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Panevezio Statybos Trestas

Interim / Quarterly Report Aug 31, 2011

2244_ir_2011-08-31_237d4cdf-17c6-4c19-aeda-7a3a393f63d6.pdf

Interim / Quarterly Report

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PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated Interim Financial Statement and Consolidated Interim Report for Six Months of 2011

31 August 2011 Panevėžys

$\bar{v}$

Securities Commission of the Republic of Lithuania Konstitucijos Ave. 23, LT-08105 Vilnius

Vilniaus vertybinių popierių birža AB (Vilnius Stock Exchange) Konstitucijos Ave. 7, 15 Floor, LT-08105 Vilnius

STATEMENT OF EXECUTIVE OFFICERS OF THE COMPANY

Hereby we confirm that based on the information available to us, the interim financial statement of the company and the group provided for the six months of the year 2011 made in accordance with the International Financial Reporting Standards is true and shows the assets. liabilities, financial state, profit or loss of Panevėžio statybos trestas AB and the Company Group of Panevėžio statybos trestas AB in a correct manner, and that the review of business development and performance is indicated correctly in the interim report.

D. Florenty

Dalius Gesevičius Managing Director Panevėžio statybos trestas AB

Sperce

Dalė Bernotaitienė Finance Director Panevėžio statybos trestas AB

AB "Panevėžio statybos trestas" Imonės kodas 147732969 .
PVM mokėtojo kodas LT477329610 VĮ Registrų centro Panevėžio filialas Registravimo pažymėjimo Nr. 013732 http://www.pst.lt

P.Puzino g. 1, LT-35173, Panevėžys Tel. +370 45 505 503 Faks. +370 45 505 520 El.paštas [email protected]

AB SEB bankas B/k 70440 A/s LT517044060002635252 AB "Swedbankas" B/k 73000 A/s Lt947300010000074994

1. Reporting period

The consolidated annual report has been prepared for six months of the year 2011 that expired on 30 June 2011.

Main data about the issuer $2.$

Name of issuer Public limited liability company Panevėžio statybos
trestas
Authorized capital 16,350,000 Litas
Address of registered office P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania
Telephone $(+37045)$ 505 503
Fax $(+37045)505520$
E-mail [email protected]
Legal-organization form Public limited liability company
Registration date and place 30 October 1993, Panevėžys City Department
Registration No. AB 9376
Code at the register of enterprises 147732969
VAT code LT477329610
Administrator of legal entity register State Enterprise Centre of Registers
Web address www.pst.lt

$3.$ Character of the main activity of the issuer

The main area of activity of the Company and its subsidiaries (the Group) is designing and construction of buildings, constructions, installations and communications of various purposes both in and outside Lithuania, real estate development. In addition to the mentioned activities, the Company rents premises and machinery.

4. Information on the Company Group

As of 30 June 2011 the Company Group of Panevėžio statybos trestas AB consists of the following companies:

Subsidiaries Type of activities Share
controlled
(per cent)
Registered address
Skydmedis UAB Production of wood
constructions
100 Pramonės Str. 5,
Panevėžys
Tel.: +370 45 583341
Metalo meistrai UAB Production of metal
constructions
100 Tinklų Str. 7,
Panevėžys,
Tel. 8 45 464677
Vekada UAB Electrical installation works 96 Marijonų Str. 36,
Panevėžys
Tel.: +370 45 461311
Vilniaus papėdė TŪB Construction works 69 Švitrigailos Str. 8,
Vilnius
Tel.: +370 5 2609405
Alinita UAB Ventilation and condition
systems in buildings
100 Dubysos Str. 31,
Klaipėda
Tel.: +370 46 340363
KINGSBUD Sp.zo.o. Wholesale in construction
materials
100 A.Patli 16-400 Suwalki,
Poland
PS TRESTS SIA Construction 100 VIETALVAS STR. 5,
RIGA
BALTILSTROIJ OOO Construction 100 Sovetskij Ave. 43,
Kaliningrad
Tel.: 0074012350435
PST Investicijos UAB Real estate development 68 Konstitucijos Ave. 7,
Vilnius
Tel.:+370 5 2728213
Subsidiaries of PST investicijos UAB:
Ateities projektai UAB Real estate development and
sales
100 Lvovo Str. 25, Vilnius
Šeškinės projektai UAB Real estate development and
sales
100 Lvovo Str. 25, Vilnius
Sakališkės UAB Real estate development and
sales
100 Lvovo Str. 25, Vilnius
Kauno erdvė UAB Real estate development and
sales
100 Lvovo Str. 25, Vilnius
Verkių projektas UAB Real estate development and
sales
100 Lvovo Str. 25, Vilnius
ISK Baltevromarket ZAO Construction investment
company
100 Chernyakhovsk Str. 6,
Kaliningrad

5. Contracts with intermediaries in security public circulation

On 7 February 2006 the contract No.3792 was signed with the public limited liability company NORD/LB bankas located at Basanavičiaus Str. 26 in Vilnius. This company was authorized to perform accounting of securities issued and transferred to it, and management of personal security accounts.

