AB Lietuvos Geležinkeliai Mindaugo g. 12, Vilnius LT-03603, Lithuania Fax. +370 5 269 21 28 [email protected] www.litrail.lt ANNUAL REPORT 2014 ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 1

ANNUAL REPORT 2014 CONTENTS

6 19 REVIEW OF COMMERCIAL TECHNICAL DEVELOPMENT AND FINANCIAL AND INVESTMENT POLICY PERFORMANCE 13 22 FREIGHT SERVICES INFRASTRUCTURE 15 24 PASSENGER SERVICES ENVIRONMENTAL PROTECTION 17 ROLLING STOCK 25 TRAFFIC SAFETY 26 34 INFORMATION MANAGEMENT TECHNOLOGY STRUCTURE

27 35 INTERNATIONAL INDEPENDENT RELATIONS AUDITOR’S REPORT 30 36 HUMAN RESOURCES BALANCE SHEETS AND SOCIAL INITIATIVES 38 32 INCOME STATEMENTS MAJOR EVENTS IN 2014 4 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

The activities of AB Lietuvos Geležinkeliai have I would like to mention the following key The company maintains successful coo­pe­ a significant impact on the implementation of Lithua­nian railway development projects. ration with Klaipėda Seaport and stevedoring the strategic objectives specified by the State, companies for developing port and railway these being as follows: Lithuanian strategic documents highlight the infrastructure. importance of the development of Lithua­nian − To manage (maintain, renew) public railway infrastructure and interaction with the AB Lietuvos Geležinkeliai is also active on the railway infrastructure EU transport network. Particular attention has international markets of transport services − To conduct efficient rail freight been directed to the implementation of Rail developing the projects for freight shuttle operations, i.e. to transport transit freight Baltica project, i.e. on 28 October 2014 the trains Viking, Saulė, and Mercury. and provide services to local legal entities Baltic States signed a landmark agreement − To provide socially necessary rail services following which a joint venture, RB Rail, was It is important to note that skilful and − To implement strategic rail infrastructure established by Lithuanian, Latvians and Esto­ competent employees of AB Lietuvos Gele­ projects nian railway undertakings. Close attention žin­­keliai are able to address challenges, − To ensure positive return on equity (to the has been devoted to the East–West transport implement su­ccessfully strategic targets and shareholder, i.e. the State). corridor, namely to infrastructure development develop effectively the Lithuanian railway projects on the railway line Kena–Klaipėda; transport industry. In 2014, the company operated at a profit; the main installation work at the intermodal the range of services was expanded and terminals in Vilnius and Kaunas public logistics SAULIUS GIRDAUSKAS consi­derable investment made in the railway centres was completed; the investment project Vice-Minister of Transport and Communications industry. for the modernisation of signalling and power Chairman of the Board supply equipment at Kaunas Station, on the AB Lietuvos Geležinkeliai AB Lietuvos Geležinkeliai further remains bypass line Palemonas–Rokai–Jiesia as well as the most significant transport company on the line Kaunas–Kybartai was implemented; in Lithuania, as well as one of the largest all 2007–2013 EU-funded projects related to employers and investors. the development of Klaipėda railway hub were also completed. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 5

The year 2014 was profitable for AB Lietuvos Rail Baltica project were carried out, all projects The company management constantly strive Geležinkeliai: the company maintained stable related to the development of Klaipėda railway to improve working and social conditions freight flows as well as generating stable reve­ hub were implemented, electrification works for employees, are concerned about their nues. on the section from Naujoji Vilnia to the motivation and training. It is very important to State border with Belarus were commenced. establish and retain stable workforce whose A total of 49.0 million tonnes was transported A modern Traffic Management Centre efforts will help the company to overcome in 2014, a rise of 1.0 million tonnes or 2.0% over was also launched in 2014 with the aim to challenges. the previous year. Freight turnover, compared conduct efficient train traffic operations and to 2013, had increased by 7.2%. management. STASYS DAILYDKA Director General In 2014, for the first time, major freight flows in I am very pleased to note that the performance AB Lietuvos Geležinkeliai the international cargo traffic were those from of AB Lietuvos Geležinkeliai was recognised Belarus. They accounted for 44.9% of the total and appreciated, i.e. the container train Viking freight transported on international routes. was announced the best Green Logistics and Co-Modality project in Europe; the company AB Lietuvos Geležinkeliai was actively also won an environmental award established collaborating with partners from Belarus, by the Lithuanian Ministry of Social Security Kazakhstan, China and Russia. and Labour, as well as receiving other awards.

The year 2014 reached record levels in terms of The year 2014 marked the two important anni­ investment and work performed. A number of versaries: the 155th anniversary of railways investment projects worth nearly LTL 1.4 bi­llion in Lithuania and the 95th anniversary of were implemented. Intensive works under the independent Lithuanian railways. 6 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

REVIEW OF COMMERCIAL AND FINANCIAL PERFORMANCE

BASIC INDICATORS

INDICATOR 2014 2013

ASSETS AND EQUITY (LTL MILLIONS)

Assets 6,965.4 6,205.4

Equity 3,494.4 3,432.4

TOTAL REVENUES (LTL MILLIONS) 1,632.4 1,614.3

Revenues from core activities (sales) 1,594.2 1,578.2

Revenues from financing and investing activities 2.9 3.5

Other revenues 35.3 32.6

TOTAL COSTS (LTL MILLIONS) 1,545.4 1 503.0

Costs of core activities 1,513.1 1,481.4

Costs of financing and investing activities 28.7 18.7

Other costs 3.6 2.9

RESULT (LTL MILLIONS)

Profit before tax 87.0 111.3

Net profit 70.4 97.1

FINANCIAL INDICATORS

Liquidity (current assets/current liabilities), % 0.9 0.7

Gross profit margin (gross profit/sales), % 16.6 16.5

Net profit margin (net profit/sales), % 4.4 6.2

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) (LTL millions) 470.1 493.0

Return on Assets (ROA) (net profit/assets), % 1.0 1.6

Return on Equity (ROE) (net profit/equity), % 2.0 2.8

INVESTMENT (LTL MILLIONS)

Investment 1,145.2 1,095.7

Company funds invested 299.2 346.8

STAFF

Number of staff 10,480 10,643

Average monthly salary (LTL) 3,380 3,198

Sales income per employee (LTL thous./person) 157.2 153.3 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 7

CHANGES IN THE BALANCE SHEET The current assets went up by 11.2% amounting An increase of 36.3% was represented in to LTL 435.7 million due to the increase in the the item of grants and subsidies amounting In 2014, the assets of the company rose by balance sheet items, e.g. trade receivables, to LTL 1,981.3 million. This was determined 12.2% amounting to LTL 6,965.4 million. The cash and cash equivalents. The current assets by the efficient use of European Structural non-current assets accounted for 93.7% in accounted for 6.3% in the total asset structure. Funds for financing the modernisation and the total asset structure, an increase of 12.3% development of public railway infrastructure. up to LTL 6,529.7 million, compared to 2013. In 2014, the shareholder’s equity grew by The changes in the non-current assets were 1.8% to LTL 3,494.4 million. Following the In 2014, the liabilities rose by 12.9% and accoun­ essen­tially determined by the increase in both shareholder’s order on the use of the reserves ted for LTL 1,489.7 million. By the end of 2014 the tangible and intangible assets. A rise of for investment, the amount of company’s the company’s loan portfolio had comprised 2.5 times in the intangible assets was due to statutory capital was increased by LTL 81.5 LTL 1,051.8 million. Compared to 2013, the the acquisition of new software. The tangible million of own funds. Under the resolution long-term liabilities to credit institutions had assets of the company grew by 11.8% due of the Lithua­nian government, the statutory grown by 1.4 times. The company had 11 long- to high-value investment projects in public capital was also raised by LTL 2.2 million from term loans, of which major part was used to railway infrastructure, as well as rolling stock state-owned financial assets allocated for the finance the EU-funded investment projects modernisation and renovation (a significant administration of joint Lithuanian, Latvian in infrastructure. The short-term liabilities increase was represented in the balance sheet and Estonian company implementing the decreased by 13.6% due to faster settlement items, such as construction in progress and investment project, Rail Baltica 2. with suppliers and contractors. prepayments, vehicles, plant and machinery). In 2014, the company paid out to the government a total of LTL 10.6 million as dividend. 8 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

