Invalda INVL — Interim / Quarterly Report 2010

Feb 28, 2011

AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED NOT-AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2010 PREPARED ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

GENERAL INFORMATION

Board of Directors

Mr. Vytautas Bucas (chairman of the Board)
Mr. Dalius Kaziunas
Mr. Darius Sulnis

Management

Mr. Darius Sulnis (president)
Mr. Raimondas Rajeckas (chief financial officer)

Principal place of business and company code

Seimyniskiu Str. 1A,
Vilnius,
Lithuania
Company code 121304349

Bankers

AB DnB Nord Bankas
Nordea Bank Finland Plc Lithuania Branch
AB Bankas Snoras
AB Siauliu Bankas
Danske Bank A/S Lithuania Branch
AB bankas Finasta
UAB Medicinos Bankas
AB SEB Bankas
AS UniCredit Bank Lithuania Branch

The financial statements were approved and signed by the Management and the Board of Directors on 28 February 2011. Audit or review of the financial statements was not performed.

Mr. Darius Sulnis
President

Mr. Raimondas Rajeckas
Chief financial officer

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Interim consolidated and Parent Company's income statements

	Group		Company
	2010	2009	2010	2009
Continuing operations	Unaudited	Audited	Unaudited	Audited
Revenue
Furniture production revenue	197,214	148,966	-	-
Residential real estate revenue	7,430	8,207	-	-
Rent and other real estate revenue	28,324	28,120	-	-
Information technology revenue	27,605	25,378	-	-
Other production and services revenue	7,582	6,651	-	-
Total revenue	268,155	217,322	-	-
Other income	9.3	4,380	4,012	8,397
Net gains (losses) on disposal of subsidiaries, associates and joint ventures	8	15,350	3,813	(18,013)
Net gains (losses) from fair value adjustments on investment property		1,236	(72,358)	-
Net changes in fair value on financial assets	9.1	(4,486)	(1,357)	3,337
Changes in inventories of finished goods and work in progress		1,597	3,154	-
Raw materials and consumables used		(143,557)	(111,056)	(25)
Changes in residential real estate		(6,280)	(7,988)	-
Employee benefits expenses		(35,852)	(33,832)	(1,911)
Impairment, write-down, allowances and provisions		(4,337)	(39,199)	10,897
Premises rent and utilities		(17,128)	(15,728)	(178)
Depreciation and amortisation		(10,428)	(10,120)	(102)
Repair and maintenance of premises		(9,972)	(8,734)	(1)
Other operating expenses		(14,440)	(14,722)	(887)
Operating profit (loss)		44,238	(86,793)	1,514
Finance costs	9.2	(17,960)	(31,199)	(13,160)
Share of profit (loss) from associates and joint ventures		24,735	10,432	-
Profit (loss) before income tax		51,013	(107,560)	(11,646)
Income tax	7	(288)	15,837	1,190
Profit (loss) for the period from continuing operations		50,725	(91,723)	(10,456)
Discontinued operation
Profit/(Loss) after tax for the period from a discontinued operation	10	-	6,070	-
PROFIT (LOSS) FOR THE PERIOD		50,725	(85,653)	(10,456)
Attributable to:
Equity holders of the parent		40,723	(88,596)	(10,456)
Non-controlling interests		10,002	2,943	-
		50,725	(85,653)	(10,456)
Basic earnings (deficit) per share (in LTL)		0.80	(2.08)	(0.21)
Basic earnings (deficit) per share (in LTL) for continuing operations		0.80	(2.22)	(0.21)
Diluted earnings (deficit) per share (in LTL)		0.77	(2.08)	(0.21)
Diluted earnings (deficit) per share (in LTL) ) for continuing operations		0.77	(2.22)	(0.21)

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Interim consolidated and Parent Company's statements of comprehensive income

