AD Plastik d.d.

Quarterly Report • Oct 29, 2010

Reporting period	01.01.2010.	to	30.09.2010.
Trimestral financial statement of the entrepreneur - TFI-POD
03440494 Register number (MB):
060007090 Entity register number (MBS):
48351740621 Personal identification numberj (OIB):
Issuing company: AD PLASTIK d.d. (SC)
21210 Post code and place:		Solin
Street and house number: Matoševa 8
E-mail address: adplastik@adplastik.hr
Internet address: www.adplastik.hr
Solin 406 Municipality/city code and name:
17 County code and name:	Splitsko-dalmatinska		2.271 No. Of employees (at the end of the trimester)
YES Consolidated report			2932 NCA code:
Names of consolidation subjects (according to IFRS):		Seat:	Register number (MB):
AD PLASTIK d.d.		Solin, Croatia	03440494
ZAO PHR		Samara, Russian Federation	103630022193
AD PLASTIK d.o.o.		Novo Mesto, Slovenia	1214985000
ZAO ADP LUGA		Luga, Russian Federation	107471000032
Bookkeeping service:
Contact person: Marica Jakelić
Telephone: 021/206-660		(only the name and surname of the contact person to be entered)	Fax: 021/206-669
E-mail address: marica.jakelic@adplastik.hr
Name and surname: Katija Klepo
(person authorised for representation)
sumentation for publiching:

Documentation for publishing.

1. Financial statements (balance sheet, profit and loss account, cash flow report, report on changes to the capital, and

notes accompanying financial statements)

2. Statement of the persons

(signature of the person authorised for representation)

Up

BALANCE status as of

$30.09,2010.$

amounts in HRK

	A CIP	Previous	Current period
ltem	designation	period
J.	Ð	∵G.	$\Delta$
ACTIVE
A) CLAIMS FOR SUBSCRIBED CAPITAL UNPAID	001
B) FIXED ASSETS	002	607.271.856	652.657.278
I. IMMATERIAL ASSETS	003	59.379.477	50.873.105
II. MATERIAL ASSETS	004	498.608.272	517,255.643
III. FIXED FINANCIAL ASSETS	005	49.284.107	84.354.449
IV. CLAIMS	006
V. DEFERRED TAX ASSETS	007		174.081
C) CURRENT ASSETS	008	364.920.922	323.360.774
I. RESERVES	009	71.713.187	54.377.900
II. CLAIMS	010	232.685.776	196.943.610
III. CURRENT FINANCIAL ASSETS	011	47.375.244	59.438.942
IV. CASH AT BANK AND IN HAND	012	13.146.715	12.600.322
D) PAID EXPENSES OF THE FUTURE PERIOD AND CALCULATED INCOME	013	58.541.664	65.143.733
E) LOSS EXCEEDING CAPITAL AMOUNT	014
F) TOTAL ACTIVE	015	1.030.734.442	1.041.161.785
G) OFF-BALANCE RECORDS	016	7.149.642	7.149.642
PASSIVE
A) CAPITAL AND RESERVES	017	613,204.163	639.424.482
I.CAPITAL STOCK (SUBSCRIBED)	018	419,958.400	419,958,400
II. CAPITAL RESERVES	019	160.483.340	181.282.980
III. RESERVES FROM PROFIT	020	5.075.219	287.316
IV. REVALORISATION RESERVES	021	8.489.504	8.489.504
	022	2.160.849
V. RETAINED PROFIT	023
VI. LOSS CARRIED OVER	024	16.268.594	29.386.878
VII. BUSINESS YEAR PROFIT	025
VIII. BUSINESS YEAR LOSS	026	768.257	19,404
IX. MINORITY INTEREST	027	0	5.787.491
B) RESERVES	028	153.262.003	130.416.918
C) FIXED LIABILITIES	029	262.907.577	260.655.494
D) CURRENT LIABILITIES	030	1,360.699	4.877.400
E) DEFERRED PAYMENT OF EXPENSES AND INCOME OF THE FUTURE PERIOD	031	1.030.734.442	1.041.161.785
F) TOTAL - PASSIVE	032	7.149.642	7.149.642
G) OFF-BALANCE RECORDS
ADDENDUM TO THE BALANCE SHEET (filled in by the entrepreneur compiling the consolidated annual financial statement)
CAPITAL AND RESERVES	033	612.435.906	639,405.078
1. Ascribed to holders of the parent company capital	0.34	768.257	19,404
2. Ascribed to minority interest

PROFIT AND LOSS ACCOUNT

for the period from [01.01.2010.] to [101.01.2010.]

