Ditton pievadkezu rupnica

Quarterly Report • May 31, 2013

JSC "DITTON PIEVADĖĒŽU RŪPNĪCA"

NON-AUDITED AND NON-CONSOLIDATED FINANCIAL REPORT FOR 3 MONTHS OF YEAR 2013 (01.01.2013 – 31.03.2013)

Prepared in accordance with Latvian statutory requirements and AS "NASDAQ OMX Riga" rules

Daugavpils 2013

Contents

Information about the Company …………………………………	3-5
Management report ………………………………………………	6-7
Balance sheet ……………………………………………………	8-9
Income statement	10
Cash flow statement …………………………………………	11-12
Statement of changes in equity ………………………….…………	13
Appendixes
Explanatory notes …………………………………………………….	14
Explanations and analyses on separate items of financial reports …	15

INFORMATION ABOUT THE COMPANY

Company name Legal status Registrations number Registration in Register of Enterprises Registration in Commercial Register Office Legal address Mailing address	Ditton pievadkezu rupnica Joint Stock Company 40003030187 Riga, 03.10.1991 Riga, 29.08.2003. Visku Str. 17, Daugavpils, LV-5410, Latvia Visku Str. 17, Daugavpils, LV-5410, Latvia
Fixed capital Public bearer shares Nominal value of one public bearer share	7 400 000.00 LVL 7 400 000 1.00 LVL
Chief accountant	Valentina Krivoguzova

Reporting period 01.01.2013 – 31.03.2013

Persons in charge for drawing up of the financial report: Mr. Boriss Matvejevs, phone +371 65402333, e-mail: dpr@dpr.lv Ms. Natalja Redzoba, phone +371 65402333, e-mail: dpr@dpr.lv

INFORMATION ON MANAGEMENT BOARD AND COUNCIL MEMBERS

THE MANAGEMENT BOARD

Chairman of the Management Board

Pjotrs Dorofejevs, elected 05.07.2010 (Member of the Management Board from 29.08.2003) Members of the Management Board

Natalja Redzoba, elected 29.08.2003. Jevgenijs Sokolovskis, elected 05.07.2010

Information on shares owned by Members of the Management Board

Members of the Management Board	Share ownership ∗
	Quantity of shares	%
Pjotrs Dorofejevs	no shares	-
Natalja Redzoba	no shares	-
Jevgenijs Sokolovskis	1 900	0,03

THE COUNCIL

Chairman of the Council
Boriss Matvejevs, elected 05.05.2005
Deputy Chairmen of the Council
Georgijs Sorokins, elected 06.11.2000
Inga Goldberga, elected 14.08.2009
Members of the Council
Anzelina Titkova, elected 14.08.2009
Vladimir Bagaev, elected 28.05.2012

Information on shares owned by Members of the Council

Members of the Management Board	Share ownership*
	Quantity of shares	%
Boriss Matvejevs	no shares	-
Georgijs Sorokins	5 768	0,08
Inga Goldberga	no shares	-
Anzelina Titkova	no shares	-
Vladimir Bagaev	700 000	9,46

For more detailed information on professional background of the Management Board and Council members please refer to our website: http://www.dpr.lv/web_ru/for-akcioner.htm .

^* As of 31.05.2013

INFORMATION ON SHAREHOLDERS AND SHARES

COMPANY SHAREHOLDERS (OVER 5%) *

	Ownership
NAME	interest, %
Eduards Zavadskis	20,00
Vladislavs Driksne	19,92
MAX Invest Holding SIA	13,63
Maleks S SIA	13,50
Vladimir Bagaev	9,46

* Note: Information is presented on the basis of the list of shareholders of JSC "Ditton pievadėēžu rūpnīca" dated 17.05.2013, taking into account the shareholders' notifications on acquisition and disposal significant holding in the Issuer's equity.

SHARE PRICE DEVELOPMENT

MANAGEMENT REPORT

Information on the results of the company in 3 months of year 2013

In 3 months period of 2013 net-turnover was fulfilled in the amount of 1 576 thous.LVL (2 242 thous.EUR), which compared to the forecast is by 324 thous.LVL (461 thous.EUR) or 17% less. Compared to the level of previous year, net-turnover of the reporting period is by 1 228 thous.LVL (1 747 thous.EUR) or by 44% less.

Loss before taxes amounted to 315 thous.LVL (448 thous.EUR) in 3 months period of 2013. Loss after taxes amounts to 325 thous.LVL (462 thous.EUR).