	Group		Company
	2010
Unaudited
50,725	2009
Audited
(85,653)	2010
Unaudited
(10,456)	2009
Audited
(121,798)
PROFIT (LOSS) FOR PERIOD
Continuing operation
Net gain (loss) on cash flow hedge	191	(47)	-	-
Income tax	(29)	8	-	-
	162	(39)	-	-
Net gain (loss) on available-for-sale financial assets	11	286	-	-
Reclassification adjustment for gain (loss) included in profit or loss	(221)	(76)	-	-
Income tax	42	(42)	-	-
	(168)	168	-	-
Exchange differences on translation of foreign operations	-	293	-	-
Share of other comprehensive income of associates	4,596	(2,732)	-	-
Other comprehensive income for the period from continuing operation	4,590	(2,310)	-	-
Discontinued operations
Net gain (loss) on available-for-sale financial assets	-	209	-	-
Reclassification adjustment for gain (loss) included in profit or loss	-	1,219	-	-
Income tax	-	(114)	-	-
Other comprehensive income for the period from discontinued operations	-	1,314	-	-
Other comprehensive income for the period, net of tax	4,590	(996)	-	-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX	55,315	(86,649)	(10,456)	(121,798)
Attributable to:
Equity holders of the parent	45,313	(89,592)	(10,456)	(121,798)
Non-controlling interests	10,002	2,943	-	-

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Interim consolidated and Parent Company's income statements

	Group		Company
	IV Quarter 2010	IV Quarter 2009	IV Quarter 2010	IV Quarter 2009
Continuing operations	Unaudited		Unaudited
Revenue
Furniture production revenue	55,640	43,589	-	-
Residential real estate revenue	1,634	2,460	-	-
Rent and other real estate revenue	8,056	7,062	-	-
Information technology revenue	10,403	7,544	-	-
Other production and services revenue	2,308	1,586	-	-
Total revenue	78,041	62,241	-	-
Other income	639	895	2,034	1,888
Net gains (losses) on disposal of subsidiaries, associates and joint ventures	-	(3,442)	-	(3,441)
Net gains (losses) from fair value adjustments on investment property	1,336	(72,110)	-	-
Net changes in fair value on financial assets	902	595	-	(417)
Changes in inventories of finished goods and work in progress	(267)	3,370	-	-
Raw materials and consumables used	(41,861)	(34,447)	(6)	(5)
Changes in residential real estate	(1,478)	(2,879)	-	-
Employee benefits expenses	(11,107)	(8,468)	(594)	(438)
Impairment, write-down, allowances and provisions	(368)	14,747	(3,225)	(76,050)
Premises rent and utilities	(4,726)	(4,362)	(54)	(51)
Depreciation and amortisation	(2,705)	(2,547)	(19)	(30)
Repair and maintenance of premises	(3,120)	(68)	-	-
Other operating expenses	(5,070)	(4,513)	(325)	1,494
Operating profit (loss)	10,216	(50,988)	(2,189)	(77,050)
Finance costs	(4,126)	(7,189)	(3,228)	(4,844)
Share of profit (loss) from associates and joint ventures	5,934	9,069	-	-
Profit (loss) before income tax	12,024	(49,108)	(5,417)	(81,894)
Income tax	756	14,778	288	478
Profit (loss) for the period from continuing operations	12,780	(34,330)	(5,129)	(81,416)
Discontinued operation
Profit/(Loss) after tax for the period from a discontinued operation	-	-	-	-
PROFIT (LOSS) FOR THE PERIOD	12,780	(34,330)	(5,129)	(81,416)
Attributable to:
Equity holders of the parent	8,435	(36,146)	(5,129)	(81,416)
Non-controlling interests	4,345	1,816	-	-
	12,780	(34,330)	(5,129)	(81,416)
Basic earnings (deficit) per share (in LTL)	0.16	(0.85)	(0.10)	(1.91)
Basic earnings (deficit) per share (in LTL) for continuing operations	0.16	(0.85)	(0.10)	(1.91)
Diluted earnings (deficit) per share (in LTL)	0,15	(0.85)	(0.10)	(1.91)
Diluted earnings (deficit) per share (in LTL) ) for continuing operations	0,15	(0.85)	(0.10)	(1.91)

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Interim consolidated and Parent Company's statements of comprehensive income