				amounts in HRK
Item	AOP design.	Previous period		Current period
		Cumulative	Trimester	Cumulative	Trimester
	уğ.	86)	A.	s.	Ò.
en ave	035	421.146.201	144.338.086	601,501.601	143.486.245
BUSINESS INCOME	036	415.442.276	142.995.101	510,176.081	142.953.887
1. Sales income	037	547.804	425.275	1.259.732	306.765
2. Income based on the use of own products, goods and services	038	5.156.121	917.710	90.065.788	225.503
3. Other business income	039	406.965.708	138.878.643	572 778 705	127.970.782
II. BUSINESS EXPENSES	040	5.526.931	673.283
1. Decrease of the value of unfinished production reserves	041			1.175.368	1.782.267
2. Increase of the value of unfinished production reserves	042	250.375.622	83.506.339	406.158.920	88.203.868
3. Material expenses	043	82.033.016	27.260.016	91.743.078	28,480.161
4. Staff expenses	044	34.095.556	11.451.542	39.282.750	11.106.344
5. Amortisation	045	33.315.643	15,306.886	29.756.353	3.304.013
6. Other expenses	046
7. Value adjustment	047			5.787.491	-7.376.609
8. Reserves	048	1.618.940	680.577	1,225.481	1.035.272
9. Other business expenses	049	32,839,213	9.851.526	43.432.444	14.892.574
III. FINANCIAL INCOME 1. Interest, currency exchange rate variations, dividends and similar income from relations with					$-1.169$
	050	8.142.737	$-519.464$	18.060.305
associated entrepreneurs
2 Interest, currency exchange rate variations, dividends and similar income from relations with	051	18,357,547	8.351.321	19,581,383	11.625.014
non-associated entrepreneurs		6.338.929	2.019.669	5.790.756	3.268,729
3. Part of income from associated entrepreneurs and participating interests	052
4. Unrealised profit (income)	053
5. Other financial income	054	42.138.772	10.593.834	39,876,073	21.176.239
IV. FINANCIAL EXPENSES	055
1. Interests, currency exchange rate variations and other expenses with associated	056	16.329.450	2.489.067	8,942.270	6.004.863
entrepreneurs
2. Interests, currency exchange rate variations and other expenses with non-associated	057	25.809.322	8.170.832	22,856.443	10.027.418
entrepreneurs			$-66.065$	8.077.360	5.143.958
3. Unrealised financial assets losses (expenses)	058
4. Other financial expenses	059
OFF-BALANCE - OTHER INCOME	060
VI. OFF-BALANCE - OTHER EXPENSES	061	453.985.414	154.189.612	644.934.045	158.378.819
VII. TOTAL INCOME	062		149.472.477	612.654.778	149, 147.021
VIII. TOTAL EXPENSES	063	449.104.480	4.717.135	32.279.267	9,231.798
IX. PROFIT BEFORE TAXATION	064	4.880.934
X. LOSS BEFORE TAXATION	065			2.880.866	2,644.272
XI. INCOME TAX	066		4.717.135	29.398.401	6.587.526
XII. PERIOD PROFIT	067	4.880.934
XIII, PERIOD LOSS	068
ADDENOUM TO THE P&L (filled in by the entropreneur compiling the consolidated annual financial statement)			4.450.865	29.386.878	6,576,949
XIV. PROFIT ASCRIBED TO HOLDERS OF THE PARENT COMPANY CAPITAL	069	5,595 603	266.270	11.523	10.57
XV. PROFIT ASCRIBED TO THE MINORITY INTEREST	070
XVI. LOSS ASCRIBED TO HOLDERS OF TH PARENT COMPANY CAPITAL	071	714.669
	072