6. Data on trade in the securities of the issuer at the regulated markets

The ordinary registered shares of Panevėžio statybos trestas AB, 16,350,000 pcs., the par value of each being one Litas, have been included in the official list of the Vilnius Stock Exchange (VSE) since 13 July 2006.

Share type Number of shares Par value Total par value Emission
(pcs.) (Litas) (Litas) code
Ordinary registered shares
(ORS)
16,350,000 16,350,000 101446

Variation in the price of the company shares at the Stock Exchange for the first half of 2011 $(EUR)$

Last price Highest price Lowest price Last price
31 Dec. 2010 for the first half for the first half 30 June 2011
6.73 Lt 7.66 Lt 5.59 Lt 6.25 Lt

7. Authorized capital of the company and its structure

As of 30 June 2011, the authorized capital of the Company was 16,350,000 Litas, it was divided into 16,350,000 ordinary registered shares (hereinafter referred to as ORS), the par value of one share being 1.00 Litas. All shares are intangible and fully paid. The property right for the shares is proved by the record in the stock accounts. The shares of Panevėžio statybos trestas AB are traded at the Vilnius Stock Exchange. On 30 June 2011 the total number of the shareholders who under the ownership right held or controlled more than 5 percents of the authorized capital of the Company was 2552:

Name, surname of a shareholder
(company name, type, headquarter
address, company code)
Number of ordinary
registered shares held
by a shareholder under
ownership right (pcs.)
Share of the
authorized
capital held
(%)
Portion of
votes granted
by the shares
held under
the
ownership
right $(\% )$
Portion of
votes owned
by the
shareholder
along with
acting
persons $(\% )$
Panevėžio keliai AB
S. Kerbedžio Str. 7, Panevėžys,
Company code: 147710353
8,138,932 49.78 49.78
Skandinaviska Enskilda Banken clients
Sergels Torg 2, Stockholm, Sweden
502032908101
971,462 5.94 5.99
Bank of New York as custodian or
trustee for ING B
One Wall Street, New York,
NY 10286, USA GSP181305
1,040,000 6.36 6.36
Freely negotiable shares 6 199 606 37,92 37,92

6

The Company has not purchased its own shares, any of its subsidiaries has not purchased any shares of the Company and no other person who would act in his/her own name but in the favor and using the means of the Company, has purchased any shares of the Company.

8. Information on the performance results of the issuer

Referring to the unaudited data, during the first half of 2011 the Company Group of Panevezio statybos trestas AB was on the income of 99.3 mln. Litas, that is by 17.5 percents more than the same period last year when the income of the Company Group amounted 84.5 mln. Litas. The first half of the year 2011 was loss-making for the group. The before tax loss amounted 1,78 mln. Litas for the six months of the year.

Referring to the unaudited data, during the first half of 2011 Panevėžio statybos trestas AB was on the income of 70.4 mln. Litas, that is by 3.3 percents less than the first half last year. The Company was on the before tax loss of 0.532 mln. Litas.

The first half of the year 2011 was not successful. Due to rise of construction prices in 2009 and 2010, in the first half of 2011 the company had additional costs related to completion of projects financed from the EU funds because current construction prices differ from the ones that had been used in the tender when contracts were awarded. Furthermore, the following additional expenses incurred by the Company had effect on the negative result:

when participating in tenders both in private and public sectors due to tender postponements, claims, suspension of awarded contracts in case of absence of financing;

due to request of excess security measures (bonds) by purchasing organizations (customers), payment terms unfavorable to the company.

Maintenance of the real estate development company contributed to increase of the loss incurred by the group though it had no income during the first half of 2011.

The performance results of Panevėžio statybos trestas AB Group and the Company are as follows (in thousands Lt):

Group Company
I half of
2009
I half of
2010
I half of
2011
I half of
2009
I half of
2010
I half of
2011
Income 107.621 84.518 99.278 94.797 72.803 70.386
Gross profit 15.280 13.861 6.009 14.413 10.645 3.296
Gross profit margin (per
cent)
14.2 16,4 6,05 15,2 14,62 4,68
Net profit $-2.388$ 18.711 $-2,233$ 2.142 7.792 $-734$
Nets profit margin (per
cent)
$-2,2$ 22,14 $-2,25$ 2,3 10,7 $-1,04$
Profit per share (Litas) $-0,05$ 0,94 $-0,11$ 0,13 0,48 $-0,04$
Profit before taxes,
interest, depreciation and
amortization EBITDA
5403 24430 1595 7613 11834 2258
EBITDA margin (per cent) 5,02 28,91 1,61 8.03 16,25 3, 21
Return on equity (percents)
(ROE)
$-2,15$ 16,26 $-2,00$ 1,75 5,93 $-0,56$
Return on assets or asset
profitability $(ROA)$
$-0,98$ 9,52 $-1,01$ 1,1 4,21 $-0,35$
Return on investments (ROI) $-1,77$ 13,26 $-1,82$ 1.63 5,68 $-0.55$
Current liquidity ratio 1,88 2,99 1,88 2,14 2,5 1,85
Current liquidity ratio 1,32 2,28 1,43 2,07 2,41 1,75
General liquidity ratio 0,85 1,46 1,07 1,8 2,45 1,69
Asset to equity ratio 0,45 0.59 0.51 0.63 0,71 0,63
Book value per share 6,99 7,2 6,82 7,47 8,04 7,99
Ratio of share price and
book value $(P/BV)$
0,32 0,54 0,92 0,3 0.47 0,78

Income and net profit variation for the Company:

$\overline{7}$

Information on segments

No segment reporting is provided in the financial statements as the Company and Group have one reportable operating segment that would account for 90% or more of the Company and Group income and assets.