	Group		Company
	IV Quarter 2010	IV Quarter 2009	IV Quarter 2010	IV Quarter 2009
PROFIT (LOSS) FOR PERIOD	Unaudited		Unaudited
	12,780	(34,330)	(5,129)	(81,416)
Continuing operation
Net gain (loss) on cash flow hedge	55	50	-	-
Income tax	(9)	(12)	-	-
	46	38	-	-
Net gain (loss) on available-for-sale financial assets	-	276	-	-
Reclassification adjustment for gain (loss) included in profit or loss	-	(2)	-	-
Income tax	-	(40)	-	-
	-	234	-	-
Exchange differences on translation of foreign operations	-	-	-	-
Share of other comprehensive income of associates	493	1,728	-	-
Other comprehensive income for the period from continuing operation	539	2,000	-	-
Discontinued operations
Net gain (loss) on available-for-sale financial assets	-	-	-	-
Reclassification adjustment for gain (loss) included in profit or loss	-	-	-	-
Income tax	-	-	-	-
Other comprehensive income for the period from discontinued operations	-	-	-	-
Other comprehensive income for the period, net of tax	539	2,000	-	-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX	13,319	(32,330)	(5,129)	(81,416)
Attributable to:
Equity holders of the parent	8,974	(34,146)	(5,129)	(81,416)
Non-controlling interests	4,345	1,816

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Interim consolidated and Parent Company's statements of financial position

	Group		Company
		As at 31 December 2010	As at 31 December 2009	As at 31 December 2010	As at 31 December 2009
ASSETS		Unaudited	Audited	Unaudited	Audited
Non-current assets
Property, plant and equipment		38,874	43,709	238	212
Investment properties		240,573	263,775	-	-
Intangible assets		10,490	8,863	12	1
Investments into subsidiaries	8	-	-	87,386	81,311
Investments into associates and joint ventures	8	196,655	169,436	135,919	136,450
Investments available-for-sale		1,818	1,818	1,817	1,817
Loans granted		-	-	1,192	1,092
Other non-current assets		2,848	2,848	-	-
Deferred income tax asset		6,667	4,963	4,349	4,144
Total non-current assets		497,925	495,412	230,913	225,027
Current assets
Inventories		27,618	41,837	-	-
Trade and other receivables		29,591	21,131	988	1
Current loans granted		22,303	28,959	73,386	78,396
Prepaid income tax		15	51	-	-
Prepayments and deferred charges		1,583	2,014	26	29
Investments available-for-sale		-	995	-	-
Financial assets held-for-trade		8,446	10,743	1,512	3,269
Restricted cash		4,173	5,475	-	-
Cash and cash equivalents	5	4,393	3,486	202	94
Total current assets		98,122	114,691	76,114	81,789
Total assets		596,047	610,103	307,027	306,816

(cont'd on the next page)

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Consolidated and Parent Company's statements of financial position (cont'd)

	Group		Company
		As at 31 December 2010	As at 31 December 2009	As at 31 December 2010	As at 31 December 2009
EQUITY AND LIABILITIES		Unaudited	Audited	Unaudited	Audited
Equity
Equity attributable to equity holders of the parent
Share capital	11	51,660	42,569	51,660	42,569
Share premium	11	44,676	50,588	44,676	50,588
Reserves		20,410	76,490	-	73,383
Retained earnings (accumulated deficit)		57,517	(90,978)	(10,456)	(120,204)
		174,263	78,669	85,880	46,336
Non-controlling interests		24,625	13,041	-	-
Total equity		198,888	91,710	85,880	46,336
Liabilities
Non-current liabilities
Non-current borrowings	11	118,645	28,722	94,350	4,061
Financial lease liabilities		450	103	-	-
Government grants		-	5	-	-
Provisions		480	480	-	-
Deferred income tax liability		14,830	14,900	-	-
Derivative financial instruments		-	122	-	-
Convertible bonds	11	32,440	-	32,440	-
Other non-current liabilities		935	-	-	-
Total non-current liabilities		167,780	44,332	126,790	4,061
Current liabilities
Current portion of non-current borrowings	11	125,553	268,199	-	101,046
Current portion of financial lease liabilities		228	162	-	-
Current borrowings	11	59,611	73,039	90,855	67,789
Trade payables		31,357	28,679	739	642
Income tax payable		676	5,099	-	-
Provisions		345	1,616	250	1,466
Advances received		1,508	2,017	-	-
Derivative financial instruments		163	233	-	-
Convertible bonds	11	-	83,056	-	83,056
Other current liabilities		9,938	11,961	2,513	2,420
Total current liabilities		229,379	474,061	94,357	256,419
Total liabilities		397,159	518,393	221,147	260,480
Total equity and liabilities		596,047	610,103	307,027	306,816