REVENUES PASSENGER REVENUES accounted for 5.5% locomotives and engine-crews abroad, the in the total revenue structure amounting use of wagons abroad), provides the services In 2014, the company earned LTL 1,632.4 million to LTL 89.6 million in 2014, a decline of 0.3% related to the repair and maintenance of rolling as revenues, a rise of 1.1% over 2013. from the previous year due to a decrease in stock, asset lease, freight handling and storage, passenger traffic. In 2014, a total of LTL 9.4 sales of scrap iron. The nomenclature of FREIGHT REVENUES accounted for 82.1% million subsidies were allocated from the State services contains about 100 positions. In 2014, in the total revenue structure amounting budget to finance passenger traffic, of which the revenues from operating aforementioned to LTL 1,340.1 million. The revenues earned LTL 8.3 million for reimbursing privileged services amounted to LTL 164.5 million and from freight services in 2014 rose by 1.5% passengers and LTL 1.1 million for offsetting accounted for 10.1% in the total revenue over the previous year due to an increase in operating losses on domestic routes. structure. This figure represented a decline of international freight transportation volumes 2.2% from the previous year. The decreased through Klaipėda Port, thus determining the OTHER REVENUES. The company also renders demand on the market for company- total reven­ue growth. other related services, i.e. operates outside owned freight wagon lease resulted in the the country (freight transportations on the considerable slump in reven­ues generated territory of other countries, operation of from rolling stock- or other asset lease. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 9

2

3

4 1 5

1,765.7 1,661.0 1,614.3 1,632.4

1,393.5

REVENUE STRUCTURE IN 2014, %

1. FREIGHT 82.1

2. PASSENGER 5.5

3. OTHER SUPPLEMENTARY SERVICES 10.1

4. OTHER ACTIVITIES 2.1

5. INVESTMENT ACTIVITIES 0.2

2010 2011 2012 2013 2014

TOTAL REVENUES, LTL millions 10 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

COSTS impacted considerably on the amount of total costs in 2014. However, the reduction The costs incurred by the company in 2014 in diesel prices and more efficient use of the amounted to LTL 1,545.4 million, an increase of rolling stock fleet led to lower fuel costs while 2.8% over 2013. the extension of useful life of certain fixed asset groups resulted in lower depreciation The increase in minimum monthly salaries expense. in 2014 produced a significant growth in remuneration costs; also, more extensive Remuneration costs represented the major than in the previous year locomotive repair part in the total cost structure and accounted programme determined higher repair for 35.5%; the non-current asset depreciation costs. Higher operating expenses due to costs and the costs of fuels comprised 23.3% the provisions created for doubtful debts and 13.4% respectively.

3

2

4

5

6

7 8 1 9

COST STRUCTURE IN 2014, %

1. REMUNERATION 35.5 6. REPAIRS 6.3

2. FUELS 13.4 7. FINANCIAL AND INVESTMENT COSTS 1.9

3. DEPRECIATION (AMORTISATION) 23.3 8. SETTLEMENTS WITH RAILWAY UNDERTAKINGS IN OTHER COUNTRIES 4.7 4. ENERGY RESOURCES 2.0 9. OTHER COSTS 7.4 5. MATERIALS 5.5 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 11

147.3

130.2

97.1

70.4 65.4

PROFIT

The company operated at a profit in 2014. The profit before tax comprised LTL 87.0 million (cf. 2010 2011 2012 2013 2014 LTL 111.3m in 2013), and the net profit accoun­ ted for LTL 70.4 million (cf. LTL 97.1m in 2013). NET PROFIT, LTL millions 12 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

OPERATING RESULTS OF SUBSIDIARY COMPANIES

In 2014, AB Lietuvos Geležinkeliai Group consisted of AB Lietuvos Geležinkeliai and its subsidiary companies.

Net profit (loss) during Company the reporting year (LTL Core activity thous.)

UAB Vilniaus Lokomotyvų Remonto Depas 3,071.4 Rolling stock repairs and manufacturing

UAB Geležinkelio Tiesimo Centras 6,784.5 Track repairs and construction

UAB Gelsauga 1,634.3 Security and cleaning services

Railway design and exploration work, construction UAB Geležinkelių Projektavimas 233.9 of buildings and renovation

Waste management and logistics, protection and UAB Geležinkelių Aplinkosaugos Centras (49.0) preservation of railway forests and plantations

Shareholder of the Baltic joint venture, RB RAIL AS, UAB Rail Baltica Statyba (1,225.8) responsible for the implementation of Rail Baltica 2 project

UAB VAE Legetecha 5,803.2 Turnout manufacturing With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 13

FREIGHT SERVICES

In 2014, AB Lietuvos Geležinkeliai carried 49.0 prevented from considering more options in In 2014, rail TRANSIT FREIGHT made up million tonnes of freight, an increase of 2.0% rail transportations of crude oil and petroleum 10.3 million tonnes or 14.9% down 2013. The over 2013, of which import freight accounted products. Major flows of import freight were overwhelming majority of transit freight was for 41.0%, domestic freight for 29.6%, transit those from Belarus to Russia through Klaipėda transported to Kaliningrad. The considerable freight for 21.0%, while export freight Seaport. In 2014, rail import freight through the decrease in the aforementioned freight flows constituted 8.4% of the total freight structure. port constituted 14.3 million tonnes, a rise of in neighbouring markets owing to unstable 36.3% over the previous year. economic situation affected negatively the IMPORT FREIGHT amounted to 20.1 million company’s revenues. A decline of 34.2% was tonnes in 2014, a rise of 27.5% over the pre­ In 2014, DOMESTIC FREIGHT accounted for recorded in transportations of petroleum vious year. Chemical and mineral fertilisers 14.5 million tonnes or 4.2% down the 2013 figu­ products while 25.9% in ferrous metals. The accounted for 55.1% of the total import freight re. Crude oil and petroleum products made up decreasing transportation flows of these transported, petroleum products for 16.7%, 35.4% (AB Orlen Lietuva), chemical and mineral commodities have already become a trend. mineral products for 11.0%, and ferrous metals fertilisers 24.2% (AB Achema, AB Lifosa), mineral Transit freight consisted mostly of petroleum made up 6.2%. Transportations of Belarusian products 18.9% (mostly road metal), and plant pro­ducts (28.6%), solid mineral fuels (21.7%), fertilisers through Klaipėda Seaport increased products 15.9% (mostly grain). In this market food products (12.6%), plant products (10.5%), considerably and made up 9.5 million tonnes segment, the key customers of AB Lietuvos and ferrous metals (10.3%). in 2014. Declines in global oil prices and the Geležinkeliai in 2014 were major Lithua­nian consequent problems experienced by AB factories and companies belonging to sectoral Orlen Lietuva, other suppliers and oil refineries associations.

52.3 49.4 49.0 48.1 48.0

2010 2011 2012 2013 2014

RAIL FREIGHT VOLUMES IN 2010–2013, millions t 14 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

EXPORT FREIGHT constituted 4.1 million In 2014, the company successfully conducted tonnes in 2014 or 18.2% down 2013. As design and construction works for establishing in previous years, petroleum products public logistics centres in Vilnius, Kaunas, and transported from AB Orlen Lietuva to Ukraine, Klaipėda. A particular attention was directed Latvia and Estonia accounted for more than to the projects related to intermodal container half (51.6%) of the total export cargo flows. trains Viking, Mercury, Saulė (the Sun), The decrease of transportation flows was also Šeštokai Express, Baltijos Vėjas (Baltic Wind), observed in almost all other types of export Vilnius Shuttle. The company also offered freight. freight forwarding, warehousing, wagon lease and other services related to freight transportations.

2013 20.1 2014

15.7 15.1 14.5

12.1

10.3

5.1 4.1

TRANSIT IMPORT EXPORT DOMESTIC

RAIL FREIGHT STRUCTURE IN 2013–2014, millions t

2

RAIL FREIGHT STRUCTURE IN 2014, %

1 3 1. IMPORT 41.0

2. EXPORT 8.4

3. TRANSIT 21.0

4. DOMESTIC 29.6

4 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 15

PASSENGER SERVICES

In 2014, a total of 4.6 million passengers A total of 274.5 thousand passengers were Passenger revenues amounted to LTL 89.6 were carried by rail, of which 3.7 million on transported in 2014 on international trains million in 2014, of which LTL 27.6 million domestic lines and 0.9 million on international formed by the company, this being 20.4 accoun­ted for domestic rail traffic (up by lines. The company operated totally 207 thousand passengers or 8.0% more than in LTL 195.5 thousand or 0.7% over 2013), LTL passenger trains, of which 183 domestic trains 2013. The growth of passenger flows was due 52.8 million for international rail traffic (up by and 24 international trains. Local passenger to the fact that from 26 May 2013 two trains LTL 114.6 thousand), LTL 1.6 million for other transportation accounted for 80.2%, and formed by the company had been operated revenues (carriage of mail and baggage etc.), international transportation for 19.8%. on the route Vilnius–Minsk. and LTL 7.6 million was allocated from the State budget as subsidies to reimburse privileged In 2014, the number of passengers transported Lower figures in international rail traffic were passengers. in domestic rail traffic decreased by 3.6%, influenced by the decrease in transit passenger and the number of passengers carried in flows crossing the territory of Lithuania. Compared to 2013, passenger revenues from international rail traffic saw a decline of 12.7%, Compared to 2013, a decline of 155.6 thousand full price train tickets had increased by 2.5%, compared to 2013. A fall of 31.3 thousand passengers or 19.1% had been recorded on the from reduced price tickets had fallen by 6.9% passengers or 28.8% was recorded on the trains formed by other countries. while those from termed tickets rose by 15.8%. route Vilnius–Moscow–Vilnius while on the route Vilnius–Saint Petersburg–Vilnius passenger traffic volumes shrank by 17.1 thousand or 28.7%. 16 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