Geographical distribution of income (thousands Lt):

Group Company
(thousands Lt) half of
2009
half of
2010
I half of
2011
half of
2009
I half of
2010
half of
2011
Lithuania 104,55 79,30 60,69 91,86 68,77 58,60
Russian Federation 2,93 4,04 32,98 2,93 4.04 8,89
United Kingdom 0.00 0.00 2,59 0,00 0,00 2,59
Scandinavian countries 0,14 1,02 1,34
Other countries 0,00 0, 16 1,68

Geographical distribution of income (percents):

9. Essential events having taken place during the first six financial months of the year

On 31 March 2011 Panevėžio statybos trestas AB signed the contract with Akmenės cementas AB for the construction of a new production line. The estimated value of this Project is approximately 150 mln. Litas.

10. Employees

During the first half of 2011, the average number of employees in Panevėžio statybos trestas AB Group was 1202, whereas in the Company $-970$ employees.

Number of I half of 2010 I half of 2011
employees on payroll Group Company Group Company
Management 30 32
Specialists 263 210 283 223
Workers 749 639 778

Employee grouping by education in Panevėžio statybos trestas AB Group:

Groups of
employees
Payroll
number
Higher
university
level
education
Higher non-
university
education
Community
college
education
Secondary
education
Incomplete
secondary
education
Management 32 28 0
Specialists 295 212 10 56 16
Workers 875 19 18 145 542 151
I half of 2010 I half of 2011
Average salary/wage Group Company Group Company
Management 6481 9527 5208 6323
Specialists 3266 3511 2809 2943
Workers 619 1666 1832 1869

Average gross wages:

Employment agreements do not include any specific rights and obligations for employees or a part thereof.

11. Procedure for amendment of the Articles of Association of the issuer

The Articles of Association of the Company may be amended only by the General Meeting of the Shareholders by the qualified majority of votes that may not be less than 2/3 of all votes conferred by the shares held by the shareholders attending the meeting. The decision of the General Meeting of the shareholders regarding the amendment of the Articles of Association shall be adopted in accordance with the procedure set forth in Article 27 or 30 of the Law on Companies of the Republic of Lithuania.

12. Bodies of the issuer

Referring to the Articles of Association of Panevėžio statybos trestas AB, the management bodies of the Company are the General Meeting of the Shareholders, the Board and the Managing Director. No Supervisory Board is formed in the company.

The power of the General Meeting of the Shareholders has no difference from the power of the General Meeting of the Shareholders set forth by the Law on Companies.

The Board of the Company consisting of five persons is elected by the General Meeting of the Shareholders for a period not longer than 4 years. At present the Board of the company consists of four members. The procedure for election and withdrawal of a member of the Board has no difference from the procedure set forth by the Law on Companies.

The activities of the Board are managed by the Chairman of the Board. The Chairman of the Board is elected by the Board from the members of the Board.

The Board elects and removes from the office the manager of the Company $-$ the Managing Director, fixes his salary, sets other terms of the employment contract, approves his job description, gives incentives and imposes penalties.

The manager of the company is a single-person management body of the Company who organizes the current economic activities based on the authority granted.

The Board:

REMIGIJUS JUODVIRŠIS – the Chairman of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME CAPACITY NUMBER
OF
SHARES
CAPITAL,% VOTES,
$^{0}/_{0}$
TERTIUS UAB 704,638 80 80
PANEVĖŽIO KELIAI AB Member of the Board 531,675 28.47 28.47
LAUKTUVĖS JUMS UAB Member of the Board 11,069 50.15 50.15
POKŠTAS UAB 261 50 50
KLOVAINIU SKALDA AB 203,526 3.78 3.78
GELBERA UAB Member of the Board 34 34 34
KELTECHA UAB Member of the Board
EMULTEKA UAB 14 14.0 14.0
GUSTONIŲ ŽŪT UAB Member of the Board 18,027 49.04 49.04
SPECIALIZUOTA KOMPLEKTAVIMO
VALDYBA AB 21,490 9.29 9.29
IGNALINOS STATYBA UAB Member of the Board 91,351 37.93 37.93
NAUJASIS UŽUPIS UAB Chairman of the Board
PANEVĖŽYS UAB Member of the Board 157,191 49.98 49.98
PANEVĖŽIO STATYBOS Chairman of the Board $\Omega$ $\Omega$ $\Omega$
TRESTAS AB
PANODEN UAB Member of the Board
PST INVESTICIJOS UAB Member of the Board 16,407 4.4 4.4
KIRTIMŲ AUTOTRANSPORTAS AB Member of the Board
CONVESTUS UAB Vice-President, 50,000 50 50
Chairman of the Board
ALPROKA UAB Chairman of the Board
KAUNO TILTAI UAB 492 0.31 0.31

Term of office: November 2010 through November 2014

No previous convictions.