(the end)

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AB INVALDA

CONSOLIDATED AND PARENT COMPANY'S INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Consolidated and Parent Company's statements of changes in equity

Group	Equity attributable to equity holders of the parent
	Share capital	Share premium	Reserves			Retained earnings (accumulated deficit)	Discontinued operations	Subtotal	Non-controlling interests
			Fair value reserves	Legal and other reserves	Foreign currency translation reserve
Balance as at 31 December 2008	42,569	50,588	(1,576)	75,947	(293)	750	-	167,985	9,705
Total comprehensive income for the year ended 31 December of 2009	-	-	129	-	293	(91,328)	1,314	(89,592)	2,943
Non-controlling interests acquired	-	-	-	-	-	(13)	-	(13)	(7)
Investments in subsidiaries	-	-	-	-	-	-	-	-	338
Share based payments	-	-	-	289	-	-	-	289	72
Changes in reserves	-	-	-	824	-	(671)	(153)	-	-
Sales of subsidiaries	-	-	-	-	-	284	(284)	-	(10)
Discontinued operation	-	-	1,314	(437)	-	-	(877)	-	-
Balance as at 31 December 2009	42,569	50,588	(133)	76,623	-	(90,978)	-	78,669	13,041
Group	Equity attributable to equity holders of the parent
---	---	---	---	---	---	---	---	---	---
	Share capital	Share premium	Reserves			Retained earnings (accumulated deficit)	Subtotal	Non-controlling interests	Total equity
			Fair value reserves	Legal and other reserves	Foreign currency translation reserve
Balance as at 31 December 2009	42,569	50,588	(133)	76,623	-	(90,978)	78,669	13,041	91,710
Total comprehensive income for the year ended 31 December of 2010	-	-	(6)	-	-	45,319	45,270	10,044	55,314
Sales of subsidiaries	-	-	-	(211)	-	211	-	7	7
Acquisition of subsidiaries	8	-	-	-	-	-	-	1,505	1,505
Share based payments	-	-	-	281	-	-	281	70	351
Changes in reserves	-	(46,821)	-	(56,144)	-	102,965	-	-	-
Increase of share capital	11	9,091	40,909	-	-	-	50,000	-	50,000
Balance as at 31 December 2010	51,660	44,676	(139)	20,549	-	57,517	174,263	24,625	198,888

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Consolidated and Parent Company's statements of changes in equity (cont'd)

Company	Share capital	Share premium	Reserves		Retained earnings (accumulated deficit)	Total
			Legal reserve	Reserve of purchase of own shares
Balance as at 31 December 2008	42,569	50,588	4,257	69,126	1,594	168,134
Total comprehensive income for the year ended 31 December of 2009	-	-	-	-	(121,798)	(121,798)
Balance as at 31 December 2009	42,569	50,588	4,257	69,126	(120,204)	46,336
Company	Share capital	Share premium	Reserves		Retained earnings (accumulated deficit)	Total
			Legal reserve	Reserve of purchase of own shares
Balance as at 31 December 2009	42,569	50,588	4,257	69,126	(120,204)	46,336
Total comprehensive income for the year ended 31 December of 2010	-	-	-	-	(10,456)	(10,456)
Changes in reserves	-	(46,821)	(4,257)	(69,126)	120,204	-
Increase of share capital	9,091	40,909	-	-	-	50,000
Balance as at 31 December 2010 (unaudited)	51,660	44,676	-	-	(10,456)	85,880

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Consolidated and Parent Company's statements of cash flows