DEVELOPMENT OF In 2014, a contract for purchasing 7 diesel trains Owing to the losses made on the route PASSENGER SERVICES was concluded. They will enable increasing Vilnius–Saint Petersburg–Vilnius, the multiple train frequency as well as organising their trips unit trains operating on this line have been In 2014, AB Lietuvos Geležinkeliai offered new on the basis of fast and regional trains. The first reduced to 3 coaches since 1 June 2014, as well opportunities to travel, i.e. a new popular train is scheduled to be launched in March as applying additional marketing techniques, route Vilnius–Šiauliai–Vilnius was launched on 2016. e.g. discounts of up to 12% and bonuses of up Fridays and Sundays; since September the train to 3% depending on the anticipation period. has been operating daily. In view of the impact of tourism on the However, due to the continuous decline in the economic growth of the country, considerable number of passengers this route is intended to In order to speed up travel times, local routes attention was devoted to the improvement be cancelled starting from 1 June 2015. were revised and travel times of 3 routes were in international traffic. In 2014, a contract reduced in 2014. With the launch of Express was signed for purchasing 3 double-deck In order to restore communication with Poland trains on the route Vilnius–Klaipėda–Vilnius electric trains. The first train is scheduled to be upon implementing the Rail Baltica project on with only one stop in Šiauliai, the travel time commissioned in the early summer of 2016. the section State border–Kaunas, cooperation from Vilnius to Klaipėda was reduced to 3 was conducted with the representatives of hours 40 minutes. Following the passenger The decreasing passenger flows and Polish Railways. surveys, fast trains started operations on the consequent losses raised the issue of relevance route Vilnius–Ignalina–Turmantas–Vilnius thus of the route Vilnius–Moscow–Vilnius; therefore, The deployment of e-ticketing system reducing its travel time by half an hour. discussions were held with the representatives allowing passengers to purchase tickets to of Russian Railways on the route development intercity trains online was completed in 2014. Since June 2014, extra 3 trains have been opera­ opportunities, flexible pricing etc. ting on the most popular route Vilnius–Kaunas– Vilnius. In the same year, contract obligations for purchasing 6 double-deck electric trains were executed. A total of 10 new double-deck trains EJ575 were operated in 2014. They were running in Kaunas direction and with other electric trains in Trakai direction.

89.9 89.6 84.4 89.3

76.6 2013 2014 4.8 4.6

3.8 3.7

1.0 0.9

DOMESTIC INTERNATIONAL TOTAL 2010 2011 2012 2013 2014

PASSENGER TRANSPORTATIONS, PASSENGER REVENUES, LTL millions

With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was millions of people ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 17

ROLLING STOCK

In 2014, the traction fleet of AB Lietuvos Gele­ In 2014, a total of 15 new shunting locomotives AVERAGE GROSS WEIGHT OF žinkeliai consisted of the following vehicles: TEM TMH were purchased from a subsidiary A FREIGHT TRAIN, t company, UAB Vilniaus Lokomotyvų Remonto − 44 freight locomotives Siemens ER20CF Depas; they were manufactured using the − 25 freight locomotives 2M62K with the main frame and undercarriage of the Russian 2010 2011 2012 2013 2014 internal combustion engine D49 and shunting locomotive TEM18, as well as the 29 freight locomotives 2M62M with the power unit and control modules analogous to 2,756 2,794 2,833 2,859 2,938 internal combustion engine Caterpillar ČME3M produced by CZ LOKO. − 16 freight locomotives M62K with the The overall performance of freight trains was internal combustion engine D49, of which On average, 65.1 freight locomotives were 26,704 million gross tkm in 2014, an increase of 2 standard gauge locomotives operated daily in 2014 (cf. 64.5 locomotives in 3.8% over 2013. − 56 shunting locomotives TEM TMH 2013). − 19 shunting locomotives ČME3, 5 PERFORMANCE OF FREIGHT TRAINS, locomotives ČME3M with the internal The average daily efficiency of freight millions of gross tkm combustion engine Caterpillar (1450 kW) locomotives was 1,124.0 thousand gross tkm and 17 locomotives ČME3ME with the (cf. 1,092.7 thousand gross tkm in 2013). internal combustion engine Caterpillar 2010 2011 2012 2013 2014 (940 kW) AVERAGE DAILY FREIGHT − 15 shunting locomotives TEM2 and 1 25,953 28,600 27,265 25,733 26,704 LOCOMOTIVE MILEAGE, km locomotive TGK2.

In 2014, the operating speed fell from 46.8 to The locomotives have been allocated to Vil­ 2010 2011 2012 2013 2014 46.2 km/h. The diesel fuel consumption per nius or Radviliškis Locomotive Depots with 10 thousand gross tkm made up 20.8 litres (cf. their workshops at Vaidotai, Kaunas, Klaipėda, 559.5 550.8 551.4 545.8 551.5 21.3 litres in 2013). and Bugeniai. The traction rolling stock has been registered with the Register of Rolling Stock and Containers. 18 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

The freight wagon fleet consisted of 8,784 The modernisation of freight wagons is wagons in 2014, of which: conducted in two ways: (1) purchase of new wagons, and (2) extension of the life cycle to − 1,519 covered wagons existing wagons. No new freight wagons were − 218 universal flat wagons acquired in 2014; however, the life cycle was − 1,670 low-sided wagons extended to 930 freight wagons. − 1,862 tank wagons − 3,515 other wagons. In 2014, the passenger rolling stock fleet consisted of the following vehicles: Scheduled repairs to wagons are conducted at Radviliškis Freight Wagon Depot which − 9 passenger locomotives belongs to AB Lietuvos Geležinkeliai. − 82 passenger coaches − 68 diesel train coaches AB Lietuvos Geležinkeliai focuses its attention − 43 electric train coaches. on the modernisation of freight wagons. The experience of railway administrations from other countries and knowledge of specialised educational institutions have been used for this purpose.

2,737 2,689 2,674 2,621 2,573

1,674

1,436 1,410 1,421 1,435

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

ELECTRIC PASSENGER TRAIN MILEAGE, DIESEL PASSENGER TRAIN MILEAGE, millions km millions km With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 19

TECHNICAL DEVELOPMENT AND INVESTMENT POLICY

AB Lietuvos Geležinkeliai following the The year 2014 was the reporting year on the Lithuanian and Belarusian railway section objectives specified in the European use of EU Structural Funds support for 2007– Naujoji Vilnia–Kena–State border–Gudogai– Union strategic documents is consistently 2013. Major investment projects essential Molodecno to be implemented in Lithuania. implementing the modernisation and for the entire European Union were being The project is carried out in association with development plans for Lithuanian railway implemented, e.g. the construction of Rail the representatives of Belarusian Railways. This transport sector. Baltica. A total of 15 EU-funded projects were is the second railway electrification project in scheduled to be implemented in the period the country and the first such project in the Lithuanian railway transport sector deve­ of 2014–2020 amounting to LTL 2,711.5 million history of independent Lithuania. lopment strategy is inseparable from the (EUR 785.3 million), of which EUR 667.0 million improvement in employee social environment, accounted for EU support. The construction of second tracks on staff promotion and continuous training the section Šiauliai–Klaipėda was further for employees. Technological progress, In 2014, the company invested in Lithuanian conducted, as were the construction works balanced investment policy, commitment railways LTL 1,145.2 million, up by almost LTL of Vilnius bypass; the main installation work at to partners and the public, deployment of 49.4 million over the previous year: LTL 536.2 the intermodal terminals in Vilnius and Kaunas advanced intelligent transportation systems million was the EU support, LTL 299.2 million public logistics centres was completed and the and offering a wide range of services – these accounted for own funds, LTL 295.9 million for terminal management structure was formed. are the company’s core priorities, of which bank loans, and LTL 13.9 million was allocated Coo­peration with Lithuanian and foreign successful implementation determines the from the State budget. transport companies, State authorities and competitive advantage of Lithuanian railway academic institutions occupied a significant transport system on the international and RAILWAY INFRASTRUCTURE role in pla­nning and implementing railway domestic markets of transport services, the infrastructure modernisation projects. RENEWAL AND MODERNISATION quality of services provided to individuals and legal entities, optimisation of railway In 2014, a total of LTL 459.3 million was RAIL BALTICA PROJECT network operation as well as traffic safety and invested in the renewal and modernisation environmental friendliness. of railway infrastructure; the value of assets A total of LTL 448.7 million was allocated acquired and works performed amounted for implementing the Rail Baltica project in to LTL 499.7 million. The following major 2014; the works performed amounted to LTL STRUCTURE OF INVESTMENT projects were completed: the modernisation 658.1 million. IN 2014, % of signalling and power supply equipment at Kaunas Station, on the bypass line DEVELOPMENT OF 2 Palemonas–Rokai–Jiesia as well as on the FREIGHT SERVICES line Kaunas–Kybartai; the reconstruction of the railway section Kaunas (Palemo­nas)– Investment in freight services amounted to Gaižiūnai; the infrastructure modernisation of LTL 161.9 million in 2014; the value of assets the connecting line Klaipėda–Pagėgiai; the acquired and works performed totalled LTL 1 3 reconstruction of Rimkai Station tracks; the 149.2 million. The company purchased 14 reconstruction of ferry terminal tracks as well shunting locomotives TEM TMH, conducted as railway track No. 54; the deployment of overhaul repairs to 376 freight wagons; 45 flat railway interlocking systems on the second wagons were converted to timber transporting tracks and on Nemunas tracks. A modern wagons, 5 flat wagons were modernised Traffic Management Centre was put into (adjusted for transporting refrigerated operation, traffic safety ensuring software was containers), 15 stations were equipped with 4 deployed (railway emergency management modern information terminals for customers, system), electrification work was started on the cons­truction works at Radviliškis fuel depot the section Naujoji Vilnia–Kyviškė–Kena–State were completed, other freight infrastructure border with Belarus. This project is part of a objects were reconstructed and sidetrack 1. OWN FUNDS 26.1 joint project covering the electrification of repairs were performed. 2. FUNDS FROM STATE BUDGET 1.2

