Panevezio Statybos Trestas

Quarterly Report • May 17, 2010

PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated and Company Financial Statements for Three Months Ending 31 March 2010

Unaudited

Company register given code 147732969 Address of registered office P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania

STATEMENT OF EXECUTIVE OFFICERS OF THE COMPANY

Hereby we confirm that on the basis of the information available to us, the Consolidated Interim Financial Statement for Three Months of 2010 made in accordance with the International Financial Reporting Standards is true and shows the assets, liabilities, financial state, and profit or loss of Panevėžio statybos trestas AB and companies of Panevėžio statybos trestas Company Group in a correct manner.

D. Seshing

Dalius Gesevičius, Managing Director Panevėžio statybos trestas AB

Dereces

Dalė Bernotaitienė, Finance Director Panevėžio statybos trestas AB

BALANCE SHEET

In Litas	Company
ASSETS	31 Mar. 2010	2009
Non-current assets	72239403	73650975
Intangible assets	59040	80009
Tangible non-current assets	27336336	28832083
Financial assets	44616954	44393475
Other intangible assets	227073	345408
Current assets	98045901	110829276
Inventories	4907603	4418046
Advance payments	2065374	4198396
Accounts receivable in one year	35101166	47623506
Other current assets	12419536	654644
Cash and cash equivalents	43552222	53934684
TOTAL ASSETS	170285304	184480251

In Litas	Company
EQUITY AND LIABILITIES	31 Mar. 2010	2009
Equity	125204536	124731781
Share capital	16350000	16350000
Reserves	11175331	11350624
Retained profit (loss)	97679205	97031157
Translation reserve
Minority share
Amounts payable and liabilities	45080768	59748470
Amounts payable in one year and
long term liabilities	6395499	7328058
Loans and borrowings	3717870	4323901
Warranty provision	989406	1289640
Deferred tax liabilities	1688223	1714517
Other payable amounts
Amounts payable in one year and
short term liabilities	38685269	52420412
Loans and borrowings	2491208	2760113
Trade payables	12050275	17967020
Prepayments received	14877887	17798652
Current tax payable	39007	126597
Other liabilities	9226892	13768030
TOTAL EQUITY AND
LIABILITIES	170285304	184480251

BALANCE SHEET

In Litas		Group
ASSETS	31 Mar. 2010	2009
Non-current assets	38313523	40244322
Intangible assets	202103	234725
Tangible non-current assets	30778002	32412105
Financial assets	6266867	6247855
Other intangible assets	1066551	1349637
Current assets	161417692	172830335
Inventories	56366647	53811431
Advance payments	3190567	6189074
Accounts receivable in one year	45600989	54467327
Other current assets	9913116	2222936
Cash and cash equivalents	46346373	56139567
TOTAL ASSETS	199731215	213074657

In Litas	Group
EQUITY AND LIABILITIES	31 Mar. 2010	2009
Equity	101312270	101114316
Share capital	16350000	16350000
Reserves	12270731	12465122
Retained profit (loss)	72289219	71488724
Translation reserve	402320	810470
Minority share	$-914538$	$-670604$
Amounts payable and liabilities	99333483	112630945
Amounts payable in one year and
long term liabilities	10586274	11575314
Loans and borrowings	6305906	6988316
Provisions	1955943	2248495
Deferred tax liabilities	1822890	1849184
Grants and subsidies	58650	60563
Other payable amounts	442885	428756
Amounts payable in one year and
short term liabilities	88747209	101055631
Loans and borrowings	40427331	40697653
Trade payables	17187833	22254571
Prepayments received	15353523	18201667
Current tax payable	40333	127923
Other liabilities	15738189	19773817
TOTAL EQUITY AND
LIABILITIES	199731215	213074657

