Ditton pievadkezu rupnica

Quarterly Report • Feb 28, 2011

JSC "DITTON PIEVADĖĒŽU RŪPNĪCA"

NON-AUDITED AND NON-CONSOLIDATED FINANCIAL REPORT FOR 12 MONTHS OF YEAR 2010 (01.01.2010 – 31.12.2010)

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

Daugavpils 2011

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
Summary of financial results ……………………………………………	15
Explanations and analyses on separate items of financial reports …	16

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 01.01.2010 – 31.12.2010

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 22.06.2010 (Member of the Management Board from 07.01.2004 till 22.06.2010) Eduards Zavadskis (29.08.2003. till 22.06.2010) Member of the Management Board Natalja Redzoba, elected 29.08.2003.

Jevgenijs Sokolovskis, elected 22.06.2010

Information on shares owned by Members of the Management Board

Members of the Management Board	Share ownership ∗
	Quantity of shares	%
Pjotrs Dorofejevs	no shares	-
Eduards Zavadskis (29.08.2003 – 22.06.2010)	1 480 000	20
Natalja Redzoba	1 900	0,03
Jevgenijs Sokolovskis	no shares	-

THE COUNCIL

Chairman of the Council Boriss Matvejevs, elected 14.08.2009 Deputy Chairmen of the Council Georgijs Sorokins, elected 14.08.2009 Inga Goldberga, elected 14.08.2009 Members of the Council Anzelina Titkova, elected 14.08.2009 Timo Sas, elected 16.10.2009

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

no shares	-
	-
no shares	-
	no shares

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 31.12.2010

INFORMATION ON SHAREHOLDERS AND SHARES

COMPANY SHAREHOLDERS (OVER 5%) *

NAME	Ownership interest, %
Vladislavs Driksne	20,39
Eduards Zavadskis	20,00
MAX Invest Holding SIA	13,16
Maleks S SIA	9,65
Pavels Samuilovs	9,46

* Note: Information is presented on the basis of the list of shareholders of JSC "Ditton pievadėēžu rūpnīca" dated 20.05.2010, 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 12 months of year 2010

In 12 months period of 2010 net-turnover in fact was fulfilled in the amount of 7 537 thous.LVL (10 724 thous.EUR) against the forecast 6 000 thous.LVL (8 537 thous.EUR), increase amounts to 1 537 thous.LVL (2 187 thous.EUR) or 26%. Compared to the level of previous year, net-turnover of the reporting period is by 2 631 thous.LVL (3 744 thous.EUR) or by 54% more.

Profit before taxes amounted to 371 thous.LVL (528 thous.EUR) in 12 months period of 2010, which is by 254 thous.LVL (361 thous.EUR) more than the forecast. Profit after taxes amounts to 387 thous.LVL (551 thous.EUR).

Commodity output is estimated in the amount of 5 613 thous.LVL (7 987 thous.EUR). The result of 12 months of 2010 is by 1 300 thous.LVL (1 850 thous.EUR) or by 30% higher than 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 349 employees in 12 months of year 2010.

The average salary amounted to 311 LVL (443 EUR) in 12 months period of 2010, which is by 60 LVL (85 EUR) more than in 12 months of 2009.

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

The activity of the company in the 12 months of 2010 gives the ground to consider that the situation on the market where production of the company is represented has stabilized and there are certain growth trends outlined. It is indicated by the economic situation on the markets of the states where production of the company is represented and by increase of purchase orders volumes from the side of our main partners (IWIS, KTS) represented on the Western market as well. Improvement of the situation on the Eastern market has been favoured by the support program for automobile manufacturers adopted by the government of Russian Federation from 01.03.2010 which undoubtedly shall increase production delivery volumes on conveyors of automobile factories. Currently, in the community of Russian Federation there are discussions about the second phase of this program or its extension.

However, the Management Board of the company notes that up trends can be affected by price increase on metal products which started on the market in the 2nd quarter of 2010.

Also the rate of turnover growth forecasted for 2010 can be considered as fulfilled which resulted in a certain stabilization of the financial situation of the company, at the same time, some facts and market trends, in particular, increase of prices on raw materials, may be evidence for the probability of the "second wave" of crisis phenomena.

In view of this and various "scenarios" of potential development of product markets, the Management Board with the approval of the Council adopted a decision on

substantial investments into the "market of next periods". At the same time, the Management Board and the Council believe that the final decision on this investment should be adopted by investors (shareholders) at a general meeting along with approving the annual report, and however the project of investments is reflected in the report for 12 months of 2010, the decision on them will be effective only after its adopting by investors (shareholders). The company shall disclose information on the shareholders' decision in addition through the information disclosing systems of ORICGS and NASDAQ OMX Riga.