	Group		Company
	2010	2009	2010	2009
	Unaudited	Audited	Unaudited	Audited
Cash flows from (to) operating activities
Net profit (loss) for the period	50,725	(85.653)	(10,456)	(121,798)
Adjustments for non-cash items and non-operating activities:
Valuation (gain) loss, net	(1,236)	72.358	-	-
Depreciation and amortization	10,428	10.636	102	130
(Gain) loss on disposal of tangible assets	130	245	(43)	(2)
Realized and unrealized loss (gain) on investments	4,486	(761)	(3,337)	9,825
(Gain) loss on disposal of subsidiaries, associates	(15,350)	(20.347)	18,013	-
Share of net loss (profit) of associates and joint ventures	(24,735)	(10.432)	-	-
Interest (income)	(1,730)	(3.908)	(8,030)	(12,469)
Interest expenses	17,351	31.852	13,144	22,429
Deferred taxes	(5,124)	(21.167)	(1,190)	(3,252)
Current income tax expenses	5,412	4.056	-	-
Allowances	4,337	38.908	(9,681)	108,723
Change in provisions	(55)	1.969	(1,216)	-
Share based payment	351	361	-	-
Dividend (income)	-	-	(300)	(9,000)
Loss (gain) from other financial activities	(996)	293	-	86
	43,994	18,410	(2,994)	(5,328)
Changes in working capital:
(Increase) decrease in inventories	(233)	7,739	-	-
Decrease (increase) in trade and other receivables	(2,499)	866	(2)	(1)
Decrease (increase) in other current assets	460	(463)	3	38
(Decrease) increase in trade payables	206	2,086	5	(485)
(Decrease) increase in other current liabilities	(352)	(1,887)	226	74
Cash flows (to) from operating activities	41,576	26,751	(2,762)	(5,702)
Income tax (paid) return	(6,743)	740	-	500
Net cash flows (to) from operating activities	34,833	27,491	(2,762)	(5,202)

(cont'd on the next page)

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Consolidated and Parent Company's statements of cash flows (cont'd)

	Group		Company
	2010	2009	2010	2009
Cash flows from (to) investing activities	Unaudited	Audited	Unaudited	Audited
(Acquisition) of non-current assets (except investment properties)	(3,522)	(3,757)	(157)	(32)
Proceeds from sale of non-current assets (except investment properties)	128	486	66	7
(Acquisition) of investment properties	(746)	(98)	-	-
Proceeds from sale of investment properties	484	3,262	-	-
(Acquisition) and establishment of subsidiaries, net of cash acquired	(1,993)	-	(60)	-
Proceeds from sales of subsidiaries, net of cash disposed	50	12,643	57	48,779
(Acquisition) of associates and joint ventures	-	(123)	-	(129)
Proceeds from sales of associates and joint ventures	-	83,119	-	84,423
Loans (granted)	(10,995)	(15,515)	(25,478)	(49,391)
Repayment of granted loans	13,114	29,978	27,048	45,222
Dividends received	-	-	300	-
Interest received	315	2,572	48	3,093
(Acquisition) of and proceeds from sales of held-for-trade and available-for-sale investments	4,981	(14,984)	4,689	(645)
Additionally investments of the Company to subsidiaries	-	-	-	(6,819)
Net cash flows (to) investing activities	1,816	97,583	6,513	124,508
Cash flows from (to) financing activities
Cash flows related to Group owners
(Acquisition) and changes of non-controlling interests and increase of share capital	-	318	-	-
Dividends (paid) to equity holders of the parent	(59)	(69)	(59)	(69)
	(59)	249	(59)	(69)
Cash flows related to other sources of financing
Proceeds from loans	13,958	37,761	29,179	34,799
(Repayment) of loans	(31,376)	(165,296)	(20,933)	(137,850)
Interest (paid)	(17,798)	(22,393)	(11,830)	(16,031)
Financial lease (payments)	(523)	(257)	-	-
Transfer (to)/from restricted cash	56	10,131	-	-
Other cash flows from financing activities	-	-	-	(73)
	(35,683)	(140,054)	(3,584)	(119,155)
Net cash flows (to) from financial activities	(35,742)	(139,805)	(3,643)	(119,224)
Net (decrease) increase in cash and cash equivalents	907	(14,731)	108	82
Cash and cash equivalents at the beginning of the period	5	3,486	18,217	94
Cash and cash equivalents at the end of the period	5	4,393	3,486	202

(the end)

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

Notes to the interim condensed financial statements

1 General information

AB Invalda (hereinafter the Company) is a joint stock company registered in the Republic of Lithuania on 20 March 1992. The address of its registered office is Seimyniskiu Str. 1A, Vilnius, Lithuania.