GVIDAS DROBUŽAS – the Member of the Board member. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME CAPACITY NUMBER
OF
SHARES
CAPITAL,
$\frac{0}{n}$
VOTES, %
PANEVĖŽIO KELIAI AB Chairman of the Board 529,861 28.33 28.33
LAUKTUVĖS JUMS UAB Member of the Board 11,001 49.85 49.85
POKŠTAS UAB Director 261 50.0 50.0
KLOVAINIU SKALDA AB 203,129 3.77 3.77
GELBERA UAB Member of the Board 34 34 34
EMULTEKA UAB 12 12.0 12.0
GUSTONIŲ ŽŪT UAB Member of the Board 18,028 49.04 49.04
IGNALINOS STATYBA UAB
PANEVĖŽIO STATYBOS
TRESTAS AB
Member of the Board
PANEVĖŽYS UAB Member of the Board 157,225 49.98 49.98
SPECIALIZUOTA
KOMPLEKTAVIMO VALDYBA
AB
21,470 9.28 9.28
PST INVESTICLIOS UAB Chairman of the Board,
Director
12,644 2.9 2.9
NAUJASIS UŽUPIS UAB Member of the Board
CONVESTUS UAB President,
Member of the Board
50,000 50 50
ALPROKA UAB Member of the Board
KAUNO TILTAI UAB 492 0.31 0.31
MEINORA UAB Director 100 100 100
SERANA U AB Director 100 100 100

Term of office: November 2010 through November 2014

No previous convictions

IRMA ABRAMAVIČIENĖ - the Member of the Board. Membership in the capital of the company below:

COMPANY NAME CAPACITY NUMBER
OF SHARES
CAPITAL,% VOTES, %
CONVESTUS UAB Internal auditor $\overline{\phantom{a}}$ -

Terms of office: November 2010 through November 2014

No previous convictions

VILIUS GRAŽYS - the Member of the Board. No membership in the capital of the company. Membership in the activities or capital of the companies below:

COMPANY NAME CAPACITY NUMBER OF
SHARES
CAPITAL,% VOTES, %
AKVALDA UAB 500 33.33 33.33
EMULTEKA UAB
BASS UAB 40 40 40
PANEVEZIO STATYBOS TRESTAS AB Member of the Board
PANEVĖŽIO KELIAI AB Member of the Board 101.735 5.45 5.45

Terms of office: November 2010 through November 2014

No previous convictions

ARTŪRAS BUČAS – the Member of the Board. No membership in the capital of the company.

COMPANY NAME CAPACITY NUMBER OF
SHARES
CAPITAL,% VOTES, %
DVARČIONIŲ KERAMIKA AB Shareholder 356 0.0036 0.0036
PANEVĖŽIO KELIAI AB Member of the Board

Terms of office: November 2010 through November 2014

No previous convictions

Administration:

DALIUS GESEVIČIUS - Head of the Company Administration, Managing Director. Holds 15 shares of the company. University education (1984, Vilnius Civil Engineering Institute), construction engineer. No previous convictions.

DANGUOLĖ ŠIRVINSKIENĖ – Chief Accountant of the Company. Holds no shares of the company. University education (1983, Lithuanian Agricultural Academy), qualification of accountant-economist. No previous convictions.

Audit committee:

Following Article 52 of the Law on Audit of the Republic of Lithuania, the General Meeting of Shareholders of Panevėžio statybos trestas AB elects the audit committee. The audit committee consists of three members one of them being independent. The term of office of the audit committee is one year. The continuous term of office of a committee member cannot exceed 12 years.

The following members make the audit committee at Panevėžio statybos trestas AB - Roma Morozovienė (Panevėžio statybos trestas AB), Regina Sukarevičienė (Panevėžio statybos trestas AB) and Irena Kriaučiūnienė – an independent auditor.

13. Information announced in public

Since the beginning of the year 2010 up to the day of this report presentation the Company announced the following information in public through the system of OMX Client News Service:

Title of announcement Category of announcement Language Date
Panevėžio statybos trestas AB to Expand
Activities in Kaliningrad Area
Notification on material event Lt, En 9 Aug. 2011
Performance Results for the First Quarter of
2011
Interim information Lt, En 27 May 2011
The Ordinary General Meeting Approved
2010 Annual Information
Annual information $Lt$ , En 22 April 2011
Resolutions of the Annual General Meeting
of the Shareholders
Notification on material event Lt, En 22 April 2011
Resolutions of the Annual General Meeting
of the Shareholders
Notification on material event Lt, En 07 April 2011
Resolutions of the Annual General Meeting
of the Shareholders
Notification on material event Lt. En 01 April 2011
Panevėžio statybos trestas AB signed the
contract with Akmenès cementas AB
Notification on material event Lt, En 31 March 2011
Convening of the Annual General Meeting
of the Shareholders
Notification on material event Lt, En 22 March 2011
Performance Results for 2010 Interim information Lt, En 23 Feb. 2011