$\mathcal{L}$

XVII.* LOSS ASCRIBE TO THE MINORITY INTEREST

$\bar{z}$

CASH FLOW REPORT - Indirect method

in the period from $\boxed{311.2010}$

$30.9.2010$ $\mathfrak{t}$

amounts in HRK

$\mathcal{A}^{\mathcal{A}}$

$\sim 10$

item	AOP	Previous period	Current period
	designation 2.	32.	Ø.
CASH FLOW FROM BUSINESS ACTIVITIES	073	4.880.934	32.279.267
1. Profit before taxation	074	34.095.556	39.282.750
2. Amortisation	075	14.812.978	7.052.109
3. Increase of current liabilities 4. Decrease of current claims	076		29.140.097
	077	35.309.168	17.335.287
5. Decrease in reserves 6. Other increase of cash flow	078	3.654.182
I. Total increase of cash flow from business activities	079	92.752.818	125.089.510
1. Decrease of current liabilities	080
2. Increase of current clims	081	17.261.549
3. Increase of reserves	082
4. Other decrease of cash flow	083		9.057.254
II. Total decrease of cash folw from business activities	084	17.261.549	9.057.254
A1) NET INCREASE OF CASH FLOW FROM BUSINESS ACTIVITIES	085	75.491.269	116.032.256
A2) NET DECREASE OF CASH FLOW FROM BUSINESS ACTIVITIES	086
CASH FLOW FROM INVESTMENT ACTIVITIES
1. Cash inflows from sale of fixed material and immaterial assets	087	5.167.443	46.872.141
2. Cash inflows from sale of ownership and debt instruments	088
3. Cash inflows from interest	089	3.835.565	8.457.384
4. Cash inflows from dividends	090
5. Other cash inflows from investment activities	091
III. Total cash inflows from investment activities	092	9.003.008	55.329.525
1. Cash expenditures for purchase of fixed material and immaterial assets	093	17.855.386	96.295.890
2. Cash expenditures for acquisition of ownership and debt financial instruments	094	8.077.731	34.222.399
3. Other cash expenditures from investment activities	095
IV. Total cash expenditures from investment activities	096	25.933.117	130.518.289
B1) NET INCREASE OF CASH FLOW FROM INVESTMENT ACTIVITIES	097
B2) NET DECREASE OF CASH FLOW FROM INVESTMENT ACTIVITIES	098	16.930.109	75.188.764
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash inflows from issuing ownership and debt financcial instruments	099
2. Cash inflows from credit principal, debentures, loans and other borrowings	100
3. Other inflows from financial activities	101	23.738.067
V. Total cash inflows from financial activities	102	23.738.067	0
1. Cash expenditures for the payment of credit principal and debentures	103	53.094.576	22.845.085
2. Cash expenditures for the payment of dividends	104		5.784.750
3. Cash expenditures for financial lease	105
4. Cash expenditures for repurchase of own shares	106	764.831
5. Other cash expenditures from financial activities	107	19 863 256	12.760.050
VI. Total cash expenditures from ifnancial activities	108	73.722.663	41.389.885
	109
C1) NET INCREASE OF CASH FLOW FROM FINANCIAL ACTIVITIES	110	49.984.596	41.389.885
C2) NET DECREASE OF CASH FLOW FROM FINANCIAL ACTIVITIES	111	8.576.564
Tjotal cash flow increase	112		546.393
Total cash flow decrease	113	7.791.217	13.146.715
Cash and cash equivalents at the beginning of the period	114	8.576.564
Cash and cash equivalents increase	115		546.393
Cash and cash equivalents decrease	116	16.367.781	12.600.322
Cash and cash equivalents at the end of the period

REPORT ON CHANGES TO CAPITAL OF THE STOCK COMPANY

from $1.1,2010$ to $30.9,2010$

amounts in HRK

					amounts in HRK
Item	AOP design	Previous period	Increase	Decrease	Current period
9.	$\overline{\mathbf{z}}$	31.12 of previous year		3	л,
1. Subscribed capital	117	419.958.400			419.958.400
2. Capital reserves	118	160.483.340	20.799.640		181.282.980
3. Reserves from profit	119	5.075.219		4.787.903	287.316
4 retained profit or loss carried over	120	2.929.106		2.909.702	19.404
5. Current year profit or loss	121	16.268.594	13.118.284		29.386.878
6. Revalorisation of fixed material assets	122
7. Revalorisation of immaterial assets	123
8. Revalorisation of financial assets available for sale	124
9. Other revalorisation	125	8.489.504			8 489 504
10. Currency exchange rate variations from the item of net investments into foreign business	126
11. Current and deferred taxes (part)	127
12. Cash flow protection	128
13. Changes in bookkeeping policies	129
14. Correction of significant mistakes from the previous period	130
15. Other changes to capital	131
16. Total capital increase or decrease	132	613.204.163	33.917.924	7.697.605	639.424.482
16a. Ascribed to holders of the parent company capital	133	612.435.906			639.405.078
16b. Ascribed to minority interest	134	768.257			19.404

Financial reports notes

*1 Decrease in intangible assets is the result of value adjustments of projects.

*2 Increase in tangible assets is the result of buying real estate from AD Brodovi d.o.o. and transfer of tools from short-term assets to long-term assets for ZAO PHR.

*3 Long-term assets increased due to founding share in joint venture with Faurecia and ZAO PHR recapitalization.