AB Invalda is incorporated and domiciled in Lithuania. AB Invalda is one of the major Lithuanian investment companies whose primary objective is to steadily increase the investor equity value. For the purpose of attainment of this objective Invalda actively manages its investments, exercising control or significant influence over target businesses. AB Invalda concentrates on the priority segments, such as pharmaceutical, road and bridge construction, furniture manufacturing, real estate and facilities management, and IT infrastructure. The activities and assets of key associates of the Company representing pharmaceutical and road and bridge construction segments are concentrated in Poland. In respect of each business the Company defines its performance objectives, sets up the management team, participates in the development of the business strategy and monitors its implementation. The company plays an active role in passing decisions on strategic and other important issues that have an effect upon the value of the Group companies.

The Company's shares are listed on the Baltic Main List of NASDAQ OMX Vilnius.

2 Basis of preparation and accounting policies

Basis of preparation

The interim condensed financial statements for the year ended 31 December 2010 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2009.

Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Group's and Company's annual financial statements for the year ended 31 December 2009, except adoption of new Standards and Interpretations as of 1 January 2010, noted below.

IAS 27 Consolidated and Separate Financial Statements (Revised) (effective for annual periods beginning on or after 1 July 2009).

The revised IAS 27 requires an entity to attribute total comprehensive income to the owners of the parent and to the non-controlling interests (previously "minority interests") even if this results in the non-controlling interests having a deficit balance (the previous standard required the excess losses to be allocated to the owners of the parent in most cases). The revised standard specifies that changes in a parent's ownership interest in a subsidiary that do not result in the loss of control must be accounted for as equity transactions. It also specifies how an entity should measure any gain or loss arising on the loss of control of a subsidiary. At the date when control is lost, any investment retained in the former subsidiary has to be measured at its fair value. The amendment does not result in a material impact on financial statements as the Company and the Group were previous using the treatment determined in revised IAS 27 with two exceptions. First, at the end of a year 2009 was not attributed to the minority interests of UAB Aikstentis net losses equal to 2,343 LTL thousand.. Not attributed part of net losses is not revised, because the standard is applicable prospectively, and due to the sale of UAB Broner net profit of 2,316 LTL thousand was attributed to non-controlling interests. Second, acquisition of non-controlling interests in cash (318 LTL thousand) was reclassified from investing to financing cash flows in the statement of cash flows for the year ended 31 December 2009.

13

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AB INVALDA
INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010
(all amounts are in LTL thousand unless otherwise stated)

2 Basis of preparation (cont'd)

IFRS 3 Business Combinations (Revised) (effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009).

The revised IFRS 3 will allow entities to choose to measure non-controlling interests using the existing IFRS 3 method (proportionate share of the acquiree's identifiable net assets) or at fair value. The revised IFRS 3 is more detailed in providing guidance on the application of the purchase method to business combinations. The requirement to measure at fair value every asset and liability at each step in a step acquisition for the purposes of calculating a portion of goodwill has been removed. Instead, in a business combination achieved in stages, the acquirer have to remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss for the year. Acquisition-related costs are accounted for separately from the business combination and therefore recognised as expenses rather than included in goodwill. An acquirer has to recognise at the acquisition date a liability for any contingent purchase consideration. Changes in the value of that liability after the acquisition date are recognised in accordance with other applicable IFRSs, as appropriate, rather than by adjusting goodwill. The revised IFRS 3 brings into its scope business combinations involving only mutual entities and business combinations achieved by contract alone. The amendment does not impact the interim financial statements for the year ended 31 December 2010, except disclosures in Note 8. Accordingly, assets and liabilities arising from business combinations prior to the date of application of the revised standards are not restated.

Amendments to IFRS 2 Share-based Payment - Group cash-settled and share-based payment transactions (effective for financial years beginning on or after 1 January 2010)

The amendments provide a clear basis to determine the classification of share-based payment awards in both consolidated and separate financial statements. The amendments incorporate into the standard the guidance in IFRIC 8 and IFRIC 11, which are withdrawn. The amendments expand on the guidance given in IFRIC 11 to address plans that were previously not considered in the interpretation. The amendments also clarify the defined terms in the Appendix to the standard. The amendment does not impact the interim financial statements for the year ended 31 December 2010.

Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items (effective for financial years beginning on or after 1 July 2009)

The amendment addresses the designation of a one-sided risk in a hedged item, and the designation of inflation as a hedged risk or portion in particular situations. It clarifies that an entity is permitted to designate a portion of the fair value changes or cash flow variability of a financial instrument as hedged item. The amendment has no impact on the financial position or performance of the Group, as the Group has not entered into any such hedges.

Improvements to IFRSs

In May 2008 and April 2009 IASB issued its first omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. Most of the changes are effective for financial years beginning on or after 1 January 2010, unless stated otherwise. These amendments to standards have no material effect on the financial statements.

• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Clarification that all of a subsidiary's assets and liabilities are classified as held for sale, even when the entity will retain a non-controlling interest in the subsidiary after the sale. This amendment is effective for periods commencing 1 July 2009. Other amendment clarifies that the disclosures required in respect of non-current assets and disposal groups classified as held for sale or discontinued operations are only those set out in IFRS 5. The disclosure requirements of other IFRSs only apply if specifically required for such non-current assets or discontinued operations.
• IFRS 2 Share-based payments: The amendment clarifies that contributions of businesses in common control transactions and formation of joint ventures are not within the scope of IFRS 2.
• IFRS 8 Operating Segment Information: clarifies that segment assets and liabilities need only be reported when those assets and liabilities are included in measures that are used by the chief operating decision maker.
• IAS 1 Presentation of Financial Statements: allows classification of certain liabilities settled by entity's own equity instruments as non-current.
• IAS 7 Statement of Cash Flows: explicitly states that only expenditure that results in recognising an asset can be classified as a cash flow from investing activities.
• IAS 17 Leases: allows classification of certain long-term land leases as finance leases under IAS 17 even without transfer of ownership of the land at the end of the lease.
• IAS 18 Revenue: The Board has added guidance (which accompanies the standard) to determine whether an entity is acting as a principal or as an agent.

14

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

2 Basis of preparation (cont'd)

Improvements to IFRSs (cont'd)

• IAS 36 Impairment of Assets: The amendment clarified that the largest unit permitted for allocating goodwill, acquired in a business combination, is the operating segment as defined in IFRS 8 before aggregation for reporting purposes.
• IAS 38 Intangible Assets: The amendment supplements IAS 38 regarding measurement of fair value of intangible assets acquired in a business combination.
• IAS 39 Financial Instruments: Recognition and Measurement: amending IAS 39 (i) to include in its scope option contracts that could result in business combinations, (ii) to clarify the period of reclassifying gains or losses on cash flow hedging instruments from equity to profit or loss for the year and (iii) to state that a prepayment option is closely related to the host contract if upon exercise the borrower reimburses economic loss of the lender.
• IFRIC 9 Reassessment of Embedded Derivatives: This amendment states that embedded derivatives in contracts acquired in common control transactions and formation of joint ventures are not within its scope.
• IFRIC 16 Hedge of a Net Investment in a Foreign Operation: The amendment removes the restriction in IFRIC 16 that hedging instruments may not be held by the foreign operation that itself is being hedged.

IFRIC 12 Service Concession Arrangements (effective for financial years beginning on or after 30 March 2009).

This interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. No member of the Group is an operator and, therefore, this interpretation has no impact on the Group.

IFRIC 15 Agreements for the Construction of Real Estate (effective for financial years beginning after 31 December 2009)

The interpretation clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the interpretation provides guidance on how to determine whether an agreement is within the scope of IAS 11 or IAS 18. The interpretation does not impact the interim financial statements for the year ended 31 December 2010.

IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective for financial years beginning on or after 30 June 2009)

The interpretation provides guidance on the accounting for a hedge of a net investment in a foreign operation. IFRIC 16 does not have an impact on the consolidated financial statements because the Group does not have hedges of net investments.