3. EU FUNDS 46.8

4. BORROWED FUNDS 25.9 20 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

IMPROVEMENT IN IT DEVELOPMENT issues. In 2014 in association with academic PASSENGER SERVICES institutions and consulting companies, the Investment in the development of IT and manual on 1,435 mm gauge railway track was Investment in passenger services amounted other activities made up LTL 14.7 million in prepared, research in modelling operational, to LTL 60.6 million in 2014; the value of assets 2014; the value of equipment acquired and environmental and energy indicators of freight acquired and works performed totalled LTL works performed amounted to LTL 12.6 million. locomotives was conducted, the expediency 60.3 million. The company purchased 2 double- The improvement in company’s information of using additional partial filtering equipment deck electric trains (currently 7 double-deck systems resulted in expanding the existing for internal combustion engine oil in traction trains consisting of 3 coaches and 3 double- trunk networks and computer networks in rolling stock was assessed, a feasibility deck trains consisting of 2 coaches are in the buildings, upgrading faulty or outdated study on the competitive environment and operation) and one passenger locomotive computer networks and hardware, updating development of domestic and international TEP-70; overhaul repairs were conducted IT infrastructure security and surveillance rail passenger traffic was carried out, a to 4 passenger cars, passenger rolling stock systems. comprehensive study on the heritage of maintenance facilities were reconstructed, broad gauge railway stations on the section technological equipment was acquired, RESEARCH WORK Turmantas–Marcinkonys was made, the e-ticketing system was launched allowing functionality of an information system for passengers to purchase train tickets online, Closer interaction between research, stu­ analysing train dynamic driving modes and by phone or collec­ting them from self-service dies and business is specified in the national assessing the impact of train ride affecting ticket vending machines. long-term development strategy. AB factors was expanded, the technological Lietuvos Geležinkeliai is investing in research process for regenerating waste oils into liquid work related to relevant railway transport fuels was developed. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 21

In 2014, in addition, the opportunities for using renewable (alternative) energy sources in the Lithuanian railway transport sector and alternatives for the development of one track at Draugystė railway station were started to be analysed, the strategy for ensuring competitive advantage of Lithuanian railways by 2025 was started to be developed, hazards and risks posed by rolling stock wheel set geometry and rolling surface defects were started to be assessed, experimental research into the technology of operational diagnostics and performance characteristics of diesel- engine freight and shunting locomotives was conducted.

INVESTMENT FUNDS ACCORDING TO 1,145.2 DIRECTORATES, LTL millions

1,095.7

763.0

638.7 479.8 463.4 606.9 459.3 438.7

386.4 370.4

269.5 261.7

179.5 185.3 161.9 136.9

83.9 84.7 75.1 63.9 60.6 49.0 34.6 4.9

2010 2011 2012 2013 2014

RAILWAY INFRASTRUCTURE DIRECTORATE FREIGHT DIRECTORATE PASSENGER DIRECTORATE INFORMATION TECHNOLOGY CENTRE, RAIL BALTICA PROJECT DIRECTORATE ETC.

22 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

INFRASTRUCTURE

The convenient geographical location, well- The year 2014 saw further implementation Design works related to 5 projects were also developed Lithuanian railway network, ice-free of the EU-funded projects related to the further carried out: Klaipėda Seaport, skilled technical capacities – moder­nisation and development of railway these are the factors that make a considerable infrastructure. The design and contract − Reconstruction of the section Lithuanian impact on the transport system in this country. work rela­ted to the following 8 projects was and Belarusian border–Kena–Vilnius (Co­ successfully completed: rridor IX) The two international transport corridors ha­ − Upgrade of the line Vilnius–Kaunas for ving an especial importance for the whole − Installation of traffic management increasing train speeds up to 160 km/h European transport system cross the territory equipment − Reconstruction of the section Šiauliai– of Lithuania: − Reconstruction of the railway section Joniškis–Lithuanian and Latvian border Po­lish and Lithuanian border–Mockava − Construction of second track on the − Corridor I (Helsinki–Tallinn–Riga–Kaunas– (1,435 mm gauge track) section Livintai–Gaižiūnai Warsaw) − Reconstruction of the railway section − Electrification of Vilnius railway hub. − Corridor IXB (Kiev–Minsk–Vilnius–Šiauliai– Kaunas (Palemonas)–Gaižiūnai Klaipėda), and IXD (Kaišiadorys–Kaunas– − Infrastructure modernisation of the In 2014, several advanced infrastructure Kaliningrad). co­nnecting line Klaipėda–Pagėgiai projects were implemented. − Installation of interlocking on the second The total length of Lithuanian railway lines track and on Nemunas track area A total of two units of rail lubrication makes up 1,767.6 km, of which 122 km of − Design and reconstruction of the railway equipment were acquired and installed. The electrified lines and 391.0 km of double tracks; section Jonava–Radviliškis–Šiauliai wear of rails mostly occurs on the sections with there are 104 railway stations, 545 level cro­ − Design and construction of an intermodal small-radius curves where maximum forces ssings and 410 overpasses and bridges. terminal at Vilnius public logistics centre are exerted, therefore, said equipment ensures − Design and construction of an intermodal quality side rail lubrication thus reducing wear In order to integrate into the TEN-T network, terminal at Kaunas public logistics centre. on rails and extending their service life. to make rail transport more attractive and competitive, to ensure safe and high-quality Following technical projects, the two works A new rail turnout installation technology rail passenger and freight services between contracts were also signed in 2014: for the was started to be implemented in 2014. The Northern and Eastern Europe, Central Asia, construction of second track on the section turnouts with their control equipment were fully the Baltic States and other EU countries, Tel­šiai–Lieplaukė and for the 1st stage of assembled and adjusted at the factory and AB Lietuvos Geležinkeliai invested in the the electrification on Corridor IX. A tender transported to the worksite by special tilting development of railway infrastructure network for contract works under the project for the platforms. This technology ensured fast and in 1996–2014 more than LTL 4.59 billion, of construction of second track on the section high-quality installation of turnouts. which LTL 2.05 billion came from the EU funds. Žeimiai–Luk­šiai was announced. In 2014 alone, investment in the renewal and The two level crossings on the line development of rail infrastructure amounted In 2014, tender documents for 5 projects Vilnius–Naujoji Vilnia were equipped with to LTL 310.8 million of the EU funds; a total of were prepared: 1) the construction of second microprocessor-based automated signalling LTL 405.2 million accounted for investment track on the section Gimbogala–Linkaičiai; and control systems. They block the funds, while LTL 452.3 million for the assets 2) the construction of second track on the carriageway by the four barriers; additional acquired and works performed. section Šilainiai–Kėdainiai; 3) the construction safety measures (e.g. digital video surveillance of se­cond track on Vilnius bypass Pušynas– system with thermal imaging cameras etc.) The main objectives of infrastructure deve­ Paneriai (Corridor IXB); 4) the first stage of the inform the railway safety staff of hazards, lopment cover raising speed limits, track electrification on Corridor IX; 5) the deployment in addition, the ima­ge of a level crossing is capacity and maximum weight of freight of ERTMS and related systems on the Rail Baltica transferred by a wireless radio communication trains, strengthening the subgrade, improving section Lithuanian and Polish border–Kaunas. system to the train driver approaching the design parameters, increasing axle load level crossing. limits, reducing side slopes, raising the radii The contract works related to the 4 projects of curves on the routes, conducting the for infrastructure modernisation were further electrification of lines as well as modernising conducted, i.e. the construction of second track telecommunications and train traffic on Vilnius bypass sections Kyviškės–Valčiūnai, management systems. Telšiai–Dūseikiai, Pavenčiai–Raudėnai and Kū­

