Ditton pievadkezu rupnica

Quarterly Report • Nov 30, 2009

JSC "DITTON PIEVADĶĒŽU RŪPNĪCA"

NON-AUDITED AND NON-CONSOLIDATED FINANCIAL REPORT FOR 9 MONTHS OF YEAR 2009

(01.01.2009 – 30.09.2009)

Prepared in accordance with Latvian statutory requirements, International Accounting Standards, and Riga Stock Exchange rules

Daugavpils 2009

Contents

Information about the Company …………………………………	3-5
Management report ………………………………………………	6-7
Balance sheet ……………………………………………………	8-9
Income statement	10
Cash flow statement …………………………………………	11
Statement of changes in equity ………………………….…………	12-13
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	7 400 000.00 LVL
Public bearer shares	7
Nominal value	400 000
of one public bearer share	1.00 LVL
Chief accountant	Valentina Krivoguzova

Reporting period 01.01.2009 – 30.09.2009

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 Eduards Zavadskis, elected 29.08.2003. Deputy Chairman of the Management Board Pjotrs Dorofejevs, elected 07.01.2004. Member of the Management Board Natalja Redzoba, elected 29.08.2003.

Information on shares owned by Members of the Management Board

Members of the Management Board	Share ownership 
	Quantity of shares	%
Eduards Zavadskis	1 480 000	20
Pjotrs Dorofejevs	no shares	-
Natalja Redzoba	1 900	0,03

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
Jevgenijs Glinkins, till 14.08.2009
Pavels Samuilovs, till 14.08.2009
Jevgenijs Sokolovskis, till 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
Inga Goldberga	no shares	-
Anzelina Titkova	no shares	-
Timo Sas	no shares	-
Jevgenijs Sokolovskis (till 16.10.2009)	no shares	-
Jevgenijs Glinkins (till 14.08.2009)	no shares	-
Pavels Samuilovs (till 14.08.2009)	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 30.09.2009

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
Pavels Samuilovs	9,46
Gatis Poiss	7,01

* Note: Information is presented on the basis of full list of shareholders of JSC "Ditton pievadķēžu rūpnīca" dated 01.06.2008., taking into account notifications on acquisition and disposal significant holding in the Issuer's equity received by the company till 30.09.2009.

SHARE PRICE DEVELOPMENT

MANAGEMENT REPORT

Information on the results of the company in 9 months of year 2009

In 9 months of 2009 net-turnover in fact was fulfilled in the amount of 2 183 thous.LVL (3 106 thous.EUR) against the forecast 5 570 thous.LVL (7 925 thous.EUR), decrease amounts to 3 387 thous.LVL (4 819 thous.EUR) or 39,2%. Compared to the level of previous year, net-turnover of the reporting period is by 4 175 thous.LVL (5 940 thous.EUR) or by 34,3% less.

Loss before taxes amounted to -1 418 thous.LVL (-2 018 thous.EUR) in 9 months period of 2009, which is by 1 545 thous.LVL (2 198 thous.EUR) less than the forecast. Loss after taxes amounts to 1 515 thous.LVL (2 156 thous.EUR).

Commodity output is estimated in the amount of 3 443 thous.LVL (4 899 thous.EUR). The result of 9 months of 2009 is by 2 886 thous.LVL (4 106 thous.EUR) or by 54,4% less than the 9 months result of the previous year.

At present the company exports 98% of its products to the East and West: among them 67% eastwards and 31% westwards; 2% of products are sold on domestic market.

The average statistical number of employees of JSC "Ditton pievadķēžu rūpnīca" was 369 in 9 months of year 2009.

The average salary amounted to 250 LVL (356 EUR) in 9 months period of 2009, which is by 68 LVL (97 EUR) less than in 9 months of 2008.

Market tendencies and development of the company. Risks.

In 9 months of 2009 the activity of the company proceeded in worsening crisis circumstances. The Management Board informed the shareholders on increase of crisis appearances, their reasons and possible consequences in the reports for 1st half of year 2009 and annual report for 2008. No features of crisis appearances termination in the spheres in which the partners of the company work, as well as beginning of recovery can be observed. In these circumstances a certain stabilization of the market only can be estimated as a positive factor.