*4 Inventory has been reduced due to transfer short-terma tangible assets to long-terma tangible assets in the ZAO PHR, also sale of inventory of ADP Luga and decrease inventory in parent Company.

*5 Reservation which are included in the balance sheet are related to the exchange differences in the ZAO PHR.

*6 The increase material costs are the result of inventory sale of ADP Luga and for purchase and supply of material for FADP (which we are shareholders in the joint venture with Faurecia company, our share in the investment in the amounts to 40%).

*7 Reservations shown in a PnL are the result of the constant change in exchange rate of RUR for EUR.

*8 Part of Income and expenditure from the joint venture is result of the realised Income and expenditure from the companies in which we have joint venture with Faurecia. The value is shown with share part method.

M Plostikod

Solin, October 2010.

Content

a)	Introduction to the report	$\overline{2}$
b)	Management Interim Report of the AD Plastik group and company AD Plastik
	Inc. Solin for the period: $01.01 - 30.09.2010$ .	3
	c) Outlook for remaining period 2010th	4
	Addendums:
	Financial reports of AD Plastik group	5
1.	Balance sheet	6
2.	Profit and loss account	7
З.	Cash flow (indirect method)	8
4.	Report on changes of capital	9
	Financial reports of the company AD Plastik Inc. Solin	10
5.	Balance sheet	$\lceil$
6.	Profit and loss account	12
7.	Cash flow (indirect method)	13
8.	Report on changes of capital	4
	d) Statement of the person responsible for drafting the financial reports	15

a) Introduction to the report

Improving business performance

• * Income advanced (Group) to 644,9 mil. kuna Total income is better than the same period last year (42,1%)
• ❖ Profit advanced (Group) to 29,4 mil. kuna Group profit in the same period last year: 4,9 mil. kuna
• Group achieved result is better than planed for the same period Achieved Net profit is beter than planed for 46,3% (planned net profit: 20,1 mil. kuna).

$\int\limits_{\mathbb{R}}$

Financial highlights: 01.01. - 30.09.2010.

Indicator	Cumulative to 30.09, (2010)	Cumulative to (30.09, (2009))	Rate changes (%)
Income from sales (000 HRK)	601.5021	421.146	43%
Total income (000 HRK)	644.934	453.985	42%
Net profit (000 HRK)	29.398	4.881	502%
lindebtedness	0.381	0.39	-5%I

Key developments in 2010th

* Realisation of joint venture contract with the company Faurecia Automotive Holdings (FAH)

The contract was signed for joint operations in the Russian market for automobile production and sale.

Usting on the Official Market of the Zagreb Stock Exchange on September 30th, 2010.

b) Management Interim Report of the AD Plastik group and company AD Plastik Inc. Solin for the period: 01.01. - 30.09.2010.

Main business activity of AD Plastik group is manufacture of plastic parts for automobile industry. Besides this activity, the Group also manufactures package for food industry, products for households, etc.

On September 30th, 2010 the Group employed 2.271 employees, from which 910 were employed in the company AD Plastik Inc. Solin (parent Company).

On September 30th, 2010 the amount of the stock amounted kuna 419.958.400.

There were no changes in the Management structure of the parent Company neither any significant changes in the ownership structure and in the Supervisory Board of the parent Company one member was changed.

The parent Company does not participate in significant legal disputes that could be significant for business running and also there are no cases of significant uncertainty of income collection.

At the end of April company AD Plastik and French company Faurecia Automotive Holdings (FAH) realized joint venture contract for the purpose of common business runing on the Russian market for automobile production and sale.

During the period from January to September 2010 the Group realized total income to the amount of kuna 644,9 million that represents 42,1% more than during the same period in the previous year when the income amounted kuna 453,9 million. Planned income was 556.1 million kung.

For the same period the parent Company realized total income to the amount of kuna 432,13 million that represents 13,5% more than during the same period in the previous year when the income amounted kuna 380,6 million.

Total expenditure of the Group business running during the accounting period amount kuna 612,7 million that represents 36,4% more than during the same period in the previous year when total expedinture of business running amounted kuna 449,1 million. Planned expenditure was 536 million kuna.

On the item of reservations in business expenditure assets to the amount of kuna 5,8 million were reserved due to positive exchange rate differentials.

Total expenditure of the parent Company during the accounting period amount kuna 416,2 million that represents 13,9% more than during the same period in the previous year when total expenditure of business running amounted kuna 365,4 million.

During the monitored period the Group realized profit to the amount of kuna 29,4 million, while during the same period in the previous year it realized the profit to the amount of kuna 4,9 million.

During the same period the parent Company realized profit to the amount of kuna 15,9 million, while during the same period in the previous year it realized the profit to the amount of kuna 15,1 million.

