of board members
The Company's Board is elected and dismissed by the General Meeting of
Shareholders under the procedure established by the Republic of Lithuania Law
on Companies.
The company's shareholders propose candidates for the Board. Board members
must be qualified and competent to perform their functions and have years of
experience in management. At least two members must be independent, and at
least two-fifths of the Board members must be women.
To date, Board members have been selected disregarding their competencies in
sustainable development, and no specific measures were taken to improve their
knowledge of sustainability; the measures would be applied if needed.
Conflicts of Interest
Board members, employees, suppliers, and representatives of the Company are
required to disclose any situation that may give rise to a conflict of interest that
may compromise the interests of the Company in favour of their own private
interests or those of persons close to them. Situations where the personal, family,
or financial interests of employees could conflict with the interests of the
Company must be avoided.
The potential risk of conflicts of interest is assessed during the annual audit, and
the auditor issues their opinion. No conflicts of interest were identified in 2023.
Whistleblowing channels and processes to remediate negative impacts
Stakeholders can report various infringements and concerns, such as possible
ongoing or committed criminal activities, breach of administrative duty or job
responsibilities, or other offences that threaten or undermine the public interest,
by emailing skundai@pst.lt and through other channels indicated on the PST
website.
Infringement information is dealt with by the description of the procedure for
submitting and handling infringement information by PST.
Depending on the nature of the breach, PST shall, following the Company's
procedures, investigate the breach, report to management and the responsible
authorities and undertake to remedy and/or repair the damage. In the absence of
a prescribed process, the Company shall act by the law.
GRI 2-16 GRI 2-17 GRI 2-25 GRI 2-26
GRI 2-9 GRI 2-10 GRI 2-11 GRI 2-12
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STAKEHOLDER
INVOLVEMENT
9
Continuous engagement with stakeholders and assessing and responding to their
expectations is crucial for the Group's success in ensuring sustainable operations.
The Group's strategy defines five main stakeholder groups: customers,
employees, shareholders, suppliers and partners.
Stakeholders are defined as groups that find our activities highly relevant and/or
are significantly affected by our actions, as well as individuals and organisations
that significantly influence the Group. The Sustainability Report's content is based
on key stakeholders' views, needs and expectations.
Social Responsibility and Sustainability Report 2023
GRI 2-29 GRI 3-1
MATERIALITY
MATRIX
At the beginning of 2023, the Group conducted its first materiality analysis of
sustainability topics following GRI standards. The purpose of this assessment is to
identify the Group's key environmental, social, and governance topics, start
developing the Group's sustainability strategy based on these topics, and provide
detailed information on their management in sustainability reports.
The results of the materiality analysis are summarised later in this report.
Critical steps in assessing materiality:
Identification of relevant topics for sector peers.
Topics of interest to companies in the construction and other
sectors in which the Group operates were reviewed, and a list of
potential sustainability topics was compiled. Topics
recommended by other widely used sustainability standards
were also assessed.
An assessment of the topics that are most important to
stakeholders.
An anonymous survey was conducted to compile information on
the most critical sustainability topics for stakeholders. The survey
was carried out in March 2023 by sending a questionnaire to
targeted contacts from each stakeholder group. A total of 204
responses were received.
Impact and risk assessment.
Each sustainability topic has been assessed in terms of its
potential impact on the environment and society and its impact
on the Group's performance. At this stage, the Group also
discussed the principal risks and opportunities related to
sustainability and the potential financial impact on Group
companies. The final result is a materiality matrix, which is
presented further. Risks related to each sustainability topic is
described throughout the report in topic-specific sections.
1
2
3
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MATERIALITY
MATRIX
10
GRI 3-2 GRI 3-3
Water conservation and
pollution reduction
Moderately important Very important
Moderately significant Very significant
IMPORTANCE FOR STAKEHOLDERS
IMPACT ON SOCIETY, ENVIRONMENT AND THE GROUP'S PERFORMANCE
Positive impact on local
communities
Sustainability in the supply chain
Employee training and education
Waste reduction and resource
management
Environmental impact of buildings
and services
Innovation
CO2 emissions reduction and
energy efficiency
Building an internal culture of
sustainability
Employee safety and
wellbeing
Business ethics
Quality of services and
buildings
Human rights
Diversity, equality and
inclusion
Operational efficiency
Risk management
The materiality matrix outlines the social, environmental and governance topics (impacts and risks) most relevant to the Group's sustainability. These topics are all important,
but to set sustainability priorities, they are ranked according to their importance to stakeholders and their impact on society, the environment and the Group's performance.
Material topics are the issues of utmost importance to the stakeholders that significantly impact society, the environment, and the Group's results, highlighted in the matrix's
darkest colour. The management principles for all material topics are described by GRI requirements in this report, in chapters arranged by topic.
– Environmental; – Social; – Governance
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Social Responsibility and Sustainability Report 2023
Priority
sustainability
topic
Long-term direction
Sustainable Development
Goals
Environmental area
Environmental
impact of
buildings and
services
To apply and develop new
solutions and services to help
reduce the environmental
impact of buildings throughout
their life cycle.
Waste
reduction and
resource
management
To optimise production
processes to decrease the
amount of raw materials used
and reduce and recycle waste.
CO2 emissions
reduction and
energy
efficiency
To reduce the energy needed
for our operations and the
greenhouse gases (CO2)
emitted.
Social area
Employee
safety and
wellbeing
To create a safe and healthy
working environment and
improve working conditions.
Priority
sustainability
topic
Long-term direction
Sustainable Development
Goals
Social area
Human rights
To support and promote the
protection of fundamental
human rights in the Group's
activities.
-
Employee
training and
education
To ensure all employees are
given opportunities to improve
and develop their skills.
Diversity,
equality and
inclusion
To ensure equal opportunities,
prevent discrimination at work
and promote equality in
recruitment.
Governance area
Business ethics
To create and foster an ethical
business culture, prevent
corruption and bribery, and
compete fairly.
Quality of
services and
buildings
To ensure that the projects we
deliver are of high quality, meet
our clients' needs and comply
with industry standards.
Innovation
To develop and apply
innovative solutions and
introduce modern technologies
into crucial business processes.
Operational
efficiency
To apply efficient, innovative
and resource-saving process
management methods.
Risk
management
To continuously assess
operational risks and implement
measures to address and
mitigate them.
-
KEY SUSTAINABILITY
TOPICS
11
The materiality analysis identified 12 key (priority) sustainability topics that are
closely interlinked and most relevant to the Group's environmental, social, and
governance activities. The Group will continue developing its sustainability
strategy and reporting on these topics.
The United Nations Sustainable Development Goals the Group can contribute to
the most are identified and listed for each topic (if applicable). The Sustainable
Development Goals (SDGs) are a universal set of aspirations that set the direction
for global economic, social and environmental development up to 2030.
This report details the principles behind managing the sustainability topics and the
Group's performance and targets in each area.
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EU TAXONOMY
ALIGNMENT OVERVIEW
12
The European Union (EU) Taxonomy (Taxonomy Regulation 2020/852 and the
delegated acts adopted under it) is a classification system for sustainable
economic activities designed to channel private investment into environmentally
sustainable activities that contribute to the environmental objectives of the
European Green Deal. The Taxonomy regulation sets out scientific evidence-
based criteria for assessing the sustainability of an activity. The activities of those
enterprises that fall under the Taxonomy list and meet the criteria provided can be
classified as sustainable and attract green investments.
Taxonomy-eligible economic activities are defined as activities described in the
relevant delegated acts of the Taxonomy Regulation, i.e. included in the
Taxonomy. Companies that have identified that their Turnover, CapEx and/or
OpEx are related to the activities described in the Delegated Acts are required to
carry out an analysis and disclose the extent to which their activities comply with
the Taxonomy criteria with respect to these indicators. Taxonomy-aligned activity
is defined as an activity meeting the Taxonomy technical analysis criteria, i.e.
making a significant contribution to at least one of the six environmental objectives
and causing no significant harm to the other five.
In this overview, we provide information on the taxonomy-eligible activities
conducted and their compliance with the Taxonomy criteria according to the main
indicators. The methodology for calculating the indicators has been updated
compared to our last year's disclosure (described further).