Unfortunately, the Management Board notices that decrease in demand for the company's production, which first of all is applied in mechanical engineering, exceeded substantially the forecasted indices.

At the same time the Management Board is not alone in its too optimistic forecast about the potential level of drop in production: at the moment the developing economic crisis is unusual in its volumes, factors, levels and consequences, is not (and can not be) studied in a historical retrospection and has no full scientific-economical ground either in respect of terms and intensity, or factors.

While being included into a global and European economics the company was 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 report for 1st half of year 2009.

In the abovementioned circumstances the company is forced 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.

In view of the continuing crisis prognosis for future development of events in economics, on raw material, resources and company's production market, and prognosis for company's future development as well till the end of crisis are unfavorable. At the same time the Management Board notices a definite stabilization of the company.

The Management Board considers it necessary to restrict these negative prognoses of the company's development to the crises period, which according to analysts shall be most critical in 2009 and 2010.

The Management Board considers it as its main task to minimize global crisis risks, maintain 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.

STATEMENT ABOUT MANAGEMENT LIABILITY

According to our information, the presented financial statements for 9 months of year 2009 ended September 30, 2009 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 pievadķēžu rūpnīca". Management report contains truthful information.

Chairman of the Management Board of JSC "Ditton pievadkezu rupnica" Eduards Zavadskis

BALANCE SHEET	30.09.2009	30.09.2008	30.09.2009	30.09.2008
ASSETS
CURRENT ASSETS	LVL	LVL	EUR	EUR
Cash and bank	78 755	45 943	112 058	65 371
Short-term investments	0	0	0	0
Customer receivables
Debts of buyers and customers	3 825 112	5 662 558	5 442 644	8 057 094
Accounts receivable from related
companies	0	0	0	0
Allowance for uncollectible receivables	-835 092	-254 334	-1 188 229	-361 885
Total	2 990 020	5 408 224	4 254 415	7 695 209
Other receivables
Other current receivables	879 639	157 887	1 251 614	224 653
Short-term loans given	0	0	0	0
Derrivative financial instruments	0	0	0	0
Total	879 639	157 887	1 251 614	224 653
Accrued income
Other accrued income	0	0	0	0
Total	0	0	0	0
Prepaid expanses
Prepaid taxes	18 456	104 865	26 261	149 209
Other prepaid expanses	44	0	62	0
Total	18 500	104 865	26 323	149 209
Inventories
Raw materials	903 189	1 465 950	1 285 122	2 085 859
Work-in-progress	250 580	365 944	356 543	520 692
Finished goods	1 097 618	1 069 357	1 561 770	1 521 558
Prepayments to suppliers	462 372	1 205 378	657 896	1 715 098
Total	2 713 759	4 106 629	3 861 331	5 843 207
TOTAL CURRENT ASSETS	6 680 673	9 823 548	9 505 741	13 977 649
NON-CURRENT ASSETS
Long-term financial assets	47 200	0	67 160	0
incl. shares in subsidiaries	47 200	0	67 160	0
Total	47 200	0	67 160	0
Non-current physical assets
Land plots, buildings, equipment, costs	14 028 475	14 220 012	19 960 721	20 233 254
on construction in progress
Other equipment and fixtures	406 567	322 838	578 493	459 357
Accumulated depreciation	-11 121 590	-10 456 992	-15 824 597	-14 878 959
Total	3 313 452	4 085 858	4 714 617	5 813 652
Intangible assets
Purchased licenses, trademarks etc.	119	216	169	308
Goodwill	0	0	0	0
Prepayments for intangible assets	0	0	0	0
Total	119	216	169	308
TOTAL NON-CURRENT ASSETS	3 360 771	4 086 074	4 781 946	5 813 960
TOTAL ASSETS	10 041 444	13 909 622	14 287 687	19 791 609
1 EUR =			0.702804 LVL	0.702804LVL