Realized result was better than the planned result for the same period.

c) Outlook for remaining period 2010th

In respect to the trend of realisation we expect that the result for the year 2010 will be better than planned, for the Group as well for the parent Company.

$\begin{array}{c} 1 \ 1 \ 2 \end{array}$

Financial reports of AD Plastik group

1. Balance sheet

Assets

Position (in HRK)	30.09.2010.	30.09.2009.	31.12.2009.	Note
Intangible assets	50.873.105	69.661.349	59.379.477	$*1$
Tangible assets	517.255.643	497.199.237	498.608.272	$*2$
Long-term financial assets	84.354.449	43.659.581	49.284.107	$*3$
Receivables
Deferred tax assets	174.081
Long-term assets	652.657.278	610.520.167	607.271.856
Inventory	54.377.900	54.720.885	71.713.187	$*_{4}$
Receivables	196.943.610	194.540.545	232.685.776
Short-term financial assets	59.438.942	75.424.234	47.375.244
Cash at bank and in hand	12.600.322	16.367.781	13.146.715
Short-term assets	323.360.774	341.053.445	364.920.922
Paid future expenses/calculated income	65.143.733	52.627.239	58.541.664
Loss above subscriben capital
Total assets	1.041.161.785	1.004.200.851	1.030.734.442
Off balanced sheet items	7.149.642	7.149.642	7.149.642

*1 Decrease in intangible assets is the result of value adjustments of projects.

*2 Increase in tangible assets is the result of buying real estate from AD Brodovi d.o.o. and transfer of tools from short-term assets to long-term assets for ZAO PHR.

*3 Long-term assets increased due to founding share in joint venture with Faurecia and ZAO PHR recapitalization.

*4 Inventory has been reduced due to transfer short-terma tangible assets to longterma tangible assets in the ZAO PHR, also sale of inventory of ADP Luga and decrease inventory in parent Company.

Liabilities

Position (in HRK)	30.09.2010.	30.09.2009.	31.12.2009.	Note
Share capital	419.958.400	419.958.400	419.958.400
Capital reserves	181.282.980	161.026.731	160.483.340
Reserves from profit	287.316	5.074.314	5.075.219
Revaluation reserves	8.489.504	8.489.504	8.489.504
Retained earnings		3.444.244	2.160.849
Loss carried forward
Net profit for the period	29.386.878	4.880.934	16.268.594
Loss for the period
Minority interest	19.404	193.734	768.257
Capital and reservs	639.424.482	603.067.861	613.204.163
Reserving	5.787.491			$*5$
Long-term liabilities	130.416.918	159.908.401	153.262.003
Short-term liabilities	260.655.494	235.832.379	262.907.577
Overdraft/factoring	4.877.400	5.392.210	1.360.699
Total liabilities	1.041.161.785	1.004.200.851	1.030.734.442
Off balanced sheet items	7.149.642	7.149.642	7.149.642
Annex to balance sheet
Capital and reserves
Attributable to equity holders	639.405.078	602.874.127	612.435.906
Attributable to minority interests	19.404	193.734	768.257

*5 Reservation which are included in the balance sheet are related to the exchange differences in the ZAO PHR.