TAXONOMY-ELIGIBILITY ASSESSMENT AND
CALCULATION OF INDICATORS
Turnover. The Group derives part of its revenue from taxonomy-eligible activities.
The primary economic activity of PST, construction, accounts for the majority of
the Company's revenue and corresponds in the Taxonomy to the activity labeled
Construction of new buildings. Other activities of the Company (real estate
activities, building renovation activities) that are considered taxonomy-eligible are
the Acquisition and ownership of buildings and Renovation of existing buildings.
The revenue generated by these activities is calculated accordingly, as shown in
the table provided further.
Capital expenditure (CapEx). In terms of specific acquisitions that can be
attributed to taxonomy-eligible activities in 2023, the Group acquired passenger
vehicles (Transport by motorbikes, passenger cars and light commercial vehicles)
and freight vehicles (Freight transport services by road) and a solar power plant
(Installation, maintenance and repair of renewable energy technologies). The
remaining long-term asset acquisitions have been distributed among taxonomy-
eligible activities based on revenue proportions. This allocation is necessary
because the equipment is utilized across various projects and cannot be directly
linked to a specific activity. This approach was selected as the most suitable given
the prevailing trends in Taxonomy disclosure within the construction sector.
Operating costs (OpEx). Operating costs (OpEx) are defined in the Taxonomy
Regulation as direct non-capitalised costs related to research and development,
building renovation measures, short-term leases, maintenance and repairs, etc.
According to the definition of the Taxonomy OpEx, we have calculated the total
amount of operating costs (denominator) by including only maintenance and
repair costs and short-term rentals. Similar to CapEx, the total operating costs have
been divided among taxonomy-eligible activities based on revenue proportions.
TECHNICAL SCREENING OF ACTIVITIES
So far, the Taxonomy has encompassed and implemented criteria for activities
aiding climate change mitigation and adaptation objectives (that also applies to
our taxonomy-eligible activities). By the end of 2023, the list was broadened to
incorporate criteria for activities addressing the remaining four environmental
objectives. According to the expanded list, the activities Construction of new
buildings and Renovation of existing buildings can also contribute to the transition
to circular economy objective. We have also assessed other activities identified
under the transition to circular economy objective, but have not identified any
taxonomy-eligible activities tied to this objective for projects executed in 2023. In
the future, our taxonomy-eligible activities and the methodology for calculating
indicators may change in the light of possible new official interpretations of the EU
Taxonomy.
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Our technical analysis has shown that the Group's current activities only partially
meet the Taxonomy criteria and are therefore assessed as not taxonomy-aligned.
The Group executes projects based on designs and cost estimates approved by
clients, thus it cannot guarantee alignment with Taxonomy criteria. For example,
the main activity of the Group Construction of new buildings is subject to quite
challenging climate change mitigation criteria: new buildings must meet even
higher requirements than are currently applied to buildings of the highest energy
performance class A++, which are almost energy-free.
Climate risk and vulnerability assessments have not been conducted for individual
projects or at the Group level. Consequently, the activities fail to meet one of the
'do no significant harm criteria' for climate change adaptation, which applies to all
taxonomy-eligible activities.
In line with our support for the EU Green Deal, we intend to consider the
Taxonomy Regulation in our future investment planning, so that our activities align
with the Taxonomy criteria to the extent possible.
The results of the screening are presented further using the template tables set
out in the Taxonomy.
MINIMUM SAFEGUARDS
In its activities, Panevezio statybos trestas AB ensures compliance with the
Guidelines for Multinational Enterprises of the Organization for Economic Co-
operation and Development (OECD) and the United Nations' Guiding Principles on
Business and Human Rights. The company protects and respects human rights
and has a Code of conduct for employees, suppliers and company's
representatives. Being one of the largest construction companies in Lithuania,
Panevezio statybos trestas AB recognizes, understands and assumes
responsibility for the impact of the corporate activities on the social, economic and
natural environment. The Company is committed to complying with the legislation,
regulations and agreements applicable to its operation.
13
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Social Responsibility and Sustainability Report 2023
Substantial
contribution criteria
Do no significant harm criteria
Economic activity
NACE
code(s)
Absolute
revenue
2023
Proportion of
revenue,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion of
revenue,
2023
Taxonomy-
aligned
proportion of
revenue,
2022
Category
(enabling)
Category
(transitional)
thousand
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Revenue of
environmentally
sustainable
activities(Taxonom
y-aligned) (A.1)
0
0%
0%
0%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Construction of
new buildings
F41.1,
F41.2,
F43
81649
68.14%
Acquisition and
ownership of
buildings
L68
2883
2.41%
Renovation of
existing buildings
F41,
F43
7340
6.13%
Revenue of
Taxonomy-
eligiblebut not
environmentally
sustainable
activities (not
Taxonomy-aligned
activities)(A.2)
91872
76.67%
Total: A.1 + A.2
91872
76.67%
B. Taxonomy-non-eligible activities
Revenue of
Taxonomy-non-
eligible activities (B)
27956
23.33%
TOTAL: A + B
119828
100.00%
REVENUE ACCORDING TO TAXONOMY IN 2023
14
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Social Responsibility and Sustainability Report 2023
Substantial
contribution criteria
Do no significant harm criteria
Economic activity
NACE
code(s)
Absolute
Taxonomy
CapEx in
2023
Proportion
of CapEx,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion of
CapEx,
2023
Taxonomy-
aligned
proportion of
CapEx,
2022
Category
(enabling)
Category
(transitional)
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
CapEx of
environmentally
sustainable
activities(Taxonomy-
aligned) (A.1)
0
0%
0%
0%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transport by motorbikes,
passenger cars and light
commercial vehicles
H49.32,
H49.39,
N77.11
100554
9.11%
Freight transport
services by road
H49,
H53
N77
172065
15.59%
Installation, maintenance
and repair of renewable
energy technologies
F42,
F43,
M71,
C16,
C17,
C22,
C23,
C25,
C27,
C28
113915
10.32%
Construction of new
buildings
F41.1,
F41.2,
F43
582003
52.75%
Acquisition and
ownership of buildings
L68
10143
0.92%
Renovation of existing
buildings
F41, F43
25780
2.34%
CapEx of Taxonomy-
eligiblebut not
environmentally
sustainable activities (not
Taxonomy-aligned
activities)(A.2)
1004459
91.04%
Total: A.1 + A.2
1004459
91.04%
B. Taxonomy-non-eligible activities
Taxonomy CapEx of
Taxonomy-non-eligible
activities (B)
98892
8.96%
TOTAL: A + B
1103352
100 %
CAPITAL EXPENDITURE (CAPEX) ACCORDING TO TAXONOMY IN 2023
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Substantial
contribution criteria
Do no significant harm criteria
Economic activity
NACE
code(s)
Absolute
operating
expenditure
in 2023
Percentage
of operating
expenditure,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
percentage
of operating
expenditure,
2023
Taxonomy-
aligned
percentage
of operating
expenditure,
2022
Category
(enabling)
Category
(transitional)
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Operating expenditure of
environmentally
sustainable
activities(taxonomy-
eligned) (A.1)
0
0%
0%
0%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Construction of new
buildings
F41.1,
F41.2,
F43
547169
68.10%
Acquisition and
ownership of buildings
L68
19284
2.40%
Renovation of existing
buildings
F41, F43
49012
6.10%
Operating expenditure of
Taxonomy-eligiblebut
not environmentally
sustainable activities (not
Taxonomy-aligned
activities)(A.2)
615465
76.60%
Total: A.1 + A.2
615465
76.60%
B. Taxonomy-non-eligible activities
Operating expenses of
non-taxonomy-eligible
activities (B)
188014
23.40%
TOTAL: A + B
803479
100.00%
2023 OPERATING EXPENDITURE (OPEX) ACCORDING TO TAXONOMY
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ENVIRONMENTAL
AREA
To provide a better picture and set specific and
measurable targets, PST also foresees to assess the
indirect emissions of Scope 3 for 2024.