Despite this, by assessing the situation in the company and measures being taken for ensuring the business activity of the company in the crisis and post-crisis period, it is necessary to take into account, that while being included into a global and European economics the company is not able to survive like in an oasis of "prosperity" and it faces all factors of global crisis to the same degree, reflecting the level of the general decrease. The Management Board has noticed this circumstance already before, and it is valid to the full extant. Therefore, in the analysis of the company's development tendencies and risks, it is constrained to repeat the same aspects which are mentioned in the previous quarterly reports.

In the existing circumstances 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.

The Management Board considers it as its main task to continue working upon minimizing global crisis risks, maintaining the company with its brand, technologies, personnel, traditional partners and market with future development upon overcoming the crisis together with the whole global and Latvian economics with simultaneous using of all favorable conditions appearing for development of the company's chances and its market growth.

STATEMENT ABOUT MANAGEMENT LIABILITY

According to our information, the presented financial statements for 12 months of year 2010 ended December 31, 2010 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

INCOME STATEMENT

	31.12.2010	31.12.2010	1 EUR = 0,702804 LVL 31.12.2009	31.12.2009
	LVL	EUR	LVL	EUR
Net turnover	7 536 984	10 724 162	4 906 257	6 980 975
Production cost of sold products	-6 838 176	-9 729 847	-4 484 048	-6 380 226
Gross (loss) / profit	698 808	994 315	422 209	600 749
Selling costs	-255 849	-364 040	-680 561	-968 350
Administration costs	-753 749	-1 072 488	-690 162	-982 012
Other operating income	790 492	1 124 768	22 967	32 679
Other operating expenses	-78 048	-111 052	-97 730	-139 057
Other interest income and similar income	49 651	70 647	53 975	76 799
Interest payment and similar expanses	-80 638	-114 738	-85 200	-121 229
(Loss) / profit before taxes	370 667	527 412	-1 054 502	-1 500 421
Corporate income tax in reporting year	-	-	-	-
Income and expenses of deferred tax	56 181	79 938	56 114	79 843
Other taxes	-40 158	-57 140	-44 743	-63 664
(Loss) / profit of reporting year	386 690	550 210	-1 043 131	-1 484 242
Index EPS	0,052	0,0739	-0,141	-0,200

JSC "DITTON PIEVADKEZU RUPNICA" FINANCIAL REPORT FOR 12 MONTHS OF 2010 BALANCE SHEET

		31.12.2010	1 EUR = 0,702804 LVL
ASSETS	31.12.2010		31.12.2009	31.12.2009
	LVL	EUR	LVL	EUR
1. Long-term investments
I. Non-material investments
Concessions, patents, licenses, trade marks and
similar rights	8	11	95	135
Other non-material investments (purchase of	5 586 589	7 949 000	-	-
the market)
Non-material investments total	5 586 597	7 949 011	95	135
II. Fixed assets
Plots of land, buildings and constructions and
perennial plantations	2 369 111	3 370 941	3 101 961	4 413 693
Technological equipment and machinery	12 540	17 843	14 080	20 034
Other fixed assets and stock	105 311	149 844	1 150	1 636
Formation of fixed assets and costs of
unfinished construction objects	7 261	10 332	7 261	10 332
Fixed assets total	2 494 223	3 548 960	3 124 452	4 445 695
III. Long-term financial investments
Participation in the capital of other companies	47 200	67 160	47 200	67 159
Other loans and other long-term debtors	-	-	378 845	539 048
Assets of deferred tax	85 048	121 012	28 867	41 074
Long-term financial investments total	132 248	188 172	454 912	647 281
1. Long-term investments total	8 213 068	11 686 143	3 579 459	5 093 111
2. Current assets
I. Reserves
Raw materials, basic materials and subsidiary
materials	679 921	967 441	951 407	1 353 730
Unfinished products	257 381	366 220	276 308	393 151
Finished products and goods for sale	250 280	356 116	817 168	1 162 727
Advance payments for goods	68 272	97 142	70 345	100 092
Reserves total	1 255 854	1 786 919	2 115 228	3 009 700
II. Debtors
Debts of buyers and customers	947 090	1 347 588	4 488 066	6 385 942
Other debtors	956 445	1 360 898	384 276	546 775
Deferred expenses	-	-	367	523
Debtors total	1 903 535	2 708 486	4 872 709	6 933 240
IV. Cash and cash equivalents	154 436	219 743	153 420	218 297
2. Current assets total	3 313 825	4 715 148	7 141 357	10 161 237
TOTAL ASSETS	11 526 893	16 401 291	10 720 816	15 254 348