2. Profit and loss account

		30.09.2010.		30.09.2009.
Position (in HRK)	Cumulative		3. Q Cumulative	3. Q	Note
Income from sales			510.176.081 142.953.887 415.442.276 142.995.101
Income from usage of own products, merchandise and serv.	1.259.732	306.765	547.804	425.275
Other operating income	90.065.788	225.593	5.156.121	917.710
Operating income			601.501.601 143.486.245 421.146.201 144.338.086
Decrease of work in the progress and finished products			5.526.931	673.283
Increase of work in the progress and finished products	1.175.368	1.782.267
Material expenses	406.158.920		88.203.868 250.375.622	83.506.339	$*_{6}$
Employee costs	91.743.078		28.480.161 82.033.016	27.260.016
Amortisation	39.282.750		11.106.344 34.095.556	11.451.542
Other expenses	29.756.353		8.304.013 33.315.643	15.306.886
Revaluation
Reserves	5.787.491	$-7.376.609$			$*7$
Other operating costs	1.225.481	1.035.272	1.618.940	680.577
Operating costs			572.778.705 127.970.782 406.965.708 138.878.643
Interest, foregin exchange differences, dividens (subsidiaries)	18.060.305	$-1.169$	8.142.737	$-519.464$
Interst, foregin exchange differences, dividens (non subs.)	19.581.383	11.625.014	18.357.547	8.351.321
Income from investment in associates and join ventures	5.790.756	3.268.729	6.338.929	2.019.669	$*8$
Unrealised gains (income)
Other financial income
Financial income	43.432.444	14.892.574	32.839.213	9.851.526
Interest, foregin exc. differences and other expenses (sub.)	8.942.270	6.004.863	16.329.450	2.489.067
Interest, foregin exc. differences and other expenses (non sub.)	22.856.443	10.027.418	25.809.322	8.170.832
Unrealised losses (expenses) from financial assets	8.077.360	5.143.958		$-66.065$
Other financial expenses
Financial expenses	39.876.073	21.176.239	42.138.772	10.593.834
Extraordinary - other income
Extraordinary - other expenses
Total income			644.934.045 158.378.819 453.985.414 154.189.612
Total expenses			612.654.778 149.147.021 449.104.480 149.472.477
Profit before taxes	32.279.267	9.231.798	4.880.934	4.717.135
Loss before taxes
Tax	2.880.866	2.644.272
Net profit for the period	29.398.401	6.587.526	4.880.934	4.717.135
Loss for the period
Annex to Income statment
XIV,* Profit attributable to equity holders	29.386.878	6.576.949	5.595.603	4.450.865
XV.* Profit attributable to minority interests	11.523	10.577		266.270
XVI.* Loss attributable to equity holders
XVII.* Loss attributable to minority interests			714.669

*6 The increase material costs are the result of inventory sale of ADP Luga and for purchase and supply of material for FADP (which we are shareholders in the joint venture with Faurecia company, our share in the investment in the amounts to 40%). *7 Reservations shown in a PnL are the result of the constant change in exchange rate of RUR for EUR.

*8 Part of Income and expenditure from the joint venture is result of the realised Income and expenditure from the companies in which we have joint venture with Faurecia. The value is shown with share part method.

3. Cash flow (indirect method)

Cash flow from operating activities Profit before tax 32.279.267 Amortisation 39.282.750 Increase of curent liabilities 14.812.978 7.052.109 Decrease of curent receivables 29.140.097 Decrease of inventories 17.335.287 35.309.168 Other cash flow increase Total increase of cash flow from operating activities 125.089.510 Decrease of curent liabilities Increase of curent receivables 17.261.549 Increase of inventories Other cash flow decrease 9.057.254 Total decrease of cash flow from operating activities 9.057.254 17.261.549 Net increase/decrease of cash flow from operating activities 75.491.269 116.032.256 Cash flow from investing activities Proceeds from sale of non-current assets 46.872.141 Proceeds from sale of non-current financial assets Interest received 8.457.384 3.835.565 Dividend received Other proceeds from investing activities Total cash inflows from investing activities 55.329.525 9.003.008 Purchase of non-curent assets 96.295.890 17.855.386 Purchase of non-curent financial assets 34.222.399 8.077.731 Other cash outflows from investing activities Total cash outflows from investing activities 130.518.289 25.933.117 Net increase/decrease of cash flow from investing activities -75.188.764 $-16.930.109$ Cash flow from financial activities Proceeds from issues of equity securities and debt securities Proceeds from loans and borrowings Other proceeds from financial activities 23.738.067 Total cash inflows from financial activities 23.738.067 Reapayment of loans and bonds 22.845.085 53.094.576 Dividens paid 5.784.750 Reapayment of financial lease Purchase of treasury shares 764.831 Other cash outflows from financial activities 19.863.256 12.760.050 Total cash outflows from financial activities 73.722.663 41.389.885 Net increase/decrease of cash flow from financial activities -41.389.885 -49.984.596 Total increase of cash flow 8.576.564 Total decrease of cash flow 546.393 Cash and cash equivalents at beginning of period 13.146.715 7.791.217 Increase of cash and cash equivalents 8.576.564 Decrease of cash and cash equivalents 546.393 Cash and cash equivalents at the end of period 12.600.322 16.367.781	Position (in HRK)	Current period Previous period
		4.880.934
		34.095.556
		3.654.182
		92.752.818
		5.167.443

4. Report on changes of capital

Position (in HRK)	31.12.2009.	Increase	Decrease	Current period
Subscribed capital	419.958.400			419.958.400
Capital reserves	160.483.340	20.799.640		181.282.980
Net income reserves	5.075.219		4.787.903	287.316
Retained earnings or loss carried forward	2.929.106		2.909.702	19.404
Net profit or loss for the period	16.268.594	13.118.284		29.386.878
Revaluation of property, plant and equipment
Revaluation of intangible assets
Revaluation of available for sale financial assets
Other revaluation	8.489.504			8.489.504
Foregin exchange differences from investments
Current and deferred tax (part)
Hedging
Change of accounting policies
Change of prior period error
Other changes in equity
Total increase or decrease of equity	613.204.163	33.917.924	7.697.605	639.424.482
Attributable to equity holders	612.435.906			639.405.078
Attributable to minority interests	768.257			19.404