CO2 EMISSIONS REDUCTION
AND ENERGY EFFICIENCY
The Group is responsible for a significant amount of greenhouse gases (GHGs)
emitted into the atmosphere during its activities. Therefore, this topic is identified
as one of the key impact areas to manage. Reducing emissions and increasing
energy efficiency are integral parts of the Group's strategy and will be the focus of
future annual targets and impact reduction. The Group puts great effort into
contributing to climate change mitigation and environmental protection. This is
crucial for the sustainable and long-term preservation of the environment. The
Group keeps investing in developing solar power plants and purchasing energy
from 100% renewable sources. Some Group's companies already generate
electricity to cover 100% of their needs.
The Group keeps investing in developing solar power plants and
purchasing energy from renewable sources. Some Group
companies already generate electricity to cover of their needs.
100%
In this report, the PST publishes its estimated (GHG) emissions from its activities in
CO2 equivalent. The sources of emissions and the methodologies used to
calculate them are identified, including the Scope to which the emission source
belongs. The know-how and methodologies of market-based financial institutions
and energy suppliers were used to calculate GHG emissions. The emissions
calculation was based on the Greenhouse Gas Protocol (GHG) and Global
Reporting Initiative (GRI) standards and recommendations. The calculation of
emissions includes not only CO2 but also all other greenhouse gases (CO2, NH4,
CH4, HFCs) emitted in the activity, converting them to CO2 equivalents using
standard factors and naming the final total figure as CO2-eq. Emission
consolidation method: operational control. The baseline year for calculating GHG
emissions is 2022, the first year PST has chosen to estimate its emissions.
Plans for 2024
Measurement
units
2022
2023
Change
2022/
2023
Change
2022/
2023,
t CO2 eq.
Direct (Scope 1)
t CO2-eq
1 803.5
1 916.5
+ 6.27%*
+ 113.1*
Indirect (Scope 2)
t CO2-eq
243.0
462.8
+ 90.41%**
+ 219.7**
Indirect (Scope 3)
t CO2-eq
-
-
-
-
GHG emissions
Note: Calculated using the market-based method, based on actual electricity purchases. Calculated using
the location-based method, i.e. based on a country's specific energy production pattern, 2023. The
company's indirect Scope 2 GHG emissions would be 702,1 t CO2 eq., 850.1 t CO2 eq. in 2022.
* Compared to 2022, direct (Scope 1) emissions have increased due to higher fuel consumption in the
transport fleet.
** Compared to 2022, indirect (Scope 2) emissions have increased because part of the electricity in Hustal
UAB was purchased without guarantees of origin (it cannot be classified as green energy), and heating
costs in PST construction sites have increased ~53%.
The GHG emission intensity is calculated by dividing annual emissions by the
number of units of economic activity. PST calculates how much CO2 is emitted per
employee and per million Eur in this case. As with the total emissions calculation,
the intensity ratios include all GHG emissions, converting them into CO2-eq.
2022
2023
Change
2022/2023
t CO2-eq / 1 employee
2.9
3.7
+ 28%
t CO2-eq / €1 million turnover
20.9
23.0
+ 10%
GHG emissions intensity
Note: The emission intensity ratio has been calculated for the total Scope 1 and Scope 2 GHG emissions.
18
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Energy consumption
Direct & indirect energy consumption
Measureme
nt units
2022
2023
Direct fuel consumption from
renewable sources
TJ
0.42
0.84
Biofuels
TJ
0.42
0.84
Direct fuel consumption from non-
renewable sources
TJ
24.05
25.67
Diesel
TJ
22.58
23.48
Petrol
TJ
1.47
2.19
Energy purchased and consumed
TJ
21.21
17.78
Electricity
TJ
12.45
7.18
Heat
TJ
9.06
10.60
Total energy consumption in the
organisation:
TJ
45.98
44.29
Energy intensity
2022
2023
TJ / 1 million Eur revenue
0.47
0.43
TJ / 1 employee
0.066
0.068
Note: Total energy consumption is calculated using the GRI 302-1 formula. Conversion factors from
convert-measurement-units.com convert energy quantities to TJ.
Energy intensity
The energy intensity index is calculated using the GRI 302 Energy methodology.
GRI 302-3
PST purchased a new Komatsu bulldozer to replace the
previous one manufactured in 2007. The new bulldozer
has a new generation Euro 6 engine (the old bulldozer
had Euro 3 one). In terms of hours actually worked in
2023 and the average fuel consumption per hour for this
model, the new bulldozer consumes half as much fuel
per working hour. During 2023, It emitted approximately
17.5 tonnes less CO2 than the old bulldozer would.
Work and Achievements in 2023
PST has increased the capacity of its solar power plant
(Puzino g. 1, Panevezys) from 30 kW to 60 kW.
Hustal UAB has increased the capacity of its solar power
plant from 200 kW to 320 kW.
Development of solar energy projects: investments in
new solar power plants or the expansion of existing ones
to increase renewable energy production and reduce
dependence on non-renewable sources.
Plans for 2024
Initiation of projects to reduce electricity consumption
by applying energy efficiency improvement measures
and promoting responsible energy use.
GRI 305-1
GRI 305-2 GRI 305-3 GRI 305-4GRI 302-1
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Measurement
units
2021
2022
2023
General waste
t
12,531.279
3684.020
2772.483
Hazardous waste
t
2.923
4.759
11.107
Total
t
12534.203
3688.779
2783.59
Measurement
units
2021
2022
2023
Wood
t
68.890
98.670
72.86
Metals
t
20.010
5.118
277.585
Paper
t
7.770
7.365
19.755
Glass
t
13.940
2.040
0.14
Plastics
t
0.040
0.065
8.807
Concrete brick
mixes
t
3099.940
1042.500
1088.1
Bituminous
mixtures
t
1200.000
416.400
0.65
Total
t
4410.59
3590.109
1467.897
WASTE REDUCTION AND
RESOURCE MANAGEMENT
The Group aims to ensure the responsible management of all waste associated
with its operations, continuously increase recycling and ensure responsible
resource management. To conserve the environment and natural resources and to
provide comprehensive pollution prevention, the Company has a practice of
preparing an environmental plan at the beginning of each project. The plan
foresees specific measures to manage significant environmental aspects and the
Company’s activities. This is to minimise the Group's footprint in this area. The
Company's approach to waste reduction is defined explicitly in the PST
Environmental Policy.
To successfully manage this topic, the Company has implemented an
Environmental Management System according to the standard LST EN ISO
14001:2015. Waste reduction targets, describing the proportion of waste sorted to
be achieved, are set each year.
Objectives for 2024:
GRI 306-3 GRI 306-4
Ensure the following minimal proportion of waste sorting on sites:
To keep construction machinery, equipment and
vehicles up-to-date, subject to financial constraints.
PST sorts the generated construction waste on-site. Building materials suitable for
reuse are separated. Waste that is not suitable for reuse is sent to waste handlers.
Waste generated on construction sites is also sorted according to all applicable
requirements.
Internal audits monitor and control the waste sorting process. Records of
generated waste are kept in the electronic Unified Product, Packaging, and Waste
Record Keeping Information System (GPAIS). At the end of the calendar year, the
proportion of waste sorted is calculated.
Waste from operations
PST strives to reduce the Group's negative environmental impact by adequately
managing all waste generated from its operations. The Company supports and
endorses the European Union's (EU) waste policy, which is based on the waste
hierarchy principle of waste management—waste prevention in the first line,
followed by preparation for reuse and only afterwards recycling and recovering.
Waste sent for recycling
Note: All hazardous waste generated by the activity has been passed on to waste handlers.
Note: All of this waste has been sent for recycling; however, PST cannot guarantee that it has actually
been recycled.
new construction – 60 %;
reconstruction, modernisation and renovation of
buildings – 30 %;
environmental management, road construction, site
development and waste sites – 85%;
otherwise unspecified waste sites – 45 %.
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Measurement units
2021
2022
2023
Water consumption
of PST fixed facilities
ML (megaliters)
3.211
4.312
5.233
Water consumption
of PST construction
sites
ML (megaliters)
1.365
12.102
8.822
TOTAL:
ML (megaliters)
4.576
16.414
14.055
WATER CONSERVATION AND
POLLUTION REDUCTION
The company considers water conservation and reducing water pollution as one
of its key objectives and aims to reduce its impact on this topic in every possible
way. The approach to this topic is further described in the Company's
(Environmental Policy.)