The content of the above listed announcements may be found on the website of the Vilnius Stock

Exchange

http://www.baltic.omxgroup.com/market/?currency=0&pg=details&instrument=LT0000101446&list=2 and on the Company website http://www.pst.lt

14. Information on compliance with the Governance Code

The Company complies with the procedure of company management set forth by the Law on Companies of the Republic of Lithuania. The Company partially complies with the Governance Code applicable to the companies that are on the list of the Vilnius Stock Exchange. In accordance with the Articles of Association of the Company the bodies of the Company are the General Meeting of the Shareholders, the Board and the Managing Directors. No Supervisory Board is formed in the Company. The annual report of the Company will include the more detailed explanation of how the Company complies with the recommendations of the Governance Code.

15. Financial statements

BALANCE SHEET

In Litas Company
ASSETS 30 June 2011 31 Dec. 2010
Non-current assets 71,780,162 75,247,542
Intangible assets 13,926 25,287
Tangible non-current assets 22,062,199 23,967,094
Investment and amounts receivable in one
year
49,181,680 50,653,326
Deferred tax assets 522,357 601.835
Current assets 136,210,788 111,336,306
Inventories 7,626,959 2,232,619
Advance payments 8,550,391 856,186
Amounts receivable 55,916,305 36,184,693
Other current assets 15,741,094 31,215,288
Cash and cash equivalents 48,376,039 40,847,520
TOTAL ASSETS 207,990.950 186,583,848
In Litas Company
EQUITY AND LIABILITIES 30 June 2011 31 Dec. 2010
Equity 130,709,695 132,588,076
Share capital 16,350,000 16,350,000
Reserves 10,404,040 10,754,627
Retained profit (loss) 103,955,655 105.483,449
Translation reserve
Minority share
Amounts payable and liabilities 77,281,255 53,995,772
Amounts payable in one year and long
term liabilities
3,849,763 4,436,922
Loans and borrowings 1,806,623 2,095,887
Warranty provision 486,387 731,694
Deferred tax liabilities 1,556,753 1,609,341
Amounts payable in one year and short
term liabilities 73,431,492 49,558,850
Loans and borrowings 1,291,374 2,185,392
Trade payables 29,774,900 18,826,212
Prepayments received 31,067,898 14,107,720
Current tax payable 33,128
Other liabilities 11,264,192 14,439,526
TOTAL EQUITY AND LIABILITIES: 207,990,950 186,583,848

BALANCE SHEET

In Litas Group
ASSETS 30 June 2011 31 Dec. 2010
Non-current assets 37,272,464 39,177,628
Intangible assets 131,750 144,049
Tangible non-current assets 24,942,125 26,981,910
Other investment and amounts receivable
in one year
10,336,817 10,109,516
Other intangible assets 1,861,772 1,942,153
Current assets 183,353,455 159,597,741
Inventories 43,429,218 38,006,600
Advance payments 10,135,566 3,524,674
Amounts receivable 66,364,263 37,760,979
Other assets 8,840,622 31,145,798
Cash and cash equivalents 54, 583, 786 49,159,690
TOTAL ASSETS: 220,625,919 198,775,369
In Litas Group
EQUITY AND LIABILITIES 30 06 2011 31 Dec. 2010
Equity 111,541,077 114,038,887
Share capital 16,350,000 16,350,000
Reserves 11,426,759 11,804,420
Retained profit (loss) 82,910,638 85,449,807
Translation reserve 853,680 434,660
Minority share 4,359,764 4,820,707
Amounts payable and liabilities 104,725,078 79,915,775
Amounts payable in one year and long
term liabilities
6,798,046 20,546,478
Loans and borrowings 3,192,548 16,645,051
Provisions 1,453,912 1,710,734
Deferred tax liabilities 1,679,434 1,732,022
Grants and subsidies 49,088 52,913
Other payable amounts 423,064 405,758
Amounts payable in one year and short
term liabilities
97,927,032 59,369,297
Loans and borrowings 14,920,897 2,396,801
Trade payables 35,798,592 22,310,164
Prepayments received 31,900,666 16,995,547
Current tax payable 58,289 135,017
Other liabilities 15,248,588 17,531,768
TOTAL EQUITY AND LIABILITIES: 220,625,919 198,775,369
In Litas Company
ITEM Jan.
through
June 2011
Jan.
through
June 2010
April
through
June 2011
April
through
June 2010
SALE 70,386,095 72,803,369 42,463,340 52,570,759
COST OF SALE 67,090,226 62,158,308 42,624,575 43,949,228
GROSS PROFIT (LOSS) 3,295,869 10,645,061 $-161,235$ 8,621,531
OPERATING EXPENSES 4,190,061 3,599,819 1,304,737 1,092,023
Sale 159,519 134,832 79,309 77,449
Recovery of doubtful debts $-1,717,080$ $-3,561,827$ $-1,534,551$ $-3,039,633$
General and administration 5,747,622 7,026,814 2,759,979 4,054,207
TYPICAL OPERATING PROFIT (LOSS) $-894,192$ 7,045,242 $-1,465,972$ 7,529,508
OTHER ACTIVITIES $-32,579$ $-25,399$ 46,354 17,735
Income 505,922 330,808 248,931 177,783
Expenses 538,501 356,207 202,577 160,048
FINANCIAL AND INVESTMENT
ACTIVITIES
394,439 1,615,273 80,989 484,537
Income 656,095 1,879,476 261,820 591,665
Expenses 261,656 264,203 180,831 107,128
USUAL ACTIVITY PROFIT (LOSS) $-532,332$ 8,635,116 $-1,338,629$ 8,031,780
WINDFALL PROFIT
LOSSES
PROFIT (LOSS) BEFORE TAXATION $-532,332$ 8,635,116 $-1,338,629$ 8,031,780
PROFIT TAX 201,549 843,293 43,062 712,712
NET PROFIT (LOSS) $-733,881$ 7,791,823 $-1,381,691$ 7,319,068