Financial reports of the company AD Plastik Inc. Solin

5. Balance sheet

Assets

Position (in HRK)	30.09.2010.	30.09.2009.	31.12.2009.	Note
Intangible assets	46.665.192	64.296.434	54.660.314	$*1$
Tangible assets	448.011.080	422.699.270	415.012.228	$*2$
Long-term financial assets	204.352.276	138,496,778	168.707.934	$*3$
Receivables
Deferred tax asset
Long-term assets	699.028.548	625.492.482	638.380.476
Inventory	33.830.031	22.021.978	37.296.824
Receivables	176.377.161	215.219.552	227.646.380
Short-term financial assets	59.439.078	87.342.776	60.782.119
Cash at bank and in hand	4.211.088	8.556.061	5.472.575
Short-term assets	273.857.358	333.140.367	331.197.898	$^*4$
Paid future expenses/calculated income	65.142.187	52.627.239	58.539.684
Loss above subscribed capital
Total assets	1.038.028.093	1.011.260.088	1.028.118.058
Off balanced sheet items	7.149.642	7.149.642	7.149.642

*1 Decrease in intangible assets is the result of project value adjustment.

*2 Tangible assets have been increased as the result of buying real estate from AD Brodovi d.o.o..

*3 Long-term financial assets have been increased as the result of investment in joint venture with Faurecia.

*4 Short-term assets have been decreased because of the speed up of inventory turnover and the better collection of receivables.

Liabilities

Position (in HRK)	30.09.2010.	30.09.2009.	31.12.2009.	Note
Share capital	419,958,400	419,958,400	419,958,400
Capital reserves	181.239.161	182.645.027	180.641.899
Reserves from profit	21.783.330	4.983.689	4.983.689
Revaluation reserves	8.489.504	8.489.504	8.489.504
Retained earnings
Loss carried forward
Net profit for the period	15,961,678	15.123.028	22,903,272
Loss for the period
Capital and reserves	647.432.073	631.199.648	636.976.764	$*5$
Reserving
Long-term liabilities	130.350.247	160.350.735	153.194.194	$*_{6}$
Short-term liabilities	255.368.373	214.106.622	236.597.347
Overdraft/factoring	4.877.400	5.603.083	1.349.753
Total liabilities	1.038.028.093	1.011.260.088	1.028.118.058
Off balanced sheet items	7.149.642	7.149.642	7.149.642

*5 Increase of reserves and current profit.

*6 Decrease of indebteness (as a result of decrease of loans and liabilites of suppliers) which now amounts to 37%.

6. Profit and loss account

$\overline{\phantom{a}}$

	30.09.2010.			30.09.2009.
Position (in HRK)	Cumulative		3. Q Cumulative	3. Q	Note
Income from sales			399.242.055 110.292.107 350.054.311 121.471.124
Income from usage of own products, merchandise and serv.	1.259.732	306.765	547.804	425.275
Other operating income	3.132.869	928.643	4.420.337	633.282
Operating income			403.634.656 111.527.515 355.022.452 122.529.681		$*7$
Decrease of work in progress and finished products			5.102.890	-85.949
Increase of work in progress and finished products	636.449	537.041
Material expenses	258, 161, 407		68.450.556 208.793.618	72.218.890	$*8$
Employee costs	70.987.496	23.162.281	65.055.269	22.215.087
Amortisation	31.541.051	10.636.443	29.445.150	9.787.869
Other expenses	24.170.146		8.761.782 31.191.857	15.041.710
Revaluation
Reserves
Other operating costs	1.225.481	1.035.272	1.618.940	680.577
Operating costs			385.449.132 111.509.293 341.207.724 119.858.184		$*9$
Interest, foregin exchange differences, dividens (subsidiaries)	4.008.011	1.144.646	6.461.485	2.111.919
Interest, foregin exchange differences, dividens (non subs.)	18,702,041	11.744.493	12.739.606	3.279.956
Income from investments in associates and join ventures	5.790.756	3.268.729	6.338.930	2.019.670
Unrealised gains (income)
Other financial income
Financial income	28.500.808	16.157.868	25.540.021	7.411.545
Interest, foregin exch. differences and other expenses (sub.)
Interest, foregin exc. differences and other expenses (non sub.)	22.647.294		9.935.500 24.231.721	8.381.599
Unrealised losses (expenses) from financial assets	8.077.360	5.143.958		$-66.065$
Other financial expenses
Financial expenses	30.724.654		15.079.458 24.231.721	8.315.534
Extraordinary - other income
Extraordinary - other expenses
Total income			432.135.464 127.685.383 380.562.473 129.941.226
Total expenses			416.173.786 126.588.751 365.439.445 128.173.718
Profit before taxes	15.961.678		1.096.632 15.123.028	1.767.508
Loss before taxes
Tax
Net profit for the period	15.961.678	1.096.632	15.123.028	1.767.508
Loss for the period