Commodity output is estimated in the amount of 993 thous.LVL (1 413 thous.EUR). The result of 3 months of 2013 is by 827 thous.LVL (1 177 thous.EUR) or by 45% lower than in the relevant period of previous year.

At present the company exports 99% of its products to the East and West: among them 68% eastwards and 31% westwards; 1% of products are sold on domestic market.

The average statistical number of employees of JSC "Ditton pievadėēžu rūpnīca" was 328 employees in 3 months of year 2013.

The average salary amounted to 254 LVL (361 EUR) in 3 months period of 2013, which is by 76 LVL (109 EUR) less than in 3 months of 2012.

Significant events. Market tendencies and development of the company. Risks.

The activity of the Company in the first quarter of 2013 gives the ground to consider that in the world economy trends of the so-called "second wave" of global economic crisis are intensifying which has been forecasted by financial analysts of the European Union. Despite some increase and a subsequent stabilization of the market between 2010 and 2011, the Company, for its part, also informed the shareholders and investors about its forecasts in respect of negative effects of this "second wave" of the crisis on economic activity and a potential decline in industrial production.

The general forecast of the Management Board for the drop in the Company's production due to the fact that the Company is integrated in global economy and is dependent on market activity and demand is up to date. Topical is also an evaluation of the activity in different market segments as well as information about other negative factors affecting the Company's activity.

More detailed information about intensification of crisis appearances and increase of the risk for the Company to operate at a loss is set out in the Management Report of the Annual Report for 2012. All the information set out in this report is valid.

The losses of the first quarter have been predetermined also by a traditional seasonal decline in demand for the Company's products in the market, and consequently, the decline in production volumes on the background of retention and growth of costs of "winter period" (up to 10%) for property maintenance (first of all – energy resources). According to forecasts of the Management Board the Company's performance in the coming quarters will allow to balance the overall results of the activity by covering or significantly reducing these losses, unless the current economic in the global market will significantly slowdown.

For localization and reduction of the above adverse conditions the Company is continuing to work in economy regime by using internal resources and reorganizing production processes according to the existing volumes of demand, production and costs, including optimization of staff in accordance with production volumes and its actual employment.

STATEMENT ABOUT MANAGEMENT LIABILITY

According to our information, the presented financial statements for 3 months of year 2013 ended 31 March 2013 have been prepared in accordance with the existing legislative requirements and give a true and fair view of the assets, liabilities, financial position and profits of the joint-stock company "Ditton pievadėēžu rūpnīca". Management report contains truthful information.

Chairman of the Management Board of JSC "Ditton pievadkezu rupnica" Pjotrs Dorofejevs

BALANCE SHEET

			1 EUR = 0,702804 LVL
ASSETS	31.03.2013 LVL	31.03.2013 EUR	31.03.2012 LVL	31.03.2012 EUR
1. Long-term investments
I. Non-material investments
Concessions, patents, licenses, trade marks and	1 271	1 808	520	740
similar rights
Other non-material investments	3 072 624	4 371 950	4 189 942	5 961 750
Non-material investments total	3 073 895	4 373 758	4 190 462	5 962 490
II. Fixed assets
Plots of land, buildings and constructions	1 080 691	1 537 685	1 612 177	2 293 921
Technological equipment and machinery	15 718	22 365	32 602	46 388
Other fixed assets and stock	18 136	25 805	26 133	37 184
Formation of fixed assets and costs of
unfinished construction objects	31 222	44 425	31 222	44 425
Fixed assets total	1 145 767	1 630 280	1 702 134	2 421 918
III. Long-term financial investments
Participation in the capital of other companies	47 200	67 160	47 200	67 160
Long-term loans	-	-	404 856	576 058
Assets of deferred tax	193 748	275 678	148 108	210 739
Long-term financial investments total	240 948	342 838	600 164	853 957
1. Long-term investments total	4 460 610	6 346 876	6 492 760	9 238 365
2. Current assets
I. Reserves
Raw materials, basic materials and subsidiary
materials	656 595	934 251	743 246	1 057 544
Unfinished products	231 709	329 692	322 865	459 396
Finished products and goods for sale	184 712	262 821	314 103	446 928
Advance payments for goods	33 678	47 919	111 504	158 656
Reserves total	1 106 694	1 574 683	1 491 718	2 122 524
II. Debtors
Debts of buyers and customers	5 531 324	7 870 365	3 445 412	4 902 380
Other debtors	280 798	399 540	227 040	323 048
Debtors total	5 812 122	8 269 905	3 672 452	5 225 428
IV. Cash and cash equivalents	106 202	151 112	150 871	214 670
2. Current assets total	7 025 018	9 995 700	5 315 041	7 562 622
TOTAL ASSETS	11 485 628	16 342 576	11 807 801	16 800 987