With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was lu­pėnai–Kretinga (Corridor IXB). ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 23

In order to improve track technical parameters Baltica section Šiauliai–Joniškis–Lithuanian and ensure traffic safety, different track repairs and Latvian border as well as that of second were performed in 2014: track construction on the Rail Baltica sections Gaižiūnai–Jonava and Šilainiai–Kėdainiai; − 41.2 km of tracks were renewed the projects were revised and adjus­ted for − 27.5 km of existing tracks were the sections Gaižiūnai–Jonava and Šiauliai– reconstructed Joniškis–Lithuanian and Latvian border; the − 30.3 km of tracks were repaired procedures were specified for the issuance − 139.5 km of rails were replaced by new of construction permits; the 1,520 mm gauge long rails reconstruction project was completed for − 104 turnouts were replaced or laid the Rail Baltica section Jonava–Radviliškis– − 1 bridge was reconstructed and one Šiau­liai; the contract works were conducted overhaul repair performed on the sections Šeštokai–Marijampolė, − 2 platforms were reconstructed Marijampolė–Kazlų Rūda, and Kazlų Rūda– − 11 level crossings were repaired. Kaunas. A total of 123 km of railway line was being constructed from Kaunas to the border PROJECT RAIL BALTICA with Poland.

In 2014, the reconstruction works were Rail Baltica Statyba, a subsidiary company of completed on the section Polish and AB Lietuvos Geležinkeliai, was registered in Lithuanian border–Mockava (1,435 mm 2014 with the aim to carry out the Rail Baltica gauge track was laid); a feasibility study for 2 project covering the construction of Euro­ the reconstruction and modernisation of pean-standard gauge to Helsinki through the the section Rokai–Palemonas–Kaunas was territories of Lithuania, Latvia and Estonia. prepared and a contract was signed for the Rail Baltica Statyba represents the interests of reconstruction design of said section; a Lithuania in implementing the Rail Baltica 2 technical project was prepared for the Rail project. 24 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

ENVIRONMENTAL PROTECTION

The effective use of energy and natural company in 2014; techniques for improving The monitoring of groundwater was further resources as well as the implementation of technological processes were also pursued. carried out at 9 subdivisions of the company; environmental requirements are among the A total of 16 accidents with ecological effects as many as 11 waterworks and 65 shaft wells priorities of AB Lietuvos Geležinkeliai. were investigated, of which rapid elimination belonging to the company were monitored. In resul­ted in no harm made to nature. A total case of every violation of permissible norms, In 2014, environmental services were started of 5,800 tonnes of waste was handled and specific measures were taken to eliminate to be provided on contractual basis by delivered to waste management companies. the infringements, e.g. shaft well disinfection a subsidia­ry company, UAB Geležinkelių performed, oil products collected from the Aplinkosaugos Centras (Railway Environmental Control measurements of environmental surface of groundwater, filters replaced etc. Centre). The Centre organises and carries out emissions were carried out, at a frequency the management of waste and its logistics, required by law, at the stationary air pollution The Railway Environmental Centre also maintenance of wastewater treatment sources operated by the company (30 units prepared the draft strategic environmental plants, preparation of wagons for operation, monitored). The findings did not record any impact assessment report within the laboratory tests and measurements, large excesses over the allowable levels. framework of the long-term Lithuanian railway preparation of environmental documentation, sector strategy (by 2030). protection and preservation of railway forests A total of 80 wastewater treatment plants and plantations. were supervised in 2014: the contamination of discharged water was monitored, as well In view of monitoring of the environmental as performing laboratory tests on wastewater conditions of Lithuanian railways and samples. Wastewater treatment plant prevention of abuses, as many as 44 objects maintenance work and renovation were also were inspected at different subdivisions of the conducted on a regular basis. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 25

TRAFFIC SAFETY

A total of 53 railway traffic events were recor­ The company’s railway safety staff constantly ded in 2014 (cf. 40 events in 2013). Most of submit proposals to the State Railway these events occurred owing to the fault of Inspectorate regarding the amendments employees from other companies. The only to traffic safety regulations and normative cause of said rail traffic events was the human documents, e.g. comments were submitted for factor. reducing the noise of locomotive horn signals as well as those for additional safety measures As many as 11 accidents owing to the fault of at level crossings. Following said comments, motorists were recorded at the level crossings the Li­thuanian Transport Minister in November in 2014, involving 3 fatalities and 4 injuries (cf. 2014 supplemented the Railway Signalling 10 accidents in 2013 involving 1 fatality and 7 Rules with the following signs: Low Whistle injuries). board (mounted before the tunnels, bridges and railway crossings within the boundaries In 2014, totally 38 rail traffic events associated of cities and towns; by sounding an audible with pedestrians were recorded in which 18 warning, low whistle, a train driver will warn people had perished. the people near train tracks of the danger without threat to health or life). Another sign, In order to ensure railway traffic safety, internal Approaching a Level Crossing, with white light audits on the safety management system mounted before level crossings will inform are performed, action plans to eliminate the a train driver about the operation of level drawbacks identified during the audits are crossing equipment, i.e. if the light is flashing developed and their execution controlled, or steady the signalling equipment operates safety rules and instructions are being revised, correctly, if the light is off the signalling regular staff training in safety issues and equipment is out of order. certification of employees are being organised. AB Lietuvos Geležinkeliai railway traffic safety policy was developed in the summer of 2014 and approved by the General Manager; job des­criptions for the employees related to railway traffic were updated.

In the autumn of 2014, the company’s railway safety staff in association with the representatives of the State Railway Inspectorate eva­luated the draft 2015–2016 train traffic schedule in terms of traffic safety, i.e. examined emerging risks to passengers in the event of a multiple unit passenger train exceeding the length of platforms, as well as specifying additional safety measures, e.g. the number of passing trains at railway stations was reduced to minimum during passenger embarkation and disembarkation. 26 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

INFORMATION TECHNOLOGY

In 2014, the implementation of the IT The information system for accounting projects launched in previous years was locomotive drivers’ working time, locomotive further conducted by the company. Major IT operation time, repairs and fuel consumption projects covered the establishment of data was developed: a contract was signed for communication network, the design and installing the aforementioned module, the installation of cargo accounting systems, as module of locomotive operation control, crew well as ensuring information security. management and waybill accounting was also deployed. Installation works of the module of The year 2014 saw further development accouting locomotive fuel by waybills and of and modernisation of the company’s data interfaces with other information systems at communication trunk network. A total of 40 the company were further conducted; they are units of active data transmission equipment scheduled to be completed in 2015. were installed in order to improve the quality of data communication network and to The company’s website www.litrail.lt was increase the bandwidth between servers. updated, a new internal portal (intranet) was launched, and a new email distribution IT security infrastructure was modernised and and reminder system for employees was developed, i.e. centralised software for external developed. storage devices as well as specialised cyber attack and intrusion detection system were SAP BusinessObjects, business intelligence deployed. IT infrastructure monitoring and and analytics platform, was further being management systems were also developed, implemented: the development of operational e.g. computer auditing system, energy sa­ving reporting module launched in late 2013 was system and internet traffic control system completed. The company’s IT staff developed were installed. Risk management information the locomotive waybill reporting module. system was also implemented, as well as acquiring hardware and software. The document management system was improved: the database was optimised, system In the year 2014, freight accounting information modules updated, the system adapted to systems aimed at facilitating the related tasks the adoption of the Euro, the confidentiality were further developed, i.e. new functions of information ensured. The drawing were added to information systems KROVINYS management system, Autodesk Vault, used by (Cargo), OPKIS (operative compu­ter-based railway infrastructure staff was updated while information system for haulage), and STOKIS geographic information systems software was (computer-based information system for supplemented with new modules. stations).

Information system mySAP (finance accoun­ ting and business management system) was adapted to the adoption of the Euro.

