Pieno Zvaigzdes

Earnings Release • May 31, 2013

Pieno Žvaigždės, AB Confirmation of the Management

Vilnius, May 31, 2013

Financial statements for the three months of 2013

We, Aleksandr Smagin, Chief Executive Officer and Audrius Statulevičius, Chief Financial Officer, hereby confirm that, to the best of our knowledge, Interim Financial Statements of the three months of 2013 prepared in accordance with IFRS, give true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of AB "Pieno žvaigždės".

CEO

Pieno Žvaigždės, AB Aleksandr Smagin

CFO

Pieno Žvaigždės, AB Audrius Statulevičius

PIENO ŽVAIGŽDĖS, AB

INTERIM FINANCIAL STATEMENTS

For the three months 2013

VILNIUS, MAY 2013

1. Statement of financial position3
2. Statement of comprehensive income4
3. Cash flows statement5
4. Statement of changes in equity 6
5. Notes to the financial statements7

Prepared according to IFRS, not audited

1. Statement of financial position

Thousand Litas	2013.03.31	2012.12.31
Assets
Property, plant and equipment	198 265	197 273
Intangible assets	669	714
Investments available for sale Long-term receivables	275 166	276 -
Deferred tax
Total non-current assets	199 375	198 263
Inventories	57 784	55 142
Receivables	78 593	79 788
Cash and cash equivalents	2 624	4 528
Total current assets	139 001	139 458
Total assets	338 376	337 721
Equity
Share capital	49 634	49 634
Share premium	27 246	27 246
Own shares	-	-
Reserves	33 318	33 559
Retained earnings	45 207	38 060
Total equity	155 405	148 499
Liabilities
Government grants	2 903	3 187
Interest-bearing loans and borrowings	61 773	60 543
Deferred tax	1 862	1 862
Total non-current liabilities	66 538	65 592
Provisions	-	-
Interest-bearing loans and borrowings	52 094	60 975
Income tax payable	2 174	956
Trade and other amounts payable	62 165	61 699
Total current liabilities	116 433	123 630
Total liabilities	182 971	189 222
Total equity and liabilities	338 376	337 721

2. Statement of comprehensive income

Thousand Litas	2013.01.01 - 2013.03.31	2012.01.01 - 2012.03.31
Revenue	186 434	157 899
Cost of sales	(152 452)	(127 916)
Gross profit	33 982	29 983
Other operating income, net	437	138
Sales and administrative expenses	(26 019)	(24 113)
Operating profit before finance costs	8 400	6 008
Finance income	193	66
Finance expenses	( 468)	( 995)
Finance income/expenses, net	( 275)	( 929)
Profit before tax	8 125	5 079
Corporate income tax	(1 219)	( 762)
Profit for the year	6 906	4 317
Earnings per share (Litas)	0,14	0,08

3. Cash flows statement

Thousand Litas	2013.03.31	2012.03.31
Cash flows from operating activities
Net profit	6.906	4.317
Depreciation and amortisation	7.329	8.158
Amortisation of government grants	(284)	(362)
Result of disposal of property, plant and	489	21
equipment
Change in vacation reserve	867	-
Interest income/expenses, net	745	967
Income tax	1.218	762
Cash flows from ordinary activities before	17.270	13.863
changes in the working capital
Change in inventories	(2.642)	(10.698)
Change in receivables	1.028	23.261
Change in trade and other payable amounts	819	(2.819)
Cash flows from operating activities	16.475	23.607
Interest paid	(745)	(967)
Income tax paid	0	(967)
Net cash flow from operating activities	15.730	21.673
Cash flows from investing activities
Acquisition of property, plant and equipment	(8.748)	(7.371)
Acquisition of intangible assets	(15)	(17)
Interest received	10	-
Net cash flow used in investing activities	(8.753)	(7.325)
Cash flows from financing activities
Loans received	3.553	165
Repayment of borrowings	(12.434)	(8.453)
Issue (redemption) of shares	-	(5.766)
Dividends paid	-	(4)
Net cash from/(used in) financing activities	(8.881)	(14.058)
Change in cash and cash equivalents	(1.904)	290
Beginning cash	4.528	1.973
Ending cash	2.624	2.263

4. Statement of changes in equity

Thousand Litas	Share capital	Share premium	Own shares	Compulso ry reserve	Revaluati on reserve	Other reserves	Retained earnings	Total equity
As at 1 January 2012 Profit allocation Dividends	54 205	27 246	(14 435)	5 420	13 979	17 420	43 997	147 832 0 0
Acquisition of own shares Revaluation of fixed assets			(5 766)					(5 766) 0
Depreciation of revaluated part Net profit for 2012					( 280)		280 4 317	0 4 317
As at 31 March 2012	54 205	27 246	(20 201)	5 420	13 699	17 420	48 594	146 383
As at 1 April 2012	54 205	27 246	(20 201)	5 420	13 699	17 420	48 594	146 383
Profit allocation						11 250	(11 250)	0
Dividends							(24 817)	(24 817)
Reduction of share
capital	(4 571)		20 201			(15 630)		0
Revaluation of fixed
assets Depreciation of					1 984			1 984
revaluated part					( 584)		584	0
Net profit for 2012							24 949	24 949
As at 31 December 2012	49 634	27 246	0	5 420	15 099	13 040	38 060	148 499
As at 1 January 2013	49 634	27 246	0	5 420	15 099	13 040	38 060	148 499
Profit allocation								0
Dividends								0
Acquisition of own
shares								0
Revaluation of fixed
assets								0
Depreciation of revaluated part					( 240)		240	0
Net profit for 2013							6 906	6 906
As at 31 March 2013	49 634	27 246	0	5 420	14 859	13 040	45 206	155 405

5. Notes to the financial statements

AB Pieno Žvaigždės was established by way of merger of stock companies Mažeikių Pieninė, Pasvalio Sūrinė, Kauno Pienas and Panevėžio pienas.

The main office of the Company is located in Vilnius and the branches – in Mažeikiai, Pasvalys, Kaunas and Panevėžys.

Ordinary shares of the Company are quoted in the NASDAQ OMX Vilnius Stock Exchange.

The Company is engaged in production and sales of milk products to retail stores directly and through distributors.

Statement of compliance

These are the financial statements of a separate company AB Pieno Žvaigždės, which have been prepared in accordance with International Financial Reporting Standards (IFRS).

Main indicators of the Company's' performance

Ratios	2013.01.01 - 2013.03.31	2012.01.01 - 2012.03.31
Sales, Thousand Litas	186 434	157 899
Gross profit, Thousand Litas	33 982	29 983
EBITDA, Thousand Litas	15 444	13 805
Current ratio (at the end of period)	1,19	1,72
Book value per share (at the end of period), LTL	3,13	2,70
Net profit per share	0,14	0,08

Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Inventories, Thousand Litas	2013.03.31	2012.12.31
Raw materials	19 666	19 077
Stored production	37 501	35 512
Goods for resale	617	553
Total:	57 784	55 142

Segment reporting

A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Company sales production mainly in domestic market, Russia, EU.

Sales, Thousand Litas	2013.01.01 - 2013.03.31	2012.01.01 - 2012.03.31
Lithuania	83 376	78 230
Other EU countries	18 759	16 918
Other non EU countries	84 299	62 751
Total:	186 434	157 899

Post balance sheet events

There were no significant events after the balance sheet date.