BALANCE SHEET	30.09.2009	30.09.2008	30.09.2009
LIABILITIES & OWNERS' EQUITY				30.09.2008
SHORT-TERM LIABILITIES	LVL	LVL	EUR	EUR
Debt obligations
Short-term loans from financial	20 184	0	28 719	0
institutions
Derivative financial instruments	0	0	0	0
Short-term capital lease obligations	753	1 577	1 071	2 244
Total	20 937	1 577	29 790	2 244
Customer prepayments for goods and	14 804	24 162	21 064	34 379
services
Creditors	270 835	468 809	385 363	667 055
Total	285 639	492 971	406 427	701 434
Tax payments	383 030	221 452	545 003	315 098
Accrued expenses
Salary-related accrued expanses	86 189	136 636	122 636	194 416
Interest payable	0	0	0	0
Total	86 189	136 636	122 636	194 416
Provisions	31 904	287 410	45 395	408 947
Total	31 904	287 410	45 395	408 947
TOTAL SHORT-TERM	807 699	1 140 046	1 149 251	1 622 139
LIABILITIES
LONG-TERM LIABILITIES
Long-term creditors	1 686 290	1 749 982	2 399 375	2 490 000
Long-terms capital lease obligation	3 367	7 782	4 791	11 073
Deferred tax obligation	27 247	0	38 769	0
Total	30 614	7 782	43 560	11 073
LONG-TERM LIABILITIES
TOTAL	1 716 904	1 757 764	2 442 935	2 501 073
CREDITORS TOTAL	2 524 603	2 897 810	3 592 186	4 123 212
OWNERS' EQUITY	7 400 000	7 400 000	10 529 251	10 529 251
Share capital	0	0	0	0
Paid in capital over par	0	0	0	0
Reserves	0	0	0	0
Other reserves	0	0	0	0
Total	7 400 000	7 400 000	10 529 251	10 529 251
Retained earnings	1 632 282	1 498 082	2 322 528	2 131 579
Net profit for the reporting period	-1 515 441	2 113 730	-2 156 278	3 007 567
Currency translation reserve	0	0	0
TOTAL OWNERS' EQUITY	7 516 841	11 011 812	10 695 501	15 668 397
TOTAL LIABILITIES	10 041 444	13 909 622	14 287 687	19 791 609
1 EUR =			0.702804 LVL	0.702804 LVL

INCOME STATEMENT	30.09.2009 LVL	30.09.2008 LVL	30.09.2009 EUR	30.09.2008 EUR
Net turnover	2 183 465	6 357 555	3 106 791	9 045 986
Other operating income	670 619	1 660 906	954 205	2 363 256
Total income	2 854 084	8 018 461	4 060 996	11 409 242
Direct cost of goods sold or services
rendered	-658 387	-2 251 168	-936 800	-3 203 123
Marketing, advertising and public
relations expenses	-2 171	-5 185	-3 089	-7 378
Bad receivables	0	0	0	0
Operating expenses	-17 339	-116 083	-24 672	-165 171
Salaries, bonuses and social expenses	-1 028 556	-1 906 936	-1 463 503	-2 713 325
Depreciation expense	-575 031	-640 269	-818 195	-911 021
Other expenses	-1 919 099	-785 937	-2 730 632	-1 118 288
Operating expenses	-4 200 583	-5 705 578	-5 976 891	-8 118 306
EBIT	-1 346 499	2 312 883	-1 915 895	3 290 936
Percents paid	-68 772	-88 230	-97 854	-125 540
Financial items
Financial income (except Foreign
Exchange rate difference)	0	0	0	0
Financial costs (except Foreign Exchange
rate difference)	0	0	0	0
Exchange rate +gain / -loss	-3 012	-14 506	-4 286	-20 640
Financial items	-71 784	-102 736	-102 140	-146 180
Profit before extraordinary items and
taxes	-1 418 283	2 210 147	-2 018 035	3 144 756
EBT	-1 418 283	2 210 147	-2 018 035	3 144 756
Provisions for taxes	-97 158	-96 417	-138 243	-137 189
Profit after taxes	-1 515 441	2 113 730	-2 156 278	3 007 567
Net profit	-1 515 441	2 113 730	-2 156 278	3 007 567
Index EPS	-0.205	0.286	-0.292	0.407
1 EUR =			0.702804 LVL	0.702804 LVL