BALANCE SHEET

			1 EUR = 0,702804 LVL
LIABILITIES	31.12.2010	31.12.2010	31.12.2009	31.12.2009
	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	589 152	838 288	1 632 282	2 322 528
b) (loss) / profit of reporting year	386 690	550 210	-1 043 131	-1 484 241
1. Equity capital total	8 375 842	11 917 749	7 989 151	11 367 538
2. Long-term creditors:
Loans from credit institutions	1 429 422	2 033 885	-	-
Liabilities of deferred tax	-	-	-	-
2. Long-term creditors total	1 429 422	2 033 885	-	-
3. Short-term creditors:
Loans from credit institutions	160 309	228 099	1 706 474	2 428 094
Other loans	186 877	265 902	175 000	249 003
Advance payments received from customers	6 199	8 820	81 048	115 321
Debts to suppliers and contractors	638 812	908 948	203 111	289 001
Taxes and social security payments	532 598	757 819	331 291	471 385
Other creditors	107 714	153 263	130 957	186 334
Accumulated liabilities	89 120	126 806	103 784	147 672
3. Short-term creditors total	1 721 629	2 449 657	2 731 665	3 886 810
Creditors total	3 151 051	4 483 542	2 731 665	3 886 810
LIABILITIES TOTAL	11 526 893	16 401 291	10 720 816	15 254 348

STATEMENT OF CASH FLOW

1 EUR = 0,702804 LVL

	31.12.2010 LVL	31.12.2010 EUR	31.12.2009 LVL	31.12.2009 EUR
I. Cash flow of basic activity
1. (Loss) / profit before taxes	370 667	527 412	-1 054 502	-1 500 421
Corrections:
Depreciation of fixed assets	764 319	1 087 528	763 888	1 086 915
Depreciation of non-material investments	87	124	97	138
Provisions for long-term loans	-124 750	-177 503	124 750	177 503
Income from sale of fixed assets	-1 957	-2 785	-4 815	-6 851
Interest income	-49 651	-70 647	-53 975	-76 800
Interest expense	80 638	114 738	85 200	121 229
2. Profit or loss from economic activity in
reporting year	1 039 353	1 478 867	-139 357	-198 287
Corrections:
In Debtors	-1 660 008	-2 361 979	-871 405	-1 239 898
In Reserves	859 374	1 222 779	1 028 279	1 463 109
In Creditors	524 252	745 943	198 482	282 414
3. Difference of cash income from economic
activity and expenses	762 971	1 085 610	215 999	307 338
4. Expenses on tax payments (corporate income tax and tax on immovable property)	-186 062	-264 742	-196 087	-279 007
Cash flow of basic activity	576 909	820 868	19 912	28 331
II. Cash flow of investing activity
Loans issued	-258 196	-367 380	-6 010	-8 551
Expenses for purchase of fixed assets	-134 090	-190 793	-1 137	-1 618
Earnings from sale of fixed assets	1 957	2 785	19 393	27 593
Cash flow of investing activity	-390 329	-555 388	12 246	17 424
III. Cash flow of financing activity
Loans received, net	-	-	123 710	176 023
Interest paid	-80 698	-114 823	-85 901	-122 226
Expenses for repayment of loans	-104 866	-149 211	-	-
Cash flow of financing activity	-185 564	-264 034	37 809	53 797

CONSOLIDATED DATA ON CASH INCOME AND EXPENSES

	31.12.2010	31.12.2010	31.12.2009	31.12.2009
	LVL	EUR	LVL	EUR
Cash flow of basic activity	576 909	820 868	19 912	28 331
Cash flow of investing activity	-390 329	-555 388	12 246	17 424
Cash flow of financing activity	-185 564	-264 034	37 809	53 797
Exceed of cash income over overspending	1 016	1 446	69 967	99 554
Balance of cash and cash equivalents at the beginning of reporting year	153 420	218 297	83 453	118 743
Balance of cash and cash equivalents at the end of reporting year	154 436	219 743	153 420	218 297

STATEMENT OF CHANGES IN EQUITY AS OF 31.12.2010 (LVL)