Amount of water consumed
GRI 303-5
PST does not use water from areas experiencing water stress, while all
calculations are based on metering devices installed within the Company.
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Social Responsibility and Sustainability Report 2023
ENVIRONMENTAL IMPACT OF
BUILDINGS AND SERVICES
The Company sees this topic as one of the most important for managing its impact
on the environment, employees, and society. Therefore, the aim is to apply and
develop new solutions and services to help reduce the environmental impact of
buildings throughout their life cycle. The circular economy is about preserving the
value of products and materials for as long as possible, with as little waste as
possible and as few resources used as possible; the Company aims to do the
same by trying to minimise its impact in this area.
It is important to note that in terms of volume, construction and demolition are
among the largest sources of waste. The construction industry significantly
impacts the overall environmental performance of the life cycle of buildings and
infrastructure. Given the long lifespan of buildings, the Company strives to
promote better design in every possible way to reduce the impact on the
environment and to increase the resilience and recyclability of their components.
At the same time, the use of hazardous chemicals in construction sites is being
steadily reduced by replacing them with less hazardous ones.
The Company's new buildings currently under construction are of energy
efficiency class A++. These buildings use almost no thermal energy, contributing to
climate change mitigation. As the market tightens its requirements for the energy
class of new projects, PST is developing its competencies and technological base
to implement this type of project.
In 2023, the Lazdynai swimming pool was recognised as
the Product of the Year at the Lithuanian Confederation
of Industrialists (LPK) awards, receiving the "Lithuanian
Product of the Year 2023" gold medal.
In 2024, priority will be given to acquiring and installing
equipment and machinery, allowing to reduce the
environmental impact of operations and fuel
consumption.
Work and Achievements in 2023
Plans for 2024
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SOCIAL
AREA
Number of employees
Permanent employees by
gender (indefinite contract)
Temporary employees by
gender (fixed-term contract)
Full-time employees by
gender
Part-time employees gender
PST
Group
PST
Group
PST
Group
PST
Group
PST
Group
Total
491
762
451
721
40
41
471
735
20
28
Women
80
108
76
103
2
3
79
156
6
12
Men
411
618
375
38
38
578
392
578
14
16
Lithuania
490
756
450
716
40
41
470
729
20
27
Latvia
1
3
1
3
0
0
1
3
0
1
Poland
0
3
0
2
0
0
0
2
0
0
EMPLOYEES AND THEIR
DIVERSITY
Professional, competent and responsible employees are the Group's greatest
asset and essential to achieving its goals. The Group aims to ensure a respectful
and caring relationship with its employees, increase diversity, and foster
employees’ well-being and internal corporate culture.
On 6 August 2021, a Labour Council of nine members was elected to represent
employees in the Group. The Labour Council makes proposals to employer on
economic, social, and labour issues of concern to employees, as well as employer
decisions and laws and regulations governing labour relations. The Council is set
up for a term of office of 3 years, starting from the beginning of its mandate.
As of 31 December 2023, the Group had a total of 762 employees, and PST had 491
employees. As of 31 December 2022, the Group had a total of 805 employees, and
PST had 536 employees.
Breakdown of employees by gender and location
Note: The tables present the Group's data at the end of the reporting period (2023). Data for 2022 is available for comparison in the PST Social Responsibility and Sustainability Report for 2022.
There has been a natural turnover of employees in the Group's companies during
2023. The Group does not have information on the total number of employees
(e.g., subcontractors' employees) who are not employees of the Group and whose
work and/or workplace is not controlled by the Group.
GRI 2-7 GRI 2-8
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New hires
Turnover
Total
number in
each
category
Number of
new hires
Rate per
category
(%)*
Number of
redundancies
Rate per
category
(%)*
By gender:
Women
108
10
9.3%
4
3.7%
Men
654
225
34.4%
71
10.9%
By age:
Up to 30
years
67
61
91.0%
20
29.9%
30–50
years
389
131
33.7%
38
9.8%
Over 50
years
306
43
14.1%
17
5.6%
By location:
Lithuania
756
212
28.00%
43
5.7%
Latvia
3
0
0.00%
0
0.00%
Poland
3
1
33.3%
0
0.00%
Employees and their diversity
Breakdown by
gender
Total number of employees entitled to parental leave (by
gender).
Men – 7
Women – 1
Total number of employees on parental leave (by
gender).
Men – 0
Women – 1
Total number of employees who returned to work after
parental leave during the reporting period (by gender).
Men – 0
Women – 3
The total number of employees who returned to work
after parental leave and are still working 12 months after
their return (by gender).
Men – 0
Women – 1
*The rate is calculated as follows: the number of new hires in a given category divided by the
total number of employees in that category. For example, the number of new female hires
among all female employees.
Parental leave
Note: The relative rate of return to work of workers on parental leave by the GRI formula is not reported, as
this is the first time the indicator has been reported, and the data are only disclosed for 2023.
GRI 401-1 GRI 401-3
New hires and turnover
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Social Responsibility and Sustainability Report 2023
Gender and age group
2022
2023
Share (%)
The board
Women
40
40
Men
60
60
Up to 30 years
0
0
30–50 years
60
40
Over 50 years
40
60
Gender and age group
Share (%)
2021
2022
2023
PST
Women
15
17
16
Men
85
83
84
Up to 30 years
7
8
8
30–50 years
42
43
48
Over 50 years
51
49
44
Group
Women
19
15
14
Men
81
85
86
Up to 30 years
8
9
9
30–50 years
47
47
51
Over 50 years
45
44
40
Percentage of employees in each of these diversity categories
DIVERSITY, EQUALITY AND
INCLUSION
The Group has placed a strong emphasis on diversity, equality and inclusion in
2023. By creating a work environment based on diversity, equality and inclusion,
the Group ensures that the views of different stakeholders are taken into account
and that the expectations of these stakeholders towards the Group are better
reflected.
In 2023, as in the past, the majority of the Group's employees, 86% (PST – 84%),
were men, which is typical for the construction sector. This is strongly influenced
by the specific nature of the activities carried out, i.e. women are less likely to opt
for technological work in construction and directly related construction-technical-
engineering occupations and outdoor work.
The Group does not discriminate based on gender, assesses employees based on
their qualifications, and provides equal employment and career opportunities.
Every employee's opinions and ideas are accepted. There were no cases of
discrimination in 2023.
Social Responsibility and Sustainability Report 2023
GRI 406-1 GRI 405-1
The group is against forced, involuntary labour and child exploitation. Only persons
of the legal age by the law of the Republic of Lithuania may be recruited.
Percentage of individuals in each of these diversity categories on the Group's
board
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PST
Group
2021
2022
2023
2021
2022
2023
The ratio of the annual total
compensation for the
organisation’s highest-paid
individual to the median annual
total compensation for all
employees
6.33:1
5.5:1
4.7:1
6:1
7.87:1
7.5:1
The ratio of the percentage
increase in annual total
compensation for the
organisation’s highest-paid
individual to the median
percentage increase in total
yearly compensation for all
employees
-
0.24:1
0.29:1
-
2:1
0.73:1
REMUNERATION POLICY
To attract professionals to management positions, the Group aims to maintain
remuneration close to the market median of the country where the Group
operates. The remuneration system is a set of remuneration packages that Group
companies use to attract, motivate and retain the best people to help them
achieve their long-term goals and business strategy. Staff remuneration is based
on the employee's responsibilities, performance, competencies, knowledge and
skills; the pay for equivalent posts is similar.
Employees benefit from advanced bonus schemes and an exceptional working
environment. The Group also provides social security benefits for employees, such
as death benefits for family members or relatives (in the event of an employee's
loss) and gifts at the birth of a child and on the occasion of an anniversary.
For more information on the remuneration policy, please refer to the "Consolidated
Remuneration Report" section of the Annual Report.
GRI 2-19 GRI 2-20
DETERMINING THE REMUNERATION FOR THE BOARD
MEMBERS
The extraordinary general meeting of shareholders of 9 April 2021 approved the
procedure for the appointment and payment of remuneration to independent
members of the board of Panevezio statybos trestas AB.