PROFIT (LOSS) STATEMENT

In Litas Group
ITEM Jan.
through
June 2011
Jan.
through
June 2010
April
through
June 2011
April
through
June 2010
SALE 99,278,035 84,517,797 58.534.251 58,368,146
COST OF SALE 93,269,119 70,656,301 57.883.438 47,884,650
GROSS PROFIT (LOSS) 6,008,916 13,861,496 650.813 10,483,496
OPERATING EXPENSES 7,330,315 6,706,186 2.927.893 2,704,445
Sale 323,461 227,003 170.698 151,950
Recovery of doubtful debts $-1,717,080$ $-3,561,827$ $-1.534.551$ $-3,039,633$
General and administration 8,723,934 10,041,010 4.291.746 5,592,128
TYPICAL OPERATING PROFIT (LOSS) $-1,321,399$ 7,155,310 $-2.277.080$ 7,779,051
OTHER ACTIVITIES $-243,700$ $-278,434$ $-121.307$ $-107,905$
Income 362,824 191,819 112.981 92,522
Expenses 606,524 470,253 234.288 200,427
FINANCIAL AND INVESTMENT
ACTIVITIES
$-217,106$ 12,966,426 $-433.951$ 11,358,159
Income from other financial activities 269,113 4,133,847 $-118.900$ 1,471,507
Profit due to loss of company control $\boldsymbol{0}$ 10,005,556 $\Omega$ 10,005,556
Other financial expenses 486,219 1,172,977 315.051 118,904
USUAL ACTIVITY PROFIT (LOSS) $-1,782,205$ 19,843,302 $-2.832.338$ 19,029,305
WINDFALL PROFIT
LOSSES
PROFIT (LOSS) BEFORE TAXATION $-1,782,205$ 19,843,302 $-2.832.338$ 19,029,305
PROFIT TAX 451,068 1,132,836 177.635 1,272,885
NET PROFIT (LOSS) $-2,233,273$ 18,710,466 $-3.009.973$ 17,756,420
ATTRIBUTABLE TO SHAREHOLDERS $-1,772,329$ 15,389,429 $-2.769.625$ $-967,900$
ATTRIBUTABLE TO MINORITY
INTEREST
$-460,944$ 3,321,037 $-240.348$ 18,724,320

CASH FLOW STATEMENT

Company
Jan. through
June 2011
Jan. through
June 2010
Cash flow from operating activities
Net profit (loss) $-733,881$ 7,791,823
Depreciation and amortization costs 2,589,614 2,976,048
Profit (loss) from transfer of non-current assets $-127,429$ $-116,192$
Income tax expense 201,549 843,293
1,929,853 11,494,972
Change in inventories $-5,394,340$ 204,398
Change in amounts receivable $-19,731,610$ $-7,816,739$
Change in prepayments $-7,694,205$ 2,797,611
Change in amounts receivable after one year $-98.719$ $-92,475$
Change in other assets 23,875,549 $-8,289,335$
Change in trade payables 10,948,688 9,455,480
Change in prepayments received 16,960,178 $-11,027,041$
Change in provisions and other liabilities $-3,812,985$ $-2,543,638$
16,982,409 $-5,816,767$
Income tax paid $-1,270,197$ $-998,152$
Net cash from operating activities 15,712,212 $-6,814,919$
Cash flow from investing activities
Acquisition of long term assets (excl, investment) $-690,833$ $-403,093$
Transfer of long term assets (excl, investment) 144,904 189,280
Acquisition of investments
Loans issued $-10,688,504$ $-5,318,070$
Loans recovered 4,908,445
Dividends and interest received 655,771 738,280
Net cash used in investing activities $-5,670,217$ $-4,793,603$
Cash flow from financial activities
Dividends, share of profit paid $-1,129,922$ $-2,249,465$
Proceeds from loans and borrowings
Repayments from loans and borrowings
Payment of finance lease liabilities $-1,183,282$ $-1,519,467$
Interest paid $-200,272$ $-223,162$
Net cash from (used in) financing activities $-2,513,476$ $-3,992,094$
Increase (decrease) in net cash flow 7,528,519 $-15,600,616$
Cash and its equivalent at the beginning of the
period 40,847,520 53,934,684
Cash and its equivalent at the end of the period 48.376.039 38.334.068