	Equity capital	Retained profit / (loss) of reporting	Accumulate d profit	Equity capital TOTAL
	LVL	year LVL	LVL	LVL
31.12.2008.	7 400 000	134 200	1 498 082	9 032 282
Profit of 2008 transferred to retained profit of previous years	-	-134 200	134 200	-
Loss of reporting year	-	-1 043 131	-	-1 043 131
31.12.2009.	7 400 000	-1 043 131	1 632 282	7 989 151
Profit of 2009 transferred to retained profit of previous years	-	1 043 131	-1 043 131	-
Profit or loss of reporting year	-	386 690	-	386 690
31.12.2010.	7 400 000	386 690	589 151	8 375 841

STATEMENT OF CHANGES IN EQUITY AS OF 31.12.2010 (EUR)

	1 EUR = 0,702804 LVL
	Equity capital	Retained profit / (loss) of reporting	Accumulate d profit	Equity capital TOTAL
	EUR	year EUR	EUR	EUR
31.12.2008.	10 529 251	190 949	2 131 579	12 851 779
Profit of 2008 transferred to retained profit of previous years	-	-190 949	190 949	-
Loss of reporting year	-	-1 484 241	-	-1 484 241
31.12.2009.	10 529 251	-1 484 241	2 322 528	11 367 538
Profit of 2009 transferred to retained profit of previous years	-	1 484 241	-1 484 241	-
Profit or loss of reporting year	-	550 210	-	550 210
31.12.2010.	10 529 251	550 210	838 287	11 917 748

Appendix

Explanatory notes

Accounting policies and methods applied in present interim financial statement are consistent with those applied in 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 December 2010 and the results of its operation and cash flows for the 12 months period ended 31 December 2010.

This financial report has been prepared in compliance with Latvian Financial Accounting Standards on a going concern basis. Appropriate accounting policies have been applied on a consistent base.

The interim financial report for 12 months of 2010 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.

Summary of financial results for 12 months of year 2010

			thous.LVL
Name of index	Forecast	In fact	Deviation ( + / - )
Production of commodity products	5 950	5 613	-337
Production of main products	5 920	5 544	-376
Production of driving chains	5 884	5 504	-380
incl. automotive	1 973	1 915	-58
industrial	3 911	3 589	-322
Sales volume	6 000	7 537	+1 537
Sales of main products	5 965	4 914	-1 051
Profit after taxes	40	387	+347

thous.EUR 1 EUR = 0,702804 LVL

	Name of index	Forecast	In fact	Deviation ( + / - )
	Production of commodity products	8 466	7 987	-479
Production of main products		8 423	7 888	-535
	Production of driving chains	8 372	7 832	-540
	incl. automotive	2 807	2 725	-82
	industrial	5 565	5 107	-458
	Sales volume	8 537	10 724	+2 187
Sales of main products		8 487	6 992	-1 495
	Profit after taxes	57	551	+494

Explanations and analyses on separate items of financial reports

Production of commodity products in the period of 12 months of year 2010 (thous.LVL/thous.EUR)

Output of commodity products is estimated in the amount 5 613 thous.LVL (7 987 thous.EUR). The result of reporting period is by 1 300 thous.LVL (1 850 thous.EUR) or 30% higher than in 12 months period of previous year.

Production of driving chains in 12 months of 2010 (thous.meters)

Production of driving chains in natural units is by 309 thous.meters less than the forecast.

Production of driving chains in 12 months of year 2010 (thous.LVL/thous.EUR) Production of driving chains in money terms is by 380 thous.LVL (541 thous.EUR) less than the forecast. The actual performance of reporting period is by 1 284 thous.LVL (1 827 thous.EUR) more than in the relevant period of previous year.

Sales (net-turnover) in 12 months of 2010 (thous. LVL/thous.EUR)

Net-turnover has been forecasted to amount to 6 000 thous.LVL (8 537 thous.EUR) in 12 months of year 2010, in fact it has been fulfilled in the amount of 7 537 thous.LVL (10 724 thous.EUR), increase amounts to 1 537 thous.LVL (2 187 thous.EUR). The actual performance of the reporting period is by 3 743 thous. LVL (5 326 thous.EUR) or 54% more than the index of the same period of previous year.

Sales of main products in 12 months of 2010 (thous. LVL/ thous.EUR) Sales of main products in the reporting period was by 376 thous.LVL (535 thous.EUR) less than the forecast, and it is by 1 280 thous.LVL (1 821 thous.EUR) or 30 % more than the result of the relevant period of prior year.

Proceeds from other activities are by 643 thous.LVL (915 thous.EUR) more than the forecast and they amounted to 1 212 thous.LVL (1 725 thous.EUR).