CASH FLOW STATEMENT	30.09.2009 LVL	30.09.2008 LVL	30.09.2009 EUR	30.09.2008 EUR
CASH GENERATED FROM
OPERATIONS	-18 169	-1 699 875	-25 853	-2 418 704
Cash received from customers	-449 863	-4 549 397	-640 097	-6 473 209
Cash received from ML Group	0	0	0	0
Cash paid to suppliers and employees	431 694	2 849 522	614 244	4 054 505
Cash paid to suppliers and employees ML
Group	0	0	0	0
NET CASH USED IN INVESTING
ACIVITIES	60 641	85 554	86 285	121 732
Cash paid for purchasing shares in
subsidiary ML Group	0	0	0	0
Business acquisition	0	0	0	0
Cash paid for purchasing non-current
physical assets	-1 138	-173 025	-1 619	-246 193
Cash paid for purchasing non-current
physical assets ML Group	0	0	0	0
Cash received from the sale of non
current physical assets Participation in other enterprises	14 579 47 200	258 579 0	20 744 67 160	367 925 0
Interest received	0	0	0	0
NET CASH USED IN FINANCING
ACTIVITIES	-47 170	1 479 322	-67 117	2 104 886
Short-term loans received	0	1 569 122	0	2 232 659
Repayment of short-term loans	21 908	0	31 172	0
Cash paid as capital lease payments	-306	-1 570	-435	-2 234
Paid interest	-68 772	-88 230	-97 854	-125 539
Paid interest ML Group	0	0	0	0
TOTAL CASH FLOW	-4 698	-134 999	-6 685	-192 086
Cash and cash equivalents as at the
beginning of period	83 453	180 942	118 743	257 457
Cash and cash equivalents as at the end of
period	78 755	45 943	112 058	65 371
NET INCREASE / DECREASE IN
CASH AND CASH EQUIVALENTS	-4 698	-134 999	-6 685	-192 086
1 EUR =			0.702804 LVL	0.702804 LVL

Statement of changes in equity for the period from 01.01.2009 till 30.09.2009 (LVL)
	Share capital	Share premium	Other reserves	Currency translation reserves	Accumulat ed profit	Current period's profit	Total
	LVL	LVL	LVL	LVL	LVL	LVL	LVL
As at 1st January, 2009	7 400 000	-	-	-	1 632 282	-	9 032 282
Issue of share capital	-	-		- -	-	-	-
Costs of issue of share capital	-	-		- -	-	-	-
Dividend relating to 2008 Allocation of profit of	-	-		- -	-	-	-
2008 to dividends	-	-		- -	-	-	-
Issue of share capital Currency translation	-	-		- -	-	-	-
difference	-	-		- -	-	-	-
Profit for 9 months of 2009	-	-		- -	-	-1 515 441	-1 515 441
As at 30 September, 2009	7 400 000	-	-	-	1 632 282	-1 515 441	7 516 841
As at 1st January, 2008	7 400 000	-	-	-	1 512 882	-	8 912 882
Dividend relating to 2007	-	-		- -	-	-	-
Allocation of profit of 2007 to dividends	-	-		- -	-14 800	-	-14 800
Currency translation difference	-	-		- -	-	-	-
Profit for 9 months of 2008	-	-		- -	-	2 113 730	2 113 730
As at 30 September, 2008	7 400 000	-	-	-	1 498 082	2 113 730	11 011 812