Under these arrangements, the independent member of the board is paid a fixed
monthly remuneration. The board members, other than the independent members
of the board, are paid remuneration (bonuses) for their work on the board, as
decided by the general meeting of shareholders, by the Law on Companies of the
Republic of Lithuania.
DETERMINING THE REMUNERATION OF TOP AND MIDDLE
MANAGERS
The remuneration policy for top and middle managers of Panevezio statybos
trestas AB was approved at the ordinary general meeting of shareholders on 29
April 2020.
The board approves the remuneration of the Company's chief executive officer
(general director) and the remuneration of functional and branch directors on the
general director's recommendation. The Company currently has no information on
how stakeholders' views (including shareholders) are considered in determining
remuneration or the involvement of consultants in the remuneration setting.
Remuneration for top and middle managers consists of fixed and variable
components. The fixed component is the employee's basic monthly salary, as set
out in the employment contract. The variable component is based on the
Company's and the employee's performance.
The remuneration policy for board members and the management team is not
linked to sustainability performance.
The consolidated remuneration report for 2022 and the set of financial statements
2022 were approved at the general meeting of shareholders on 27 April 2023.
Annual total compensation ratio
The annual increase in total remuneration for the highest-paid individual at PST
was 8%. The annual percentage increase in the median total compensation of all
employees (excluding the highest-paid individual) was 26%.
At the group level, the highest-paid individual had an annual compensation
increase of 18%. The annual percentage increase in the median total remuneration
of all employees (excluding the highest-paid individual) was 24%.
GRI 2-21
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Social Responsibility and Sustainability Report 2023
EMPLOYEE SAFETY AND
WELLBEING
The Group is committed to ensuring a safe working environment for its employees,
so safety is considered one of the highest priorities.
One of the Group's main objectives is to become a leader in the construction
market, guaranteeing safe and hazard-free workplaces for Panevėžio statybos
trestas AB employees and all the employees working on behalf of the Company.
The Group has an Occupational Health and Safety (OHS) Policy and relevant ISO
45001 procedures in place:
Implementation of legal and other requirements for environmental protection
and occupational safety and health (ADSSVP-02).
Emergency preparedness and response (ADSSVP-04).
Monitoring and measurement (ADSSVP-06).
Occupational safety and health management (OSHMP-09).
Identification and risk assessment of occupational hazards (DSSAP-10).
Managing objectives, targets and management programs (KADSSVP-002).
Design Management (KADSSVP-003).
Purchase and sale (KADSSVP-004).
Selection of subcontractors (KADSSVP-005).
This helps to ensure the ongoing identification and assessment of OHS risks,
defining risk management measures, and monitoring their implementation.
GRI 403-1
WORK-RELATED RISKS
Sound occupational health and safety management contributes significantly to the
Group's sustainable and long-term performance. In the construction sector, the
risk of injury and occupational diseases is high where there are high physical loads
or where hazardous work, chemicals, or other materials are involved.
Hazardous and harmful risk factors (hazards) identified:
Noise – noise from mobile electrical work equipment on a construction site.
Hand vibration – when working with portable electrical equipment on a
construction site.
Low and high temperatures (working outdoors, indoors (cold and warm
seasons)).
Inadequate lighting – artificial lighting (when work is carried out outdoors, in
open spaces during the dark daytime, or in basements).
Contact with hazardous chemicals: petroleum products (fuels, lubricants, etc.),
acids, alkalis in mixtures and other hazardous substances, soil, paints,
adhesives, and sealants.
The physical exertion of lifting and carrying loads by hand involving the arms,
legs and back muscles.
Falls from height – scaffolding; mobile towers, ladders; mobile work platforms;
workplaces at a height not protected by safety fencing.
Falling at the same level (horizontal), risk of slipping, tripping, stumbling.
Falling objects – lifting loads with cranes; workplaces at heights not protected
by safety fencing; hazardous areas near buildings; lifting equipment.
Risk of tripping, pinching – erecting and dismantling heavy structures using
lifting equipment.
There is a risk of being run over, pinched, or crushed by moving vehicles
during delivery of building materials, waste removal, or landscaping.
Risk of entrapment and crushing of rotating parts of machinery and equipment.
Risk of cuts and dents when using sharp tools or materials with sharp edges or
corners.
Exposure to electrical currents (alternating current over 50 V and direct current
over 75 V, high voltages of 10 kV and above).
Fragmented, flying particles of work materials – hazardous areas on a
construction site when working with portable electrical work equipment.
Fire hazards include welding, metal cutting with power tools causing sparks,
and the use of electrical household appliances.
Potential displacement and collapse of stored building materials and
structures – storage of building materials and heavy structures.
Hazards in the work and services provided by other organisations and their
employees.
Dust risk – excavation and construction work during the warm season.
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
2022
2023
Injury rate
0
2
Number of minor accidents (injuries) per
million hours worked
0
1.31
Work and Achievements in 2023
Plans for 2024
GRI 403-9
Work-related injuries
Note: The total recordable injury rate per million hours worked is calculated using the GRI 403-9 formula.
The total number of hours worked by all employees in 2023 was 11,269,833.
We introduced an e-learning platform for qualification
and occupational safety and health training to improve
the quality and accessibility of training for every
employee.
The process for issuing personal protective equipment
has been digitised. From 1 March 2023, employees will be
issued personal protective equipment via the VIACOREX
electronic platform.
OCCUPATIONAL HEALTH AND SAFETY TRAINING SYSTEM
The company provides occupational health and safety training to ensure every
employer is informed and prepared to perform their duties safely. The training
program comprises several parts:
Theoretical training covering the basics of health and safety
at work, legislation, Company policies and procedures. It also
focuses on hazard identification and the principles of safe
behaviour, including using personal protective equipment
and accident prevention.
Practical training on specific hazards and activities, such as
fire safety, civil protection, use of chemicals and high-risk
work. It also includes evacuation plan training and first aid
principles.
Periodic knowledge checks and practical training to refresh
and test workers' knowledge and skills in actual or simulated
situations.
The Company's managers and safety officers are responsible for ensuring the
quality of the training and keeping the programs up-to-date with the latest hazards
and legal requirements. This is the Company's way of creating a safe working
environment and ensuring every employee is well-prepared for different situations.
On 16-03-2023, Technical Director K. Grimalis, OHS Senior
Specialist V. Fijalkauskas and Construction Manager K.
Kurpis participated in PETROFAC's “2023 Contractors
Safety Forum Lithuania”, where Lithuanian and foreign
companies shared their experience of creating a safe
environment.
The digitalisation of compulsory health screening for
workers through the electronic platform Esveikata. It has
been launched to improve the quality of health
screening and the accessibility of information for every
employee.
The overarching goal of the Vision Zero for Accidents at
Work 2024 is 0 accidents at work.
The implementation of the e-platform for OSH
management, "SAUGA.lt," should be completed in Q1
2024. OSH and competencies/professional training will
be delivered using the e-platform.
Improve staff and manager awareness of OSH and risk
assessment through better training programs and
presentation of information.
GRI 403-5
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
One of the main objectives of the Group's strategy is to promote the training and
development of employees at all levels. Employee development and improving
specific and general skills ensure the proper and smooth running of the Group's
businesses and operational processes. They are among the most critical factors in
ensuring competitiveness.
Employee development plans are drawn up annually, taking into account the
Group's objectives and the competencies required to achieve them. The Group
provides opportunities for employees to improve their knowledge and skills
through various training courses, seminars and conferences. The Company and its
subsidiaries provide regular in-house training for employees based on the nature
of the work and the workplace requirements.
The Group focuses mainly on Occupational Health and Safety (OHS) training,
which is included and described in the Group's Occupational Health and Safety
Policy. To ensure a smooth process on this topic, the Group has also implemented
the ISO 45001 procedure Personnel Training (KADSSVP-016) and the training
procedures are defined in the Group's procedure for training, testing and
assessment of the Group's employees' knowledge in the field of occupational
safety and health.