CASH FLOW STATEMENT

Group
Jan.
through
June 2011
Jan.
through
June 2010
Cash flow from operating activities
Net profit (loss) $-2,233,273$ 18,710,466
Elimination of other non-monetary items
Depreciation and amortization costs 2,994,431 3.448,773
Other non-monetary items $-100,225$ $-32,172$
660,933 22,127,067
Change in inventories $-5,422,618$ $-3,299,408$
Change in amounts receivable $-28,603,284$ $-10,778,950$
Change in prepayments $-6,610,892$ 3,694,762
Change in other assets 23,441,335 $-8,813,691$
Change in trade payables 13,488,428 8,858,617
Change in prepayments received 14,905,119 $-10,887,384$
Change in provisions and other liabilities $-2,617,827$ $-750,737$
9,241,194 150,276
Elimination of results from financial and investing
activities 536,529 $-10,056,701$
Net cash from operating activities 9,777,723 $-9,906,425$
Cash flow from investing activities
Acquisition of non-current assets (except
investments) $-827,594$ $-435,608$
Transfer of non-current assets (except investments) 10,413 43,994
Loans issued $-2,575,380$
Loans recovered 1,211,920
Dividends and interest received 268,196 696,858
Net cash used in investing activities $-1,912,445$ 305,244
Cash flow from financial activities
Dividends and share of profit paid $-1,129,922$ $-2,249,465$
Proceeds from loans and borrowings
Repayments from loans and borrowings
363,495
Payment of finance lease liabilities $-1,291,902$ $-1,687,269$
Interest paid $-382,853$ $-1,136,572$
Net cash from (used in) financing activities $-2,441,182$ $-5,073,306$
Increase (decrease) in net cash flow 5,424,096 $-14,674,487$
Cash and cash equivalent in the beginning of the
period 49,159,690 56,139,567
Cash and cash equivalent at the end of the
period 54,583,786 41,465,080

STATEMENT OF CHANGES IN EQUITY

$Company$

Authorized
capital
revaluation
FA
reserve
Legal
Deferred
result
Total
Inrecognized profit (loss) for 2010
Salance as of 31 December 2009
beferred tax related liability
cevaluation of fixed assets
Net profit (loss) for 2010
Dividend
16,350,000 $-350,586$
9.715,594
1,635,030 97,031,157
350,586
$-1,144,500$
7,791,823
$-1,144,500$
7,791,823
124,731,781
beferred profit tax related to reappraisal of FA
ncrease (decrease) of authorized capital
ncrease (decrease) of authorized capital
Inrecognized net profit (loss) for 2011
salance as of 31 December 2010
elated postponed tax liability.
3alance as of 30 June 2010
levaluation of fixed assets
let profit (loss) for 2011
teserves formed
cserves used
Jividend
16,350,000
16,350,000
9,365,008
9,119,597
$-350.587$
1,635,030
1,635,030
104,029,066
105,483,449
350,587
$-1,144,500$
$-733,881$
131,379,104
132,588,076
$-1,144,500$
$-733,881$
$\lambda$ alance as of 30 June 2011 16.350.000 8.769.010 1.635.030 103.955.655 130.709.695
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גו
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n Financia
こうしゅ つくさん
$\alpha$ eramina

Group

Authorized
capital
Revaluation
reserve
reserve
Legal
Influence of
change in
exchange
rate
Accumulated
profit
Losses per
company
parent
share
Minority
part
Total
Decrease in revaluation reserve
Balance as of 1 January 2010
16,350,000 $-388,782$
10,445,141
2,019,981 810,470 388,785
71,488,724
101,114,316 $-670,604$ 100,443,712
Net profit (loss) for 2010
Currency rate change
Oeferred tax liability
Dividend
$-270,641$ 15,389,429
$-1,144,500$
15,389,429
$-1,144,500$
$-270,641$
$-61,106$
3,305,187
18,694,616
$-1,144,500$
$-331,747$
Reserves formed 231 $-231$
Balance as of 31 December 2010
Decrease in revaluation reserve
Balance as of 30 June 2010
16,350,000
16,350,000
9,784,208
10,056,359
$-388.785$
2,020,212
2,020,212
539,829
434,660
86,122,207
85,449,807
388,784
115,088,607
114,038,887
2,573,477
4,820,707
117,662,084
118,859,594
Net profit (loss) for 2011
Deferred tax liability
Jividend
$-1,772,329$
$-1,144,500$
$-1,772,329$
$-1,144,500$
$-460.944$ $-1,144,500$
$-2,233,273$
nfluence of currency rate change
Company transfer
Reserves formed
11,124 422,046 $-11,124$ 422,046 422,046
Balance as of 30 June 2011 16,350,000 9,395,423 2,031,336 853,680 82,910,638 111,541,077 4,359,764 115,900,841

EXPLANATORY NOTE

General Information

Panevėžio statybos trestas AB (hereinafter "the Company") was established in 1957 and for a long tome was known as the North Lithuania Construction Trust (Siaures Lietuvos statybos trestas). In 1991 the Company was registered as a State Capital Company. On 30 October 1993 the State Capital Company was reorganized to a Public Limited Liability Company. Company code 147732969, VAT code LT477329610. Registration certificate No. 013732, issued on 27 September 2004 by the State Register Centre Panevėžys Branch.