BALANCE SHEET

			1 EUR = 0,702804 LVL
LIABILITIES	31.03.2013	31.03.2013	31.03.2012	31.03.2012
	LVL	EUR	LVL	EUR
1. Equity capital
Fixed capital	7 400 000	10 529 251	7 400 000	10 529 251
Retained earnings:
a) retained earnings of previous years	1 081 964	1 539 496	1 090 469	1 551 598
b) profit / (loss) of reporting period	-325 220	-462 746	83 557	118 891
1. Equity capital total	8 156 744	11 606 001	8 574 026	12 199 740
2. Long-term creditors:
Loans from credit institutions	1 242 447	1 767 843	1 269 113	1 805 785
2. Long-term creditors total	1 242 447	1 767 843	1 269 113	1 805 785
3. Short-term creditors:
Loans from credit institutions	478 610	681 001	541 914	771 074
Other loans	116 733	166 096	136 062	193 599
Advance payments received from customers	8 697	12 375	30 033	42 733
Debts to suppliers and contractors	1 126 793	1 603 282	983 764	1 399 770
Taxes and compulsory social security
contributions	181 735	258 586	78 808	112 134
Other creditors	107 882	153 502	135 390	192 642
Accumulated liabilities	65 987	93 890	58 691	83 510
3. Short-term creditors total	2 086 437	2 968 732	1 964 662	2 795 462
Creditors total	3 328 884	4 736 575	3 233 775	4 601 247
LIABILITIES TOTAL	11 485 628	16 342 576	11 807 801	16 800 987

INCOME STATEMENT

			1 EUR = 0,702804 LVL
	31.03.2013	31.03.2013	31.03.2012	31.03.2012
	LVL	EUR	LVL	EUR
Net turnover	1 576 306	2 242 881	2 804 368	3 990 256
Production cost of sold products	-1 468 303	-2 089 207	-2 254 805	-3 208 298
Gross profit	108 003	153 674	549 563	781 958
Selling costs	-279 330	-397 451	-279 329	-397 449
Administration costs	-134 290	-191 077	-144 221	-205 210
Other operating income	28 794	40 970	8 004	11 389
Other operating expenses	-18 244	-25 959	-14 193	-20 195
Interest payment and similar expenses	-19 482	-27 720	-25 227	-35 895
Profit / (loss) before taxes	-314 549	-447 563	94 597	134 598
Other taxes	-10 671	-15 183	-11 040	-15 708
Profit / (loss) of reporting period	-325 220	-462 746	83 557	118 890
Index EPS	-0.044	-0.063	0.011	0.016

STATEMENT OF CASH FLOW

	1 EUR = 0,702804 LVL
	31.03.2013 LVL	31.03.2013 EUR	31.03.2012 LVL	31.03.2012 EUR
I. Cash flow of basic activity
1. Profit / (loss) before taxes	-314 549	-447 563	94 597	134 599
Corrections:
Depreciation of fixed assets	138 118	196 525	154 222	219 439
Amortization of non-material investments	75	107	29	41
Interest expense	19 482	27 720	25 227	35 895
Amortization share of other non-material investments	279 329	397 449	279 329	397 449
Income from sale of fixed assets	-	-	-351	-499
2. Profit / (loss) from economic activity in	122 455	174 238	553 053	786 924
reporting period
Corrections in current assets and short-term creditors:
In Debtors	-287 038	-408 418	-1 104 138	-1 571 047
In Reserves	189 893	270 193	-18 241	-25 955
In Creditors	28 902	41 124	436 312	620 816
3. Cash flow of basic activity	54 212	77 137	-133 014	-189 262
4. Expenses on tax payments (corporate income tax and tax on immovable property)	-10 671	-15 183	-11 040	-15 708
Cash flow of basic activity	43 541	61 954	-144 054	-204 970
II. Cash flow of investing activity
Loans issued	-	-	214 334	304 970
Purchase of fixed assets	-	-	-15 923	-22 656
Income from sale of fixed assets	-	-	351	499
Cash flow of investing activity	-	-	198 762	282 813
III. Cash flow of financing activity
Loans (repaid) / received, net	-21 644	-30 797	-42 977	-61 151
Interest paid	-19 482	-27 720	-25 227	-35 895
Cash flow of financing activity	-41 126	-58 517	-68 204	-97 046