The Company and its subsidiaries are responsible for developing the qualifications
and skills of their employees, which means investing time and money in organising
and implementing the necessary training and education programs.
The Group's training is delivered in two tracks, using the services of
1. Training providers (external training).
2. Higher education institutions (employee studies).
The Group continuously invests in training and development courses to improve
its employees' competencies and awareness of occupational safety and health. In
2023, training courses were organised at the Company and training institutions.
The training sessions attended by employees are listed in the table below.
4712
The Group dedicated a total of hours to various external
and internal trainings”, pagal nutartą dizaino kryptį.
EMPLOYEE TRAINING
AND EDUCATION
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
Average hours of training per year per employee
2022
2023
2022
2023
2022
2023
Number of
specialists
Number of hours
Average hours of
training per
employee
Women
6
19
130
170
21.67
8.95
Men
143
272
2791
4542
19.52
16.70
Sales and negotiations
2
3
8
16
4.00
5.33
Workman employed in
the construction of
high-rises
40
23
916
148
22.90
6.43
Cargo hanger
0
21
0
277
13.19
Fire safety (employee)
48
59
161
176
3.35
2.98
Fire safety (manager)
6
3
41
17
6.83
5.67
Civil protection
9
22
1
40
0.11
1.82
Violence and
harassment: risks,
prevention measures,
employees' rights and
obligations
9
22
1
40
0.11
1.82
Lifting platform and
equipment operator
0
41
0
1274
31.07
The organisation of
crane work
0
1
0
3
3.00
Tower crane operator
0
1
0
32
32.00
Mobile work platforms
work manager
0
1
0
16
16.00
Coordinator for
construction safety
and health at work
0
3
0
96
32.00
First aid training
9
53
1
143
0.11
2.70
OHS professionals
9
14
652
1072
72.44
76.57
2022
2023
2022
2023
2022
2023
Number of
specialists
Number of hours
Average hours of
training per
employee
Improving
occupational health
and safety
0
3
0
64
21.33
Persons authorised by
the employer*
5
5
170
170
34.00
34.00
Energy workers
(heating)
8
0
234
0
29.25
Training of certified
construction
professionals for the
certificate of
competence
4
3
32
48
8.00
16.00
Training for the
renewal of the
certificate of
competence for
certified construction
professionals
17
29
404
704
23.76
24.28
Training of certified
construction
professionals to
supplement the
certificate of
qualification for work in
the territory of a
cultural heritage
object, its protection
zone, a cultural
heritage site
10
13
160
259
16.00
19.92
Certification training for
responsible structural
welders
4
3
128
96
32.00
32.00
GRI 2-4 GRI 404-1
* Employer's authorised person – the head of the
structural unit to which the head of the company has
delegated the implementation of OHS prevention
measures (head of a department, office, bureau or
other units)
Note: The table for 2023 has been updated with data
for 2022, as the information disclosed in last year's
report was incomplete.
243
employees
and managers
trained
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
The Group consistently strives to foster an internal culture of sustainability. There
is a strong focus on encouraging employees, creating a supportive environment
for developing and implementing new ideas, and constant information sharing.
The Group aims to ensure that employees feel comfortable in their workplace, can
build their skills and knowledge, and are free to create and implement
sustainability-related ideas.
The Group's key principles for a sustainable culture:
Accountability (for impacts on society, economy, environment).
Transparency (decisions and activities affecting society and the environment).
Ethical (decent) conduct.
Respecting (listening and responding to) stakeholders' interests.
Respect for the rule of law.
Compliance with international standards of conduct.
Respect for human rights.
A well-established sustainability culture helps the Company manage its negative
environmental impacts, ensure a sustainable construction process and contribute
to a sustainable society.
To create and foster an internal culture of sustainability, the Group has developed
additional related documents to communicate the Group's position on various
sustainability issues to its employees. The following documents are available to all
employees:
Supplier code of conduct
Environmental policy
BUILDING AN INTERNAL
CULTURE OF SUSTAINABILITY
Practical first aid training for all employees from
Panevėžys and Vilnius who expressed their wish to
participate. During the training, they learned or refreshed
their knowledge on how to deal with life-threatening
situations so that they could help colleagues, relatives, or
other close people if needed.
Expanding the fleet and capacity of existing solar power
plants at Hustal UAB.
Hustal UAB colleagues have taken concrete action on the
environment by producing two Environmental Product
Declarations (EPD). In the main product declaration, one of
the key indicators—the product's Global Warming
Potential (GWP)—was reduced from 2.83 to 1.47
kgCO2/kg, while the box joist declaration achieved an
extremely low GWP of 0.877 kgCO2/kg. This means that
Hustal UAB products now have a lower carbon footprint
and are greener.
2023 achievements:
In May, employees repeatedly participated in the Steps
Challenge initiative, which saw more than 22 million
steps taken.
In 2023, the following initiatives have been implemented within the
Group to promote a culture of sustainability:
PST's subsidiary Skydmedis produces green energy and
fully supplies its needs. Neither electricity nor heating
fuel is bought from outside.
PST purchases and focuses only on green energy
purchases at the company level.
ncreasingly, the Company is using Ecocrete, a low-CO2
formula concrete with the same standard and early
strength characteristics as conventional concrete but a
significant reduction in CO2 emissions, in a wide range of
projects (especially wind farms). The company aims to
keep using more environmentally friendly concrete and
other technologies that help use resources more
efficiently and reduce environmental pollution.
The company gives a second thought and responsibly
gives sustainable gifts to its customers or partners on
special occasions. For example, on the occasion of the
completion of the Lazdynai swimming pool, an oak tree
with a commemorative plaque was planted on the site;
partners OP Bank were also presented with a tree near
their office on the anniversary of their establishment in
Lithuania.
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
Positive impact on communities is one of the Group's key focus areas. The Group
believes that corporate social responsibility - effective only when integrated into
daily work and managed like any other business activity - leads to a sustainable
and responsible economy.
The Group's constant and continuous improvement in business and project
management, quality, customer satisfaction, supply and subcontractors' chain
management, environmental protection and public relations is not only a matter of
being open to the surrounding community but also of acting ethically, honestly
and transparently towards the market, the environment, society and employees.
The Group's businesses are guided by the highest standards of business ethics
and social ethics. Social responsibility activities are based on the Group's values
and define the Group's approach to its activities, the incorporation of social,
environmental and transparency principles into the Company's and the Group's
internal processes, and its relations with its customers.
The construction sector has a significant environmental and ecological footprint. It
depletes natural resources, uses a wide range of machinery (trucks, tractors, etc.),
and pollutes building materials. Without managing the risks associated with such
activities, the impact on the environment and communities can be significant.
To successfully manage this topic, the Group is implementing local community
involvement, impact assessment and the following development programs:
A life cycle perspective is considered when determining the environmental
aspects of projects. The following key stages of the product/service life cycle
are assessed in the process: procurement of raw materials, design,
manufacture of construction products, transport, construction of the building,
use of the building, demolition at the end of the cycle and final disposal.
The Group monitors and measures environmental, social and governance
indicators such as waste, hazardous chemicals used, incidents of ground
contamination by petroleum products, stormwater pollution, internal
combustion engine emissions, particulate air pollution, noise, indoor dust,
street dirt/dust, electricity, water and fuel consumption, etc.
The Group and its companies report the results of the measurements to the
regulatory authorities.
POSITIVE IMPACT ON LOCAL
COMMUNITIES
GRI 413-1
SUPPORTING LOCAL COMMUNITIES
In 2023, the Group continued to pursue its goal of being a reliable and socially
responsible company by investing its financial and human resources in a wide
range of complementary activities and by supporting social, sporting, cultural and
health promotion projects. In 2023, the Group has supported over ten various
organisations. We aim to support the education community, engage with students
and strengthen their interest in the construction sector.
Work and Achievements in 2023
We have contributed to supporting and growing the Lithuanian
scientific community:
We have awarded a scholarship to the author of the
best scientific dissertation of 2022 in the framework
of the "Best Dissertation of 2022" election initiated by
the Lithuanian Society of Young Researchers (LJMS).
In cooperation with Kaunas University of Technology
(KTU) Panevezys Faculty of Technology and
Business, we have established a scholarship for the
best study and scientific achievements for the
student of the master's degree study program
"Integrated Design and Construction Management".