INCOME STATEMENT

IN LITAS		Group	Company
	31 March 2010	31 March 2009	31 March 2010	31 March 2009
SALES	26149651	50470818	20232610	44458092
COST OF SALES	22771651	42652200	18209080	37878357
GROSS PROFIT (LOSS)	3378000	7818618	2023530	6579735
OPERATING COSTS	4001741	5552965	2507796	4234714
Sales	75053	128234	57383	117894
General and administrative	3926688	5424731	2450413	4116820
PROFIT (LOSS) FROM TYPICAL ACTIVITIES	$-623741$	2265653	$-484266$	2345021
OTHER ACTIVITIES	$-170529$	$-86689$	$-43134$	$-10430$
Revenue	99297	73587	153025	103280
Expenses	269826	160276	196159	113710
FINANCIAL AND INVESTING ACTIVITIES	1608267	$-2650548$	1130736	$-177950$
Revenue	2662340	417321	1287811	372009
Expenses	1054073	3067869	157075	549959
PROFIT (LOSS) FROM ORDINARY ACTIVITIES	813997	$-471584$	603336	2156641
EXTRAORDINARY INCOME
EXTRAORDINARY EXPENSES
PROFIT BEFORE TAXATION	813997	$-471584$	603336	2156641
TAX ON PROFIT	390722	315337	130581	541812
NET PROFIT (LOSS)	423275	$-786921$	472755	1614829
FALLING TO SHAREHOLDERS OF THE COMPANY	606103	105713
FALLING TO MINORITY SHARE	$-182828$	$-892634$

CASH FLOW STATEMENT

	Company
	31 March 2010	31 March 2009
Cash flow from operating activities
Net profit (loss)	472.755	1.614.829
Depreciation and amortisation costs	1.517.181	1.672.725
Profit (loss) from transfer of non-current assets	$-30.296$	$-7.512$
Income tax expense	130.581	140.517
	2.051.681	3.420.559
Change in inventories	-489.557	3.252.148
Change in amounts receivable	12.522.340	24.169.744
Change in prepayments	2.133.022	483.196
Change in amounts receivable after one year	$-40.842$	14.694
Change in other assets	$-7.229.143$	1.346.377
Change in trade payables	$-5.916.745$	$-26.316.651$
Change in prepayments received	$-2.920.765$	$-1.381.452$
Change in provisions and other liabilities	$-5.185.080$	$-8.971.294$
	$-5.075.089$	$-3.982.679$
Income tax paid	$-507.333$	$-226.531$
Net cash from operating activities	$-5.543.882$	$-4.209.210$
Cash flow from investing activities
Acquisition of long term assets (excl. investment)	$-54.817$	$-37.309$
Transfer of long term assets (excl. investment)	84.648	32.285
Acquisition of investments	0
Loans issued	$-4,313.241$
Loans recovered	0	139.673
Dividends and interest received	441.860	370.009
Net cash used in investing activities	$-3.841.550$	504.658
Cash flow from financial activities
Dividends paid	$-63$	$-896$
Proceeds from loans and borrowings	0
Repayments from loans and borrowings	0
Payment of finance lease liabilities	$-874.936$	$-1.123.073$
Interest paid	$-122.031$	$-183.935$
Net cash from (used in) financing activities	$-997.030$	-1.307.904
Increase (decrease) in net cash flow	$-10.382.462$	$-5.012.456$
Cash and its equivalent at the beginning of the period	53.934.684	54.770.637
Cash and its equivalent at the end of the period	43.552.222	49.758.181