The Company comprises the following branches: Gerbusta, Pastaty apdaila, Genranga and Klaipstata. These subsidiaries keep separate records, but their assets, liabilities and financial results are included when preparing financial accountability of the Company. The Company has its representative offices in Cherepovets, a subsidiary in Kaliningrad and a permanent establishment in the United Kingdom of Great Britain and Northern Ireland. Financial year of the Company is calendar year. The period of commercialeconomic activities of the Company is unlimited.

The main activity of the Company and its subsidiaries (hereinafter "the Group") is designing and construction of various buildings, structures, facilities, communications and other similar objects in Lithuania and abroad, real estate development. In addition to the listed activities the Company rents out premises and equipment, resells utility and communication services.

Basis of interim financial statement preparation

The figures in the interim financial statement are presented in the national currency of Lithuania, Litas, which is also the Company's functional currency.

The same accounting principles were applicable to both - the interim financial statement and to the annual financial statement.

The following currency rates were used when preparing the interim financial statement:

Currency 30 June 2011 31 Dec. 2010
1 FUR 3.4528 3.4528
10 RTUB 0.8546 0.8554
$1$ LV 4.8703 4.8643
1PLN 0.8624 0.8716
1 GBP 3.8429 4.0494

Principles of consolidation

Subsidiary companies are the companies controlled by the parent company. Such control is defined as a capability to a company to have determinant effect on other company, manage and influence financial and economic activities to get benefit from that company. For the purposes of control assessment the total available number of shareholders' votes at the General Meeting of Shareholders is considered. The financial statements of subsidiary companies are included into the Consolidated Financial Statement from the day of control gain and are excluded from the day of control loss. During consolidation of financial statement the income and expenses, amounts receivable and payable and unrealized results of the Company Group are eliminated.

Investment in non-current assets

During the first half of 2011 the investments of the Group in acquisition of non-current assets amounted to 827,594 Litas: Panevėžio statybos trestas AB acquired non-current assets for 690,833 Litas. During the year 2011 the costs related to depreciation and amortization of assets of the Group amounted to 2,994,431 Litas. including 2,589,614 Litas accounted for in the Financial Statement of Panevėžio statybos trestas AB.

Loans

As of 30 June 2011 the loans of the Company Group of PST investicijos UAB amounted to 14,623,654 Litas including short-term bank credits totaling 13,526,734 Litas. For using credits SEB AB is paid the interest rate 1 month VILIBOR $+$ 1.1%, for other loans the interest rate is 3 months VILIBOR and the interest margin is 1.9%.

Guarantees, sureties

As of 30 June 2011 the guarantees of the liabilities of Panevėžio statybos trestas AB issued by credit institutions amounted to 26,813,412 Litas, 25,504,712 Litas of which cover performance bonds.

On 29 April 2011 an Agreement of Financial Liability Limit was signed with DnB Nord bankas. On the basis of this agreement the Performance Bond for the amount of 14,708,193 Litas has been issued to Akmenės cementas AB.

Transactions with associated parties

As per resolution adopted by the Board of Panevėžio statybos trestas AB on 20 July 2009, the time limit for Panevėžio keliai AB to repay the loan in the amount of 10 mln. Litas was extended until 11 January 2013.

As per resolution adopted by the Board of Panevėžio statybos trestas AB on 30 March 2010, PST investicijos UAB had been given a loan amounting 8,235,491 mln. Litas for financing of the projects under development by the subsidiary companies of PST investicijos UAB. The time limit for the loan repayment is 31 March 2012.

On 22 July 2011 the Board of of Panevėžio statybos trestas AB decided to give the loan to PST investiciios UAB in the amount of 3,000,000 Litas for financing of the project under development of Verkiu projektas UAB. The time limit for the loan repayment is 1 September 2014.

Dividends

The Annual General Meeting of the Shareholders of Panevėžio statybos trestas AB that took place on 22 April 2011 made the decision to pay dividends in the amount of 1,144,500 Litas (0.07 Litas per share) and the share of profit in the amount of 2,000,000 Litas. By 30 June 2011 dividends amounting 1,109,899 Litas were paid. As of 31 August 2011, no payment of the share of profit was made.

Significant changes in the interim financial statement during the reporting period

During the first half of 2011the group incurred the loss amounting 2.2 mln. Litas, whereas during the first half of 2010 made profit in the amount of 18.7 mln. Litas. Due to rise of construction prices in 2009 and 2010, this year the parent company earned a relatively low gross profit margin of 4.68 % as it was in the process of earlier contract award finalization and had additional construction costs. On the other hand profit amounting 10 mln. Litas in 2010 is attributable to loss of control in the companies of PST investicijos UAB - Gelužės projektai UAB ir Smiltynų kalvos UAB.

Due to payment terms agreed with the customers that were unfavourable to the company, there was increase in trade receivables and at the same time trade payables.

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