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SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
Social Responsibility and Sustainability Report 2023
Social Responsibility and Sustainability Report 2023
The Group aims to provide a working environment based on respect for
fundamental human rights and human values. The importance of ensuring human
rights is defined in PST Code of conduct for employees, suppliers and company
representatives. PST expects the employees, suppliers and representatives in all
branches of the Company to prohibit all forms of discrimination and harassment.
During 2023, the Group identified no human rights risks or violations.
The Company and the Group respect the principles of human rights protection, do
not tolerate any violation of human rights, advocate a fair and transparent
remuneration policy, comply with the laws on overtime and working time, respect
the right of workers to rest and do not tolerate any form of harassment and
violence.
The Company opposes discrimination and forced labour of any kind. Employees
have equal rights and opportunities regardless of gender, nationality, social or
marital status, social or political organisation membership, or personal
characteristics. In 2023, the Company and the Group did not record any cases of
human rights violations or related complaints.
HUMAN
RIGHTS
34
SOCIAL AREASUSTAINABILITY IN THE GROUP ENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP GOVERNANCE AREA
GOVERNANCE
AREA
Business ethics is integral to PST and the Group's business activities. The Group
aims to create and foster an ethical business culture, prevent corruption and
bribery and compete fairly.
The PST Code of Conduct, accessible to all stakeholders, describes the Group's
position and broader approach to business ethics.
The Group has identified and is guided by the following principles:
BUSINESS
ETHICS
GRI 205-3
FIGHTING CORRUPTION AND BRIBERY
The Company and its subsidiaries do not tolerate corruption of any kind or its
manifestation. They are committed to open competition, ethical business
conditions and adequate transparency and openness in their operations. The
Group does not tolerate fraud, extortion, the creation of unofficial accounts, the
execution of unofficial and improperly documented transactions, the recording of
fictitious expenses, the use of false documents and other forms of corruption. The
anti-corruption provisions apply to all employees of the Group, members of the
management and supervisory bodies and third parties acting on behalf of the
Group.
Comprehensive internal control mechanisms to identify potential corruption risk
factors mitigate the risk. The Company and the Group's companies continuously
monitor and improve their business processes.
The Company and its subsidiaries refrain from any form of influence with
politicians and do not contribute to the election campaigns of political parties, their
representatives or candidates. The Group always cooperates with the authorities
and is ready to provide all the necessary information.
The Company and its subsidiaries shall ensure that all its procurement is carried
out in a manner that rationally uses resources based on the principles of equality,
non-discrimination, transparency, mutual recognition, proportionality,
confidentiality, and impartiality. Suppliers shall be selected based on the most
economically advantageous tender or the lowest price, based on equal and non-
discriminatory treatment between suppliers.
The group assesses subcontractor qualifications as part of the subcontractor
selection process. Subcontractors must ensure compliance with environmental
and occupational health and safety legislation and their integrity.
There were no significant cases of non-compliance during 2023. There were also
no fines for non-compliance with laws and regulations. The Group complies with
the law as defined by government regulations.
No cases of corruption were reported in 2023.
GRI 2-27
Accountability (for impacts on society, economy, and
environment)
Transparency (of decisions and activities that affect
society and the environment)
Ethical (decent) conduct
Respecting (listening and responding to) stakeholders'
interests
Respect for the rule of law
Compliance with international standards of conduct
Respect for human rights
36
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
GRI 205-2
COMMUNICATION AND TRAINING ON
ANTI-CORRUPTION POLICIES AND
PROCEDURES
The description of the procedure for reporting and handling irregularities has been
uploaded on the PST website and is available to all management bodies. It was
also emailed to the board members and the general director. All employees (100%)
are informed about the organisation's anti-corruption policies and procedures.
A description of the procedure for reporting and handling infringements is
available to business partners on the PST website. The awareness percentage is
not calculated.
In 2023, no anti-corruption training was provided for governing body members or
employees. The procedure is explicitly explained in the description mentioned
above. It is communicated to employees upon signed acknowledgement.
37
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
Location
Share of products and services purchased by country (%)
2022
2023
Lithuania
94.4
88.87
Poland
2.7
3.2
Latvia
1.5
7.64
Germany
1.3
0.28
Sustainability in the supply chain is managed by selecting suppliers based on their
practices and their impact on the environment, human rights and communities. By
contributing to sustainability initiatives in the supply chain, the Group can provide
an impetus for suppliers and building product manufacturers to join together and
make their operations more sustainable.
A sale/purchase procedure is foreseen to ensure a proper process for this topic. In
addition, the management of this topic is defined in the Quality and Environmental
policies.
Share of the procurement budget by location of operation
SUSTAINABILITY IN
THE SUPPLY CHAIN
GRI 204-1 GRI 308-1
Note: The Group's geographical definition of ‘local’ is Lithuania. Construction sites define the ‘significant
locations of operation’.
So far, new suppliers have not been evaluated on environmental and social
criteria. In the future, it is envisaged that suppliers will be evaluated based on
sustainability criteria and that suppliers that meet these criteria will be given
preference.
2023 achievements:
The procurement management system was
digitised in 2022, and procurement was
launched on the e-procurement platform
Viacorex. In 2023, 90% of purchases were
made through this system.
Purchase/sales contracts have been
transferred to the program Doclogix, which
allows a significant reduction in paper and ink
consumption. So, in 2023, paper annexes to
generic contracts were abandoned in favour
of e-orders. Up to 80% of purchases are made
this way.
GRI 414-1
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SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
The Company and its subsidiaries continuously focus on improving operational
management efficiency, improving the quality of construction works, and
introducing modern technologies. The Group seeks ways to improve efficiency,
innovative and resource-efficient process management, working conditions,
construction work and service quality. So, in 2023, the company started optimising
its core business – project management processes. The aim will be to purify and
digitise the processes.
The Company and its subsidiaries aim to reduce the energy used in their
operations by optimising production processes. The Group is investing in
technologies that produce and use green energy.
The Group adopts and uses advanced processes and technologies to maintain
excellence in the construction sector. In cooperation with its partners, the Group
seeks to expand the use of Building Information Modeling (BIM) principles in
project management activities.
The Group uses modern design software to prepare building projects. It also
actively monitors and continuously adds relevant applications to the software.
INNOVATION AND
OPERATIONAL EFFICIENCY
Plans for 2024
In 2024, the company will focus on digitising processes
(project management, HR management, data analysis).
It will also aim to acquire and install equipment and
machinery to increase productivity, improve accuracy
and reduce the environmental impact of the activities
and fuel consumption.
39
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
Quality of services and buildings is one of the Group's key strategic topics. The
Company and its subsidiaries are committed to ensuring that the projects they
deliver are of high quality, meet the needs of their clients and comply with industry
standards.
To meet its customers' needs and expectations, the Group endeavours to
understand not only the customer's current needs but also its forecasted needs by
identifying the key characteristics of its products/services, assessing its position in
the marketplace, identifying market opportunities and weaknesses, and predicting
its future competitive advantage.
The Group is guided by a quality management system that has been developed,
documented, implemented and continuously monitored to ensure the smooth
implementation of this topic. The Group is committed to continuously improving
the performance of its quality management system to the requirements of LST EN
ISO 9001:2015. Specific processes have been identified, their sequence and
interactions defined, and criteria and methods identified for effective process
management.
The Company and its businesses have established quality objectives and
requirements for products or services in their product and service marketing
planning. The requirements are detailed in the Group's Quality Policy. Quality
objectives and requirements are reviewed yearly.
The management systems implemented in the Company and its subsidiaries are
certified by an independent surveillance audit carried out by auditors from the
certification firm Bureau Veritas. The management team analyses the results of
internal and external audits and makes decisions to improve the management
system.
QUALITY OF SERVICES
AND BUILDINGS
Work and Achievements in 2023
2023 Einpix was launched to streamline
communication and task sharing with collaborators,
suppliers, subcontractors, and customers to manage
warranty tasks. It has enabled simplified task and
defect management, efficient handling of urgent
problems, real-time supervision of staff tasks, and
monitoring of the client's reaction to the work
performed.