CONSOLIDATED DATA ON CASH INCOME AND EXPENSES

1 EUR = 0,702804 LVL

	31.03.2013 LVL	31.03.2013 EUR	31.03.2012 LVL	31.03.2012 EUR
Cash flow of basic activity, net	43 541	61 954	-144 054	-204 970
Cash flow of investing activity, net	-	-	198 762	282 813
Cash flow of financing activity, net	-41 126	-58 517	-68 204	-97 046
Growth of cash and cash equivalents	2 415	3 437	-13 496	-19 203
Balance of cash and cash equivalents at the beginning of reporting period	103 787	147 675	164 367	233 873
Balance of cash and cash equivalents at the end of reporting period	106 202	151 112	150 871	214 670

Statement of changes in equity for the period from 01.01.2013 till 31.03.2013 (LVL)
	Share	Share	Other		Currency	Accumulat	Current	Total
	capital	premium	reserves		translation reserves	ed profit	period's profit
	LVL	LVL	LVL		LVL	LVL	LVL	LVL
As at 1st January, 2013	7 400 000	-		-	-	1 081 964	-	8 481 964
Profit for 3 months of
2013	-	-		-	-	-	-325 220	-325 220
As at 31 March, 2013	7 400 000	-		-	-	1 081 964	-325 220	8 156 744
As at 1st January, 2012	7 400 000	-		-	-	1 090 469	-	8 490 469
Profit for 3 months of
2012	-	-		-	-	-	83 557	83 557
As at 31 March, 2012	7 400 000	-		-	-	1 090 469	83 557	8 574 026

1 EUR = 0,702804 LVL

Statement of changes in equity for the period from 01.01.2013 till 31.03.2013 (EUR)
	Share capital	Share premium	Other reserves		Currency translation reserves	Accumulat ed profit	Current period's profit	Total
	EUR	EUR	EUR		EUR	EUR	EUR	EUR
As at 1st January, 2013 (0.702804)	10 529 251	-		-	-	1 539 496	-	12 068 747
Profit for 3 months period 2013 (0.702804)	-	-		-	-	-	-462 746	-462 746
As at 31 March, 2013 (0.702804)	10 529 251	-		-	-	1 539 496	-462 746	11 606 001
1st January, 2012 (0.702804)	10 529 251	-		-	-	1 551 598	-	12 080 849
Profit for 3 months period 2012 (0.702804)	-	-		-	-	-	118 891	118 891
As at 31 March, 2012 (0.702804)	10 529 251	-		-	-	1 551 598	118 891	12 199 740

Appendix

Explanatory notes

Accounting policies and methods applied in present interim financial statement are consistent with those applied in the last Annual Report.

This financial statement of JSC "Ditton pievadkezu rupnica" has been prepared in accordance with the source documents and presents fairly the financial position of the JSC as of 31 March 2013 and the results of its operation and cash flows for the 3 months period ended 31 March 2013.

This financial report has been prepared in compliance with statutory regulations of the Republic of Latvia on a going concern basis. Appropriate accounting policies have been applied on a consistent base.

The interim financial report for 3 months of 2013 has not been audited by jury auditor.

The interim report has been prepared in Latvian Lats and Euro.

Currency exchange rate: 1 EUR = 0,702804 LVL.

Explanations and analyses on separate items of financial reports

Production of commodity products in the period of 3 months of year 2013 (thous.LVL/thous.EUR)

Output of commodity products is estimated in the amount 993 thous.LVL (1 413 thous.EUR). The result of reporting period is by 827 thous.LVL (1 177 thous.EUR) or 45% less than in 3 months period of previous year.

Production of driving chains in 3 months of 2013 (thous.meters) Production of driving chains in natural units is by 509 thous.meters less than in 3 months period of previous year.

Production of driving chains in 3 months of year 2013 (thous.LVL/thous.EUR) In 3 months of this year there have been driving chains produced in money terms in the amount of 970 thous.LVL (1 380 thous.EUR). The actual performance of reporting period is by 827 thous.LVL (1 177 thous.EUR) lower than in the relevant period of previous year.

Sales (net-turnover) in 3 months of 2013 (thous. LVL/thous.EUR)

Net-turnover has been in fact fulfilled in the amount of 1 576 thous.LVL (2 242 thous.EUR). The actual performance of the reporting period is by 1 228 thous.LVL (1 747 thous.EUR) or 44% less than the index of the same period of previous year.

Sales of main products in 3 months of 2013 (thous. LVL/ thous.EUR) Sales of main products in the reporting period amounted to 1 369 thous.LVL (1 948 thous.EUR), and it is by 910 thous.LVL (1 295 thous.EUR) or 60% less than the result of the relevant period of prior year.