	Group
	31 March 2010	31 March 2009
Cash flow from operating activities
Net profit (loss)	423.275	$-786.921$
Elimination of other non-monetary items
Depreciation and amortisation costs	1.759.310	1.976.216
Other non-monetary items	151.052	184.953
	2.333.637	1.374.248
Change in inventories	$-2.555.216$	3.382.646
Change in amounts receivable	8.866.338	23.598.538
Change in prepayments	2.998.507	1.386.936
Change in other assets	$-7.709.192$	2.837.249
Change in trade payables	$-5.066.738$	$-27.040.503$
Change in prepayments received	$-2.848.144$	$-1.711.231$
Change in provisions and other liabilities	$-4.403.491$	-9.854.549
	$-8.384.299$	$-6.026.666$
Elimination of results from financial and investing
activities	159.407	1.578.657
Net cash from operating activities	$-8.224.892$	$-4.448.009$
Cash flow from investing activities
Acquisition of non-current assets (except investments)	$-57.486$	$-163.473$
Transfer of non-current assets (except investments) Loans issued	9.536	73.001
Loans recovered		50.002
Dividends and interest received	431.554	383.329
Net cash used in investing activities	383.604	342.859
Cash flow from financial activities
Cash paid by minority interest
Dividends and tantjemes paid	$-63$	$-896$
Proceeds from loans and borrowings		108.592
Repayments from loans and borrowings
Payment of finance lease liabilities	-952.733	$-1.258.492$
Interest paid	-999.110	$-924.171$
Net cash from (used in) financing activities	$-1.951.906$	$-2.074.967$
	$-9.793.194$	$-6.180.117$
Increase (decrease) in net cash flow Cash and cash equivalent in the beginning of the period	56.139.567	57.143.406
Cash and cash equivalent at the end of the period	46.346.373	50.963.289

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STATEMENT of CHANGES IN SHAREHOLDERS' EQUITY

In Litas Group	Authorised capital	premium Share	Revaluation reserve	reserve Legal	fluctuation Currency impact	Accrued profit	Equity share falling to Company parent share	Minority share	Total
Balance as of 1 January 2009	16.350.000		10.452.776	2.003.361	681.774	82.844.071	112.331.982	4.545.502	116.877 484
Decrease in reappraisal reserve			$-194.392$			194.392		$-1.146$	$-1.146$
Net profit (loss) for 2009						105.713	105.713	$-891.755$	$-786.042$
Dividend									っ
Legal reserves formed					376.136		376.136		376.136
Currency rate change
Balance as of 31 March 2009	16.350.000	0	10.258.384	2.003.361	1.057.910	83.144.176	112.813.831	3.652.601	116,466.432
Balance as of 31 December 2009	16.350.000	0	10.445.141	2.019.981	810.470	71.488.724	101.114.316	$-670.604$	100.443.712
Decrease in reappraisal reserve			$-194.391$			194.392
Net profit (loss) for 2010						606.103	606.103	$-182.828$	423.275
Influence of currency rate change Dividend					$-408.150$		$-408.150$	$-61.106$	-469.256
Reserves formed
									0
Company transfer									0
Balance as of 31 March 2010	16.350.000		10.250.750	2.019.981	402.320	72.289.219	101.312.270	-914.538	100.397.732

Panevėžio statybos trestas AB Interim Financial Statement for 3 months of 2010

Vuedulon In Litas	Authorised capital	premium ğΩ Shar	revaluation £	Financial reserve	reserve Legal	reserves Other	Deferred result	Total
Balance as for 31 December 2008 Net profit (loss) 2009 unrecognised Net profit (loss) 2009 Reserves formed	16.350.000		9.705.028 $-175.293$		1.635.030		93.372.055 175.293 1.614.829	1.614.829 121.062.113
Balance as for 31 December 2009 Net profit (loss) 2010 unrecognised Balance as for 31 March 2009 Net profit (loss) 2010 Dividend	16.350.000 16,350.000		$-175.293$ 9.529.735 9.715.594		1.635.030 1.635.030		95.162.177 472.755 97.031.157 175.293	472.755 122.676.942 124,731.781
Balance as of 31 March 2010	16.350.000		9.540.301		1.635.030		97.679.205	125.204.536

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 (Šiaurės 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.

In January through December 2008 the following subsidiaries were functioning in the company: Gerbusta, Pastatų apdaila and Genranga. 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 Tchrepovec and a subsidiary in Kaliningrad. 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.