In 2014, the personnel management and payroll accounting information system was being further developed and implemented: a contract for the purchase of services related to additional functionality of said system was concluded, the payroll and working time accoun­ting modules were implemented. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 27

INTERNATIONAL RELATIONS

The Lithuanian railway sector having between Lithuania and the Kaliningrad Region On 21–23 May 2014, AB Lietuvos Geležinkeliai become modern and reliable during the was held on the initiative of AB Lietuvos participated in the 18th Kazakhstan Interna­ years of independent Lithuania is of extreme Geležinkeliai and Lithuanian Consulate General tional Transport & Logistics Exhibition in importance for this country as well as for the in Kaliningrad. Astana. international coo­peration with both the EU and CIS countries. On 6 February 2014, the initial meeting of the On 17 October 2014, the 10th meeting Baltic Council for Rail Cross-Border Cooperation of Kazakh–Lithuanian intergovernmental COOPERATION WITH BELARUS was held in Saint Petersburg. At this mee­ting, commission on trade and economic the Baltic Council, a regional consultative cooperation was held in Vilnius. The meeting body of Belarusian, Estonian, Latvian, Finnish, was attended by AB Lietuvos Geležinkeliai and Belarusian Railways remains one of the key Kaliningrad and Saint Petersburg railways Kazakhstan Temir Zholy senior managers and partners to the company in freight services. (the latter two being the branches of Russian professionals. The year 2014 saw a high number of intense Railways) was established upon a proposal meetings of working groups, bilateral mee­ from the representatives of Russian Railways. On 2–3 December 2014, the Kazakhstan tings, negotiations and other events contribu­ The Memorandum of Understanding on delegation visited Vilnius and Klaipėda. The 3rd ting to successful cooperation. cooperation was signed and the Baltic Council meeting of a working group on container train Regulations were approved. AB Lietuvos Saulė was held to discuss more efficient use of On 27–28 February 2014 and 9 May 2014, Geležinkeliai has observer status at the Baltic containers. In 2014, a meeting of Lithuanian mee­tings among senior managers of both Council. and Kazakhstan working groups was held companies were held in Minsk, where the for the first time in independent Lithuania; issues related to the progress in implementing On 28 July 2014, an agreement on the issues of attracting additional rail freight the Nemunas contrailer train project, establishing a joint venture of Vilnius flows and investment were discussed at this electrification of the section Molodecno– Locomotive Maintenance Depot and Russian meeting. Gudogai–State border–Kena–Naujoji Vilnia, TransKomplektHolding was signed at the communication between Vilnius and Minsk, company’s headquarters in Vilnius. This type transit traffic, tariffs, and freight transportations COOPERATION WITH CHINA of cooperation will contribute to expanding between Belarus and Lithuania were discussed. locomotive maintenance services to the AB Lietuvos Geležinkeliai representative office markets of Russia, Uzbekistan, Kazakhstan, commenced its activities in the People’s On 29–30 August 2014, the negotiations bet­ Belarus, and Ukraine. Republic of China in 2014. ween senior managers of both companies were held in Vilnius to discuss the issues of freight On 26–27 November 2014 in Kaliningrad, a On 12–16 May 2014, Chinese industry transportation through Belarusian–Lithuanian meeting between senior managers of AB Lie­ representatives visited Lithuania with the aim border crossing points, implementation of tuvos Geležinkeliai and Kaliningrad Railways of assessing opportunities and prospects for the fast passenger train Minsk–Vilnius project, was held to address the issues related to the freight transportation by the new Silk Road as well as reconciling positions in sol­ving improvement in both passenger and freight connecting China, Kazakhstan and Belarus to different questions. car maintenance technologies on the section Western Europe. During the visit, AB Lietuvos Chernishevskoe–Kybartai, opportunities for Geležinkeliai organised a conference, Eco­no­ On 15 December 2014 at Naujoji Vilnia railway increasing the speed of passenger trains, as mic Silk Road Corridor. station, the electrification work was started well as discussing the route Klaipėda–Moscow on the section Naujoji Vilnia–Kyviškės–Kena– for container train Mercury, and opportunities On 20–23 October 2014, AB Lietuvos State border with Belarus. This project is part for extending contrailer traffic routes. Geležinkeliai delegation participated in the Silk of a joint project covering the electrification Road Logistics Conference and Exhibition in of Lithuanian and Belarusian railway section China, where they met with senior managers Naujoji Vilnia–Kena–State border–Gudogai– COOPERATION WITH KAZAKHSTAN of port and forwarding companies. Molodecno. On 5 May 2014 in Astana, AB Lietuvos Geležinkeliai and Kazakhstan Temir Zholy On 28 October 2014, the representatives of COOPERATION WITH RUSSIA concluded a cooperation agreement aiming China United International Rail Container at increasing freight flows through the most Co. Ltd. made a visit to Lithuania. The aims On 23 January 2014 in Kaliningrad, the efficient use of opportunities and resources of the meeting were ensuring consistent round table discussion on the cooperation available from Lithuanian Railways and cooperation, increasing rail freight flows as opportunities for increasing rail freight flows Kazakhstan Temir Zholy. well as efficient use of infrastructure. 28 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

COOPERATION WITH POLAND On 9–10 September 2014, a meeting of the GEFCO Taşımacılık ve Lojistik A. Ş., signed Border Commission of Lithuanian and Polish the Memorandum of Understanding on On 10 April 2014 in Warsaw, AB Lietuvos railways was held in Vilnius to discuss the cooperation in increasing freight flows Geležinkeliai hosted a conference on issues related to the organisation of freight between Turkey and Lithuania, also between Organising Freight Traffic by Rail Baltica and passenger transportations, cooperation the Baltic Sea Region and Middle East, as between Lithu­ania and Poland. The issues between Lithuanian and Polish railways, as well as promoting freight transportation by related to the opportunities for rail freight well as the Rail Baltica project. container train Viking. transportations, container and contrailer traffic, logistics, forwarding and cooperation COOPERATION WITH TURKEY COOPERATION WITH ROMANIA were discussed. In 2014, freight transportation agreements were signed with DB Schenker The Turkish market is very important for the On 3–5 February 2014, AB Lietuvos Rail AG, DB Schenker Rail Polska, PKP Cargo; development of the project for container train Geležinkeliai delegation had a meeting with negotiations were conducted with Intra S. A. Viking. In 2014, the Viking development plan the representatives of Romanian railway on the launch of a new container train route was officially approved in Istanbul, Turkey, by transport industry in Bucharest. The aim of of Wloclawek–Šeštokai–Klaipėda. Cooperation the representatives of Lithuanian, Turkish and the visit was to continue the development was also maintained with Hupac Intermodal S. Romanian railways, as well as by Rofersped of the container train Viking, as efficiently as A. regarding the joint container train Šeštokai– (Viking operator in Romania) and Plaske (Viking possible, to Turkish–Scandinavian directions Express running on the route Warsaw– operator in Ukraine). The purpose of this plan through implementing mutually beneficial Šeštokai–Kena–Minsk–Smolensk. is to expand the container train route to Tur­ projects with DB Schenker Rail Romania and kish–Scandinavian directions. Romanian rail freight transportation company, On 4 September 2014, AB Lietuvos Geležinkeliai CFR Marfa S. A. The involvement of Romania and DB Schenker Rail Polska concluded On 19–21 November 2014, AB Lietuvos opens up even more opportunities for further agreements on providing services related to Geležinkeliai delegation visited the development of the train Viking, enhances its rail freight forwarding and international freight international exhibition, Logitrans 2014, held competitiveness and is strategically favourable traffic. in Istanbul. During this visit, AB Lietuvos for freight transportation between Turkey and Geležinkeliai and Turkish logistics company, European countries. With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 29

COOPERATION WITH LATVIA In July 2014 in Vilnius, the opportunities for of European Railway and Infrastructure cooperation among Swiss company, Hupac Companies): the company’s experts were Lithuanian and Latvian railway companies Intermodal S. A., AB Lietuvos Geležinkeliai participating in preparing the development confirmed their intention to improve rail and Klaipėda Seaport were discussed. strategy for the 8th freight corridor and the communication between both countries and The companies agreed to cooperate in integration of Lithuanian railway infrastructure agreed to establish a joint working group for transporting rail freight on the Rail Baltica into the European transport infrastructure; solving related issues. The working group line and on the corridor North Sea–Baltic Sea, UIC (Interna­tional Union of Railways): in examined the organisational, legal and as well as in developing container trains and discussing the technical, commercial and economic aspects of cross-border passenger opportunities to connect with other corridors. law enforcement issues related to passenger communication on the route Šiauliai–Riga– transportation by rail; CIT (International Rail Šiauliai. In view of the liberalisation of transport Currently AB Lietuvos Geležinkeliai repre­ Transport Committee): in discussing legal and market and passenger flows between Šiauliai sentative offices operate in 3 countries, regulatory issues concerning rail carriage. OSJD and Riga, the two companies decided to namely, in the Republic of Belarus, the Russian (Organisation for Cooperation of Railways) jointly use their services and rolling stock. This Fede­ration and the People’s Republic of China. organised 3 workshops: OSJD Commission on route is expected to become competitive with In 2015, the company is planning to establish Passenger Traffic workshop on harmonisation road transport. a representative office in Astana, the Republic issues of international passenger train of Kazakhstan. timetables for 2014–2015; the XLII session of COOPERATION WITH OTHER OSJD Ministers Conference; and a workshop COOPERATION WITH AND of OSJD/ERA Contact Working Group of the COUNTRIES AND BUSINESS Commission on Transport Policy Development PARTICIPATION IN INTERNATIONAL PARTNERS Strategy. The company’s representatives also ORGANISATIONS participated in GTT (CIS Rail Transport Council) On 4–5 December 2014 in Karlshamn, Sweden, workshops, conferences or negotiations on a report on rail logistics and prospects for In 2014, AB Lietuvos Geležinkeliai were actively the issues concerning passenger and freight Lithuanian railways was delivered in the con­ participating in the activities of international traffic in the CIS countries. ference, Baltic Trade and Transport. railway organizations. CER (the Community 30 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