Plans for 2024
Integrate quality issues into the project management
IT system that is being implemented.
40
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
Risk management is part of strategic management and is integral to the Group's
operations. The Group's primary objective in managing risks is to identify and
optimally manage the higher and more significant risks. The Group aims to
continuously assess its operational risks and implement measures to address and
mitigate them.
PST and the Group companies are exposed to a variety of risks in the course of
their business:
Legal regulation
High levels of competition
Shortage of qualified labour force
Economic cyclicality
Consistency of order intake
Volatile material prices on the global market
Rising material prices
Macroeconomic factors
Dumping
Only some of them may significantly impact the Group's and the Company's
performance. The main factors that create business risks for the Company and the
Group are competition in the construction market and changes in demand for
construction services.
Demand for construction services is also strongly influenced by the volume of
investment and the funding available from EU structural funds. Increases and
fluctuations in the prices of materials and services complicate the budgeting
process for ongoing projects and the ability to complete projects within planned
costs. This creates additional risks in fixed-price construction contracts and
reduces project profitability.
The Company's and the Group's operations are also affected by the economic
situation in Lithuania and the countries where the Group's companies operate
(economic cyclicality), geopolitical changes, Russia's military invasion of Ukraine,
and the remaining risks associated with COVID-19.
Uncertainties remain in global economic developments due to the anticipated
regional and global crisis.
RISK
MANAGEMENT
The section Governance Report of the Company’s and Consolidated Annual
Report provides more information on risks and their management.
Note 4 to the Separate Financial Statements and Note 4 to the Consolidated
Financial Statements provide information on the types of financial risks and risk
management. Legal uncertainties are disclosed in Note 28 to the Separate
Financial Statements and Note 27 to the Consolidated Financial Statements.
41
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
INDEX
GRI INDEX
Statement of use
Panevezio statybos trestas
AB has reported in
accordance with the GRI
Standards for the period
from 1 January to 31
December 2023.
GRI 1 used
GRI 1: Foundation 2021
Applicable GRI Sector Standards
Not applicable
GRI 2: General Disclosures 2021
GRI Standard
Page
1. The organisation and its reporting practices
2-1
Organisational details
4, 5 p.
2-2
Entities included in the organisation's
sustainability reporting
4, 5 p.
2-3
Reporting period, frequency and contact
point
4 p.
2-4
Restatements of information
4, 31 p.
2-5
External assurance
4 p.
2. Activities and workers
2-6
Activities, value chain and otherbusiness
relationships
5 p.
2-7
Employees
24 p.
2-8
Workers who are not employees
24 p.
GRI Standard
Page
3. Governance
2-9
Governance structure and composition
8 p.
2-10
Nomination and selection of the highest
governance body
8 p.
2-11
Chair of the highest governance body
8 p.
2-12
Role of the highest governance body in
overseeing the management of impacts
8 p.
2-13
Delegation of responsibility for managing
impacts
8 p.
2-14
Role of the highest governance body in
sustainability reporting
4 p.
2-15
Conflicts of interest
8 p.
2-16
Communication of critical concerns
8 p.
2-17
Collective knowledge of the highest
governance body
8 p.
2-18
Evaluation of the performance of the
highest governance body
To date, there has been no
specific process for assessing
the board's performance in
terms of sustainability. Such a
process would be foreseen
should the need arise.
2-19
Remuneration policy
27 p.
2-20
Process to determine remuneration
27 p.
2-21
Annual total compensation ratio
27 p.
4. Strategy, policies and practices
2-22
Statement on sustainable development
strategy
3 p.
2-23
Policy commitments
7 p.
2-24
Embedding policy commitments
7 p.
2-25
Processes to remediate negative
impacts
8 p.
2-26
Mechanisms for seeking advice and
raising concerns
8 p.
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SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
GRI Standard
Page
2-27
Compliance with laws and
regulations
36 p.
2-28
Membership associations
Panevezio statybos trestas AB is a
member of the Lithuanian
Construction Association,Association
of construction products testing
laboratories anda member of
Panevezys Chamber of Commerce,
Industry and Crafts.Metalo meistrai
UAB is a member of the Lithuanian
Welders Association,PST investicijos
UAB is a member of the Lithuanian
Real Estate Development Association.
5. Stakeholder engagement
2-29
Approach to stakeholder
engagement
9 p.
2-30
Collective bargaining agreements
The Company does not have a
collective agreement with its
employees.
GRI 3: Material topics 2021
3-1
Process to determine material
topics
9 p.
3-2
List of material topics
10 p.
3-3
Management of material topics
10 p.
Economic topics
GRI 204: Procurement practices 2016
204-1
Proportion of spending on local
suppliers
38 p.
GRI 205: Anti-corruption 2016
205-2
Communication and training on
anti-corruption policies and
procedures
37 p.
205-3
Confirmed incidents of corruption
and actions taken
36 p.
Environmental topics
GRI 302: Energy 2016
302-1
Energy consumption in the
organisation
19 p.
302-3
Energy intensity
19 p.
GRI Standard
Page
GRI 303: Water and Effluents 2018
303-5
Water consumption
21 p.
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG emissions
19 p.
305-2
Energy indirect (Scope 2) GHG emissions
19 p.
305-3
Direct (Scope 1) GHG emissions
19 p.
305-4
GHG emissions intensity
19 p.
GRI 306: Waste 2020
306-3
Waste generated
20 p.
306-4
Waste diverted from disposal
20 p.
GRI 308: Supplier Environmental Assessment 2016
308-1
New suppliers that were screened using
environmental criteria
38 p.
Social topics
GRI 401: Employment 2016
401-1
New employee hires and employee
turnover
25 p.
401-3
Parental leave
25 p.
GRI 402: Labor/Management Relations 2016
402-1
Minimum notice periods regarding
operational changes
Matches the deadlines set out
in the Labour Code
GRI 403: Occupational health and safety 2018
403-1
Occupational health and safety
management system
28 p.
403-5
Occupational health and safety
management system
29 p.
403-9
Work-related injuries
29 p.
GRI 404: Training and Education 2016
404-1
Average hours of training per year per
employee
31 p.
43
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023
GRI Standard
Page
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of governance bodies
and employees
26 p.
GRI 406: Non-discrimination 2016
406-1
Incidents of discrimination and
corrective actions taken
26 p.
GRI 413: Local Communities 2016
413-1
Activities related to local
community participation, impact
assessment and development
programs
33 p.
GRI 414: Supplier Social Assessment 2016
414-1
New suppliers that were
screened using social criteria
38 p.
44
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Social Responsibility and Sustainability Report 2023
Global Compact principle
Page
1
We support and respect the protection of internationally proclaimed human rights.
34 p.
2
We make sure that we are not complicit in human rights abuses.
34 p.
3
We uphold the freedom of association and the effective recognition of the right to collective bargaining.
34 p.
4
We do not use forced and compulsory labour and work to eliminate all forms of it.
34 p.
5
We do not exploit child labour and work to eliminate all forms of it.
34 p.
6
We do not discriminate and work to eliminate discrimination in respect of employment and occupation.
34 p.
7
We support a precautionary approach to environmental challenges.
7 p.
8
We undertake initiatives to promote greater environmental responsibility.
17 p.
9
We encourage the development and diffusion of environmentally friendly technologies.
17 p.
10
We do not tolerate corruption and work against corruption in all its forms, including extortion and bribery.
36 p.
UN GLOBAL COMPACT
PRINCIPLES
At the beginning of this century, the United Nations compiled and published the 10
universal principles Global Compact), Global Compact), inviting all organisations
seeking to operate responsibly and sustainably to adhere to voluntarily. We
support these principles in our work and promote their implementation in areas we
can impact. Below is a list of all the principles and the pages in this report that
describe our activities, ambitions and initiatives in relation to these principles.
45
SOCIAL AREASUSTAINABILITY IN THE GROUP GOVERNANCE AREAENVIRONMENTAL AREA INDEXCONTENT CEO LETTER ABOUT THE SUSTAINABILITY REPORT BRIEFLY ABOUT THE GROUP
Social Responsibility and Sustainability Report 2023