As of 31 December 2010 the Group includes the parent company and 8 subsidiaries:

Subsidiaries	Type of activities	Share controlled (per cent)	Headquarter address
Skydmedis UAB	Production of wood constructions	100	Pramonės Str. 5,
			Panevėžys
			Tel.: $+37045583341$
Metalo meistrai UAB	Production of metal constructions	100	Tinklų Str. 7, Panevėžys
Vekada UAB	Electrical installation works	96	Marijonų Str. 36,
			Panevėžys
			Tel.: +370 45 461311
Vilniaus papedė TŪB	Construction works	69	Švitrigailos Str. 8, Vilnius
			Tel.: +370 5 2609405
Alinita UAB	Air conditioning equipment	100	Dubysos Str. 31, Klaipėda
			Tel.: +370 46 340363
PS Trests SIA	Construction	100	Vietalvas Str. 5, Riga
Baltlitstroij OOO	Construction	100	Sovetskij Ave. 43,
			Kaliningrad
			Tel.: 0074012350435
PST Investicijos UAB	Real estate development	67	Konstitucijos Ave. 7,
			Vilnius Tel.: $+3705$
			2728213
Subsidiaries of PST investicijos UAB:
Ateities projektai UAB	Real estate development and	100	Konstitucijos Ave. 7,
	sales		Vilnius
Sakališkės UAB	Real estate development and	100	Konstitucijos Ave. 7,
			AKCINÉ BENDROVÉ

LDTE NEVÉŽIO STATYBOS TRESTAS

	sales		Vilnius
Kauno erdvė UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
Gėlužės projektai UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
Verkių projektas UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
OOO ISK Baltevromarket	Construction investment company	100	Sovetskij Lane 43, Kaliningrad
Smiltynių kalvos UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius

Basis of Interim Financial Statement Preparation

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

The same accounting principles were applicable to the interim financial statement as to the annual financial statement.

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

Currency	31 March 2010	31 Dec. 2009
1 EUR	3.4528	3.4528
10 RUB	0.86978	0.79465

Principles of Consolidation

The consolidated financial statement incorporates the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company has the power to manage the financial and operating policies of the entity where the capital has been invested so as to obtain benefits from its activity.

The financial results of the subsidiary companies, acquired or sold during the year, are included in the consolidated operating statement covering the period from the subsidiary company acquisition date till the subsidiary company selling date. The financial statements of the subsidiary companies are revised so that they comply with the accounting policies applicable by the group in case they were different.

For consolidation purposes all significant remaining balance, transactions and unrealized profit (loss) of the operations between the companies the Group were eliminated from the financial statement.

Loans

On 31 March 2010 PST investicijos UAB Company Group had bank credits amounting 37,630,171 Litas. The interest rate of the credits is 1-6 months Vilibor + $1.1 - 1.85\%$ .

Guarantees, Sureties

On 31 March 2010 the warranty deeds granted by credit institutions for the liabilities of Panevėžio statybos trestas AB amounted 18,540,509 Litas.

Dividends

The annual General Meeting of the Shareholders of Panevėžio statybos trestas AB that took place on 5 May 2010 made the decision to pay dividends in the amount of 1,144,500 Litas (0.07 Litas per share) and bonuses in the amount of 1,144,500 Litas.

Significant Changes in the Interim Financial Statement during the Reporting Period

There were no significant changes in the financial statements for the first quarter of 2010.

	Group		Company
	31 March 2010	31 March 2009	31 March 2010	31 March 2009
Income	26150	50471	20234	44458
Cost price	22772	42652	18209	37878
Gross profit	3378	7819	2024	6580
Gross profit margin (per cent)	12.92	15.49	10.00	14.80
Net profit margin (per cent)	1.62	$-1.56$	2.34	3.63
Earnings before taxes and interest, EBIT (thousands Litas)	1813	452	725	2341
Earnings before taxes, interest, depreciation and amortisation EBITDA (thousands Litas)	3572	2428	2242	4014
Profit per one share (Litas)	0.04	0.01	0.03	0.10
Return on equity (per cent) (ROE)	0.42	$-0.70$	0.38	1.32
Return on assets (ROA)	0.21	$-0.32$	0.28	0.82
Return on investment (ROI)	0.38	$-0.57$	0.36	1.21
Current liquidity ratio	1.82	1.90	2.53	2.15
Book value of a share	6.14	7.12	7.66	7.50
Share price/book value ratio (P/BV)	0.67	0.20	0.54	0.19

Key Indicators of Panevėžio statybos trestas AB Company Group (thousands Litas):