HUMAN RESOURCES AND SOCIAL INITIATIVES

The company had employed 10,480 people IMPROVEMENT IN WORKING EMPLOYEE TRAINING AND in 2014. CONDITIONS COOPERATION WITH EDUCATIONAL INSTITUTIONS AVERAGE WAGE AND In 2014, a total of LTL 3.5 million was spent WORKFORCE PRODUCTIVITY on arranging workstations, improving Considerable attention was paid to staff working conditions as well as on necessary training and retraining. In 2014, as many as The average monthly salary increased to LTL occupational safety and health measures. 6,987 employees underwent training; the 3,380 in 2014, a rise of LTL 182 or 5.7% over 2013. Health care spending accounted for alloca­tions for employee training amounted approximately LTL 0.5 million: the company to around LTL 1 million of the company funds. The labour productivity expressed by revenues financed regular mandatory health checks and from core activities per employee was LTL 157.2 extensive diagnostic examinations of the staff; In the 2014/2015 academic year, a total of 476 thousand in 2014, an increase of 2.5% over 2013 all staff members could have free vaccination employees are studying at universities and (cf. LTL 153.3 thousand in 2013). against tick-borne encephalitis and influenza. colleges. The company provided financing up to 50% for 28 employees in the Autumn The labour productivity according to relative In 2014, the total number of occupational Semester 2014. production was 1,480.6 thousand tkm/ accidents and incidents had decreased, employee in 2014, a rise of 7.2% over 2013 (cf. compared to the previous year (cf. 19 accidents Following the cooperation agreements 1,380.6 thousand tkm/employee in 2013). and incidents recorded in 2013 and 17 in 2014). signed with educational institutions, students were accepted for practical placements as well as faculty internships organised. In 2014, practical placements were provided for 675 students from universities and colleges while internships for 11 people; totally 91 students participated in educational trips.

THE NUMBER OF EMPLOYEES LABOUR PRODUCTIVITY, thousands LTL/employee

167.7 10,634 10,601 159.0 157.2 10,318 10,505 10,480 153.3

135.9

With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 31

SOCIAL NEEDS OF EMPLOYEES a year during traditional festivals – the Railway Company Caring Best of Employees’ Physical Day Festival in August and final annual event Activity held by the Lithuanian Ministry of In 2014, a total of LTL 5million was allocated for in December. Health. addressing the social needs of employees, e.g. for improving their quality of life, developing In 2014, the company itself received a AB Lietuvos Geležinkeliai employees actively a healthy lifestyle skills, ensuring prevention number of awards in different categories: participated in different social campaigns, of the most prevalent diseases, their early the National Socially Responsible Business e.g. planted trees in various cities and towns diagnosis and effective treatment. Award for a constructive dialogue between the during World Cleanup 2014 Let’s Do It! Lithua­ company management and representatives of nia; they also joined other campaigns held by EMPLOYEE PROMOTIONS, trade unions awarded in the category of large public organisations, e.g. raised money for the DEVELOPING SOCIAL businesses; according to the survey conducted poor people in this country. RESPONSIBILITY by a recruitment agency, CV Market, the company was selected as the second best Company employees have been encouraged The Most Attractive Employer 2014; award and rewarded for good performance. Awards in the category of large businesses of the such as Honour Sign of Railroader, the competition Favourite Company 2014 from the Company Sign for Merit, annual nominations Lithuanian Business Confederation; winner of for teams and staff are usually presented twice the Startup nomination in the competition 32 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

MAJOR EVENTS IN 2014

23 January: Rail Baltica Statyba, a subsidiary 16 June: AB Lietuvos Geležinkeliai representative the company’s employees and their fami­ company of AB Lietuvos Geležinkeliai, was regis­ office was opened in Beijing. One of the lies commemorated these two anniversaries tered. The objectives of this company are to opening events was a Lithuanian and important for Lithuanian railways during the supervise the establishment of the new public Chinese transport forum titled China–Lithu­ celebration of Railway Day, a long-standing infrastructure and to defend the public interest ania: Silk Road Economic Belt. During the professional festival. in accordance with the laws of Lithuania. Rail forum, a Memorandum of Understanding on Baltica Statyba is a founder and shareholder of cooperation was signed by AB Lietuvos Gele­ 10 October: a mosaic panel, Dream Travels, was a joint venture of the three Baltic States, RB Rail, žinkeliai, the Lithuanian National Associa­tion of presented at Vilnius Railway Station. The panel which is responsible for the implementation Forwarders and Logistics, Lineka, and the China was created by more than 250 children with of Rail Baltica 2 project. Rail Baltica Statyba will International Freight Forwarders Association. disabilities and other project participants under represent Lithuania’s interests in carrying out the leadership of ceramicist Sonata Kazimie­ said project. 24 July: AB Lietuvos Geležinkeliai launched raitienė. the new Traffic Management Centre. The April: container train Viking won a BESTFACT centre is responsible for the organisation and 16 October: beloved companies were elec­ted research programme award for Best Practice management of train traffic in this country, in Lithuania. The contest ‘I Love My Company’ in Green Logistics and Co-Modality; the award auto­matic train scheduling and adjustment, had reached the final – the most unani­mous, was received by the company’s executives in allocation of time slots for railway infrastructure creative and enthusiastic staff teams were Paris. maintenance and repair works, as well as awarded. AB Lietuvos Geležinkeliai was declared prompt res­ponse to emerging dangerous the winner in the category of large companies. June: AB Lietuvos Geležinkeliai won the situations rela­ting to traffic safety and efficiency. The competition was attended by more than 70 nominations of Environmental Enterprise 2013 companies. They were divided into 4 categories and Top Workplace 2013 in the competitions The year 2014 marked the 155th anniversary of according to the number of employees. organised by the Lithuanian Ministry of Social railways in Lithuania and the 95th anniversary of Implementing the project ‘I Love My Company’, Security and Labour. independent Lithuanian railways. On 30 August, the Lithuanian Business Confe­deration aims to With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 33

strengthen corporate microclimate, improve Report 2013. It showed that Lithuania had made construction. The plant is unique in a way that relations between employees and employers, progress in the field of rail traffic safety. In view different types of rolling stock can be cleaned in foster employee loyalty and team spirit, as well of the number of major rail traffic accidents, one place. In the adjacent countries, a separate as encouraging creative ideas and initiatives. Lithuania rose per year to No. 8 from No. 12 and washing facility is built for every locomotive ranked among the top 10 safest countries in series. 28 October: the Baltic States concluded a terms of rail traffic safety. landmark agreement following which a joint 15 December: the electrification work was venture, RB Rail, was established by Lithuanian, 27 November: the representatives of the Lithua­ started at Naujoji Vilnia railway station on the Latvians and Estonian railway undertakings. nian Railway Museum received from the Mayor section Naujoji Vilnia–Kyviškės–Kena–State The new company will be responsible for of Vilnius an award ‘Vilnius Hospitality 2014’. border with Belarus . This is the second railway implementing the international project, Rail The railway museum was recognised the most electrification project in this country and the Baltica. The European-standard gauge railway hospitable museum in Vilnius. Located inside first such project in the history of independent will connect the Baltic States to Finland and the train station itself, the museum is visited by Lithuania. The implementation of the project Poland. It will be the first project of this size approximately 3, 000 people monthly. will result in more attractive passenger to be implemented jointly by the three Baltic services, more efficient freight services States. The Memorandum of Association was 8 December: an automatic rolling stock and reduced environmental pollution. The signed by the heads of Rail Baltica Statyba washing plant started operating at Radviliškis project will also contri­bute to strengthening (Lithuania), Eiropas Dzelzcela Linijas (Latvia) and Locomotive Depot. The plant offers cleaning the bilateral relations between Lithuanian Rail Baltic Estonia (Estonia). The ceremony was services for railcars and locomotives, including and Belarus. The said railway infrastructure also attended by the Ministers of Transport of shunting locomotives. In the future, electric modernisation project significant for both the three Baltic States. locomotives that are scheduled to be acquired countries is scheduled to be completed in the will be also cleaned in this plant. The building of spring of 2016. November: the European Railway Agency (ERA) the plant amounted to LTL 9.5 million, excluding published the EU Railway Safety Performance VAT; the company’s own funds were used for its 34 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