*7 Growth of total sales has been 13,6% better than in the same period of the previous year, and is 14,4% better than the plan.

*8 The growth index of materials used has increased because of the changes in the product mix.

*9 Management of the rest of costs (salary, other production costs, costs outside the mix of products) has led to significant saves, as a result of which the complete index of companies expenses is bellow the growth index of sales and is 12,9%.

7. Cash flow (indirect method)

Position (in HRK)		Current period Previous period
Cash flow from operating activities
Profit before tax	15.961.678	15.123.028
Amortisation	31.541.051	29.445.150
Increase of curent liabilities	22.298.673	21.009.267
Decrease of curent receivables	44.666.716
Decrease of inventories	3.466.793	27.687.369
Other cash flow increase
Total increase of cash flow from operating activities	117.934.911	93.264.814
Decrease of curent liabilities
Increase of curent receivables		30.525.694
Increase of inventories
Other cash flow decrease	5.776.369
Total decrease of cash flow from operating activities	5.776.369	30.525.694
Net increase/decrease of cash flow from operating
activities	112.158.542	62.739.120
Cash flow from investing activities
Proceeds from sale of non-current assets
Proceeds from sale of non-current financial assets
Interest received
Dividend received
Other proceeds from investing activities
Total cash inflows from investing activities
Purchase of non-curent assets	56.544.781	15.305.032
Purchase of non-curent financial assets	34.222.399	8.077.731
Other cash outflows from investing activities
Total cash outflows from investing activities	90.767.180	23.382.763
Net increase/decrease of cash flow from investing activities Cash flow from financial activities	$-90.767.180$	$-23.382.763$
Proceeds from issue of equity securities and debt securities
Proceeds from loans and borrowings
Other proceeds from financial activities		18.835.845
Total cash inflows from financial activities		18.835.845
Repayment of loans and bonds	22.843.947	51.749.954
Dividens paid
Repayment of finance lease
Purchase of treasury shares		764.831
Other cash outflows from financial activities	78.902
Total cash outflows from financial activities	22.922.849	52.514.785
Net increase/decrease of cash flow from financial activities	$-22.922.849$	$-33.678.940$
Total increase of cash flow		5.677.417
Total decrease of cash flow	1.531.487
Cash and cash equivalents at beginning of period	5.742.575	2.878.644
Increase of cash and cash equivalents		5.677.417
Decrease of cash and cash equivalents	1.531.487
Cash and cash equivalents at the end of period	4.211.088	8.556.061

8. Report on changes of capital

Position (in HRK)	31.12.2009.	Increase	Decrease	Current period
Subscribed capital	419.958.400			419,958,400
Capital reserves	180.641.899	597.262		181.239.161
Net income reserves	4.983.689	16.799.641		21.783.330
Retained earnings or loss carried forward
Net profit or loss for the period	22.903.272	15.961.678	22.903.272	15.961.678
Revaluation of property, plant and equipment
Revaluation of intangible assets
Revaluation of available for sale financial assets
Other revaluation	8.489.504			8.489.504
Foregin exchange differences from investments
Current and deferred taxes (part)
Hedging
Change of accounting policies
Change of prior period error
Other changes in equity
Total increase or decrease of equity	636 976 764	33 358 581	22.903.272	647 432 073

d) Statement of the person responsible for drafting the financial reports

According to my best knowledge:

• 1. Financial reports of AD Plastik group and company AD Plastik Inc. Solin, were drafted in accordance with implementation of corresponding reporting standards in the Republic of Croatia. These reports provide complete and truthful overview of the assets, liabilities, profit and loss, financial status and business running of the Group.
• 1. Report on business running contains truthful overwiev of the business results and status of AD Plastik group and company AD Plastik Inc. Solin.

On behalf of the Management Board

Katija Klepo, BSEc. Member of the Board AD Plastik Inc. Matoševa 8, 21210 Solin The Republic of Croatia