1 EUR = 0,702804 LVL

Statement of changes in equity for the period from 01.01.2009 till 30.09.2009 (EUR)
	Share capital	Share premium	Other reserves	Currency translation	Accumulat ed profit	Current period's	Total
	EUR	EUR	EUR	reserves EUR	EUR	profit EUR	EUR
As at 1st January, 2009 (0.702804)	10 529 251	-	-	-	2 322 528	-	12 851 779
Issue of share capital
Costs of issue of share	-	-	-	-	-	-	-
capital Dividend relating to	-	-	-	-	-	-	-
2008 Allocation of profit of	-	-	-	-	-	-	-
2008 to dividends	-	-	-	-	-	-	-
Issue of share capital Currency translation	-	-	-	-	-	-	-
difference	-	-	-	-	-	-	-
Profit for 9 months period 2009 (0.702804)	-	-	-	-	-	-2 156 278	-2 156 278
As at 30 September,
2009 (0.702804)	10 529 251	-	-	-	2 322 528	-2 156 278	-10 695 501
1st January, 2008 (0.702804)	10 529 251	-	-	-	2 152 639	-	12 681 890
Dividend relating to 2007	-	-	-	-	-	-	-
Allocation of profit of
2007 to dividends Currency translation	-	-	-	-	-21 060	-	-21 060
difference	-	-	-	-	-	-	-
Profit for 9 months period 2008 (0.702804)	-	-	-	-	-	3 007 567	3 007 567
As at 30 September,
2008 (0.702804)	10 529 251	-	-	-	2 131 579	3 007 567	15 668 397

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 pievakezu rupnica" has been prepared in accordance with the source documents and presents fairly the financial position of the JSC as of 30 September 2009 and the results of its operation and cash flows for the 9 months period ended 30 September 2009.

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

The interim financial report for 9 months of 2009 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 9 months of year 2009

	Forecast	9 months of year 2009		Deviation
Name of index	for 2009	forecast	in fact	( + / - )
Production of commodity	7 200	5 380	3 443	-1 937
products
Production of main products	7 182	5 354	3 402	-1 952
Production of driving chains	7 131	5 327	3 363	-1 964
incl. automotive	2 821	2 109	1 350	-759
industrial	4 310	3 218	2 013	-1 205
Sales volume	7 450	5 570	2 183	-3 387
Sales of main products	7 400	5 533	2 171	-3 362
Profit after taxes	35	26	-1 515	-1 541

thous.LVL

thous.EUR 1 EUR = 0,702804 LVL

Name of index		Forecast	9 months of year 2009		Deviation
		for 2009	forecast	in fact	( + / - )
Production of commodity		10 245	7 655	4 899	-2 756
products
Production of main products		10 219	7 618	4 841	-2 777
Production of driving chains		10 147	7 580	4 785	-2 795
	incl. automotive	4 014	3 001	1 921	-1 080
	industrial	6 133	4 579	2 864	-1 715
Sales volume		10 600	7 925	3 106	-4 819
Sales of main products		10 529	7 873	3 089	-4 784
Profit after taxes		50	37	-2 156	-2 193

Explanations and analyses on separate items of financial reports

Production of commodity products in the period of 9 months of year 2009 (thous.LVL/thous.EUR)

Output of commodity products is estimated in the amount 3 443 thous.LVL (4 899 thous.EUR). The result of reporting period is by 2 886 thous.LVL (4 106 thous.EUR) or 54,4% less than in 9 months period of previous year.

Production of driving chains in 9 months of 2009 (thous.meters) Production of driving chains in natural units is by 1 548 thous.meters less than the forecast.

Production of driving chains in 9 months of year 2009 (thous.LVL/thous.EUR) Production of driving chains in money terms is by 1 964 thous.LVL (2 795 thous.EUR) less than the forecast. The actual performance of reporting period is by 2 786 thous.LVL (3 964 thous.EUR) less than in the relevant period of previous year.

Sales (net-turnover) in 9 months of 2009 (thous. LVL/thous.EUR)

Net-turnover has been forecasted to amount to 5 570 thous.LVL (7 925 thous.EUR) in 9 months of year 2009, in fact it has been fulfilled in the amount of 2 183 thous.LVL (3 106 thous.EUR), decrease amounts to 3 387 thous.LVL (4 819 thous.EUR). The actual performance of the reporting period is by 4 175 thous. LVL (5 941 thous.EUR) or 34,3% less than the index of the same period of previous year.

Sales of main products in 9 months of 2009 (thous. LVL/ thous.EUR)

Sales of main products in the reporting period was by 3 362 thous.LVL (4 784 thous.EUR) less than the forecast, and it is by 4 163 thous.LVL (5 923 thous.EUR) or 34,3% less than the result of the relevant period of prior year.

Proceeds from other activities are by 1 041 thous.LVL (1 443 thous.EUR) less than the result of the relevant period of last year and they amounted to 674 thous.LVL (959 thous.EUR).