MANAGEMENT STRUCTURE

MINISTRY OF TRANSPORT AND COMMUNICATIONS OF THE REPUBLIC OF LITHUANIA

THE BOARD

HEAD OFFICE

FREIGHT RAIL BALTICA PROJECT DIRECTORATE DIRECTORATE

RAILWAY INFRASTRUCTURE INFORMATION TECHNOLOGY DIRECTORATE CENTRE

PASSENGER DIRECTORATE

SUBSIDIARY REPRESENTATIVE OFFICES IN COMPANIES FOREIGN COUNTRIES With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 35

INDEPENDENT AUDITOR‘S REPORT

36 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

BALANCE SHEETS (LTL)

GROUP COMPANY

As of As of As of As of ASSETS 31 December 31 December 31 December 31 December 2014 2013 (revised) 2014 2013 (revised)

A. NON-CURRENT ASSETS 6 502 223 130 5 769 193 448 6 529 710 468 5 813 502 401

I. INTANGIBLE ASSETS 63 553 920 26 509 064 60 943 417 24 194 352

II. PROPERTY, PLANT AND EQUIPMENT 6 416 185 262 5 721 845 552 6 312 662 652 5 648 261 757

II.1. Land and buildings 784 809 527 797 686 012 755 832 800 769 514 340

II.2. Structures and machinery 2 241 005 930 2 114 430 122 2 166 986 900 2 056 573 860

II.3. Vehicles 1 553 528 435 1 517 851 093 1 547 703 987 1 515 220 221

II.4. Other equipment and tools 59 559 566 46 928 627 55 657 004 43 704 641

II.5. Other property, plant and equipment 3 922 116 7 608 759 3 062 986 9 311 427

II.6. Construction in progress and prepayments 1 769 237 868 1 236 966 000 1 779 297 155 1 253 562 329

II.7. Investment property 4 121 820 374 939 4 121 820 374 939

II.7.1. Buildings 4 121 820 374 939 4 121 820 374 939

III. FINANCIAL ASSETS 10 942 385 9 405 979 145 268 133 127 991 996

III.1. Investments into subsidiaries and associated companies 10 914 396 6 930 428 145 240 144 127 928 290

III.2. Loans to associated companies, subsidiaries and other companies - - -

III.3. Non-current receivables 27 989 2 475 551 27 989 63 706

IV. OTHER NON-CURRENT ASSETS 11 541 563 11 432 853 10 836 266 13 054 296

IV.1. Deferred income tax asset 11 541 563 11 432 853 10 836 266 10 640 921

IV.2. Other non-current assets - - - 2 413 375

B. CURRENT ASSETS 532 520 647 489 475 106 435 673 037 391 909 941

I. INVENTORIES AND PREPAYMENTS 209 503 988 204 053 962 165 908 379 156 428 664

I.1. Inventories 195 234 872 184 520 810 156 221 192 144 323 626

I.2. Non-current assets held for sale 3 340 721 3 487 158 3 340 721 3 487 158

I.3. Prepayments 10 928 395 15 398 375 6 346 466 8 617 880

I.4. Contracts in progress - 647 619 - -

II. CURRENT RECEIVABLES 176 285 709 164 460 826 141 605 501 130 370 925

II.1. Trade receivables 141 837 141 104 205 341 105 699 233 70 834 563

II.2. Receivables from subsidiaries and associated companies 31 260 43 044 3 424 624 1 093 027

II.3. Other receivables 34 417 308 60 212 441 32 481 644 58 443 335

III. OTHER CURRENT ASSETS - 93 101 - 70 000

III.1. Other current assets - 23 101 - -

Loans to associated companies, III.2. - 70 000 - 70 000 subsidiaries and other companies

IV. CASH AND CASH EQUIVALENTS 146 730 950 120 867 217 128 159 157 105 040 352

TOTAL ASSETS 7 034 743 777 6 258 668 554 6 965 383 505 6 205 412 342 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 37

BALANCE SHEETS (CONT‘D)

GROUP COMPANY

As of As of As of As of 31 December 31 December 31 December 31 December 2014 2013 (revised) 2014 2013 (revised)

C. SHAREHOLDERS EQUITY 3 504 473 694 3 445 943 929 3 494 389 657 3 432 362 383

I. EQUITY 3 247 555 809 3 163 841 854 3 247 555 809 3 163 841 854

I.1. Share capital (subscribed) 3 247 552 000 3 163 839 000 3 247 552 000 3 163 839 000

I.2. Share premium 3 809 2 854 3 809 2 854

II. REVALUATION RESERVE (RESULTS) - - - -

III. RESERVES 176 434 902 171 435 611 176 434 902 171 435 611

III.1. Legal reserve 85 745 222 80 890 976 85 745 222 80 890 976

III.2. Other reserves 90 689 680 90 544 635 90 689 680 90 544 635

IV. RETAINED EARNINGS (DEFICIT) 80 482 983 110 666 464 70 398 946 97 084 918

IV.1. Current year’s profit (loss) 66 901 437 104 373 652 70 398 946 97 084 918

IV.2. Previous year’s profit (loss) 13 581 546 6 292 812 - -

D. GRANTS AND SUBSIDIES 1 982 309 332 1 455 289 959 1 981 335 295 1 454 032 020

E. LIABILITIES 1 547 960 751 1 357 434 666 1 489 658 553 1 319 017 939

I. NON-CURRENT LIABILITIES 1 015 624 213 762 206 545 1 006 673 608 759 914 753

I.1. Financial borrowings 988 742 387 706 010 121 981 482 898 705 666 205

I.2. Trade payables 430 908 34 214 475 430 908 34 214 475

I.3. Provisions 26 450 918 21 454 865 24 759 802 19 506 989

I.4. Other accounts payable and non-current liabilities - 527 084 - 527 084

II. CURRENT LIABILITIES 532 336 538 595 228 121 482 984 945 559 103 186

II.1. Current portion of non-current borrowings 70 728 807 70 379 894 70 344 025 70 379 894

II.2. Financial borrowings 15 120 377 5 967 023 - -

II.3. Trade payables 281 499 370 339 490 217 225 976 032 265 703 779

II.4. Accounts payable to subsidiaries and associated company 1 435 125 980 571 40 140 930 70 316 411

II.5. Prepayments received 15 236 457 22 618 080 15 093 301 15 206 137

II.6. Taxes payable 6 269 343 6 762 726 2 024 003 2 659 960

II.6.1. Income tax liabilities 270 805 1 076 782 - -

II.6.2. Other taxes 5 998 538 5 685 944 2 024 003 2 659 960

II.7. Labour-related liabilities 86 662 102 86 189 368 76 118 011 74 695 418

II.8. Provisions 14 393 107 17 764 766 14 291 167 17 618 436

II.9. Other accounts payable and current liabilities 40 991 850 45 075 476 38 997 476 42 523 151

TOTAL EQUITY AND LIABILITIES 7 034 743 777 6 258 668 554 6 965 383 505 6 205 412 342 38 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014

INCOME STATEMENTS (LTL)

GROUP COMPANY

2014 2013 2014 2013

I. Sales 1 624 040 675 1 637 004 080 1 594 208 564 1 578 144 806

II. Cost of sales (1 340 785 988) (1 347 913 474) (1 328 889 045) (1 317 236 478)

III. GROSS PROFIT 283 254 687 289 090 606 265 319 519 260 908 328

IV. Operating expenses (204 777 481) (183 743 596) (184 158 960) (164 142 344)

V. PROFIT FROM OPERATIONS 78 477 206 105 347 010 81 160 559 96 765 984

VI. Other activities

VI.1. Income 35 390 602 32 248 902 35 296 342 32 609 769

VI.2. Expenses (3 700 178) (2 361 743) (3 589 511) (2 860 453)

31 690 424 29 887 159 31 706 831 29 749 316

VII. Financial and investment activities

VII.1. Income 4 358 726 4 764 237 2 921 477 3 513 582

VII.2. Expenses (29 612 981) (19 479 992) (28 747 448) (18 717 957)

(25 254 255) (14 715 755) (25 825 971) (15 204 375)

VIII. PROFIT FROM ORDINARY ACTIVITIES 84 913 375 120 518 414 87 041 419 111 310 925

IX. Extraordinary gain - - - -

X. Extraordinary loss - - - -

XI. PROFIT BEFORE TAX 84 913 375 120 518 414 87 041 419 111 310 925

XII. Income tax (18 011 938) (16 144 762) (16 642 473) (14 226 007)

XIII. NET PROFIT 66 901 437 104 373 652 70 398 946 97 084 918 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was ANNUAL REPORT 2014 LIETUVOS GELEŽINKELIAI 39 40 LIETUVOS GELEŽINKELIAI ANNUAL REPORT 2014 With the introduction of the euro in Lithuania from 1 January 2015, 1 January in Lithuania from 2015, of the euro the introduction With 3.45280. of EUR 1 = LTL rate exchange the official fixed at euro to converted litas was AB Lietuvos Geležinkeliai Mindaugo g. 12, Vilnius LT-03603, Lithuania Fax. +370 5 269 21 28 [email protected] www.litrail.lt ANNUAL REPORT 2014