IFRIC 17 Distributions of Non-cash Assets to Owners (effective for financial years beginning after 31 October 2009)

The interpretation provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders. The interpretation clarifies when to recognise a liability, how to measure it and the associated assets, and when to derecognise the asset and liability. IFRIC 17 does not have an impact on the consolidated financial statements because the Group does not distribute non-cash assets to owners in the past.

IFRIC 18 Transfers of Assets from Customers (effective for transfers of assets received after 31 October 2009).

The Interpretation provides guidance on accounting for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). The interpretation does not impact the interim financial statements for the year ended 31 December 2010.

IFRS 1 First-time Adoption of International Financial Reporting Standards (Revised) (restructured IFRS 1 is effective for annual periods beginning after 31 December 2009)

The revised IFRS 1 retains the substance of its previous version but within a changed structure in order to make it easier for the reader to understand and to better accommodate future changes. The revised standard does not have any effect on the Group's financial statements.

Amendments to IFRS 1 Additional Exemptions for First-time Adopters (effective for annual periods beginning on or after 1 January 2010)

The amendments exempt entities using the full cost method from retrospective application of IFRSs for oil and gas assets and also exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with IFRIC 4, 'Determining Whether an Arrangement Contains a Lease' when the application of their national accounting requirements produced the same result. The amendments do not have any effect on the Group's financial statements.

15

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

3 Seasonality of operations and other recurring discrepancies in quarters

Road and bridge building business gives usually a lower revenue and operational profit in the 1st and 4th quarter in a contrast to the 2nd and the 3rd quarters. Historically information technology segment earned a bigger revenue and operational profit in the 4th quarter.

4 Segment information

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocations and performance assessment. Segment performance is evaluated based on net profit or loss and it is measured on the same basis as net profit or loss in the financial statements. Group financing (including finance costs and finance revenue) and income taxes are allocated between segments as they are identified on basis of separate legal entities. Between segments consolidation adjustments and eliminations are not allocated on a segment basis.

For the management purposes, the Group is organised into following segments:

Real estate and facilities management

The real estate segment is involved in investment in a real estate, real estate management and administration, facilities management, construction management, intermediation in buying, selling and renting real estate.

Pharmaceutical

The pharmaceutical segment produces generic injectables, tablets, ointments and eye drops and pre-filled syringes and sells own products and provides toll manufacturing services.

Furniture production

The furniture segment includes flat-pack furniture mass production and sale.

Road and bridge construction

The road and bridge construction segment is involved in:

• management of the design, construction, and repair of bridges, viaducts, and flyovers.
• management of the tunnels design, construction and renovation. Tunnel engineering network construction and renovation.
• production and sale of asphalt concrete and reinforced concrete.
• production of and trade in materials for road construction.
• installation of water supply systems, sewer systems, rain water drainage systems and water treatment equipment. Selection of engineering systems, design and project coordination services, the construction and installation of water treatment systems, technical and and technological supervision services during construction work and system testing and operating services.
• management of the design, repair and surface regeneration work of airport taxiways, runways, ramps, aircraft parking areas, and special areas.
• management of railroad design, construction and the repair of railroads, dismantling of railroads, utilisation of fouled track ballast, and the installation of new sections of railroad.
• management of the design, construction, and repair of sea and river port quays, embankments, docks, berth structures, piers, closing dikes, and pavement.

Information technology infrastructure

The information technology infrastructure segment is involved in offering IT infrastructure strategy, security and maintenance solutions, and supplies of all hardware and software, needed for IT infrastructure solutions of any size.

Other production and service segments

The other production and service segment is involved in hardware articles production, road signs production, wood manufacturing and other activities.

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

4 Segment information (cont'd)

The following table present revenues and profit information regarding the Group's business segments for the year ended 31 December 2010:

Period ended31 December 2010	Real estate and facilities management	Pharma- ceutical	Furniture production	Road and bridge construction	Information technology infrastructure	Other production and service	Elimi- nation	Total continuing operations
Revenue
Sales to external customers	35,754	-	197,214	-	27,605	7,582	-	268,155
Inter-segment sales	682	-	-	-	79	12	(773)	-
Total revenue	36,436	-	197,214	-	27,684	7,594	(773)	268,155
Results
Other income	696	-	3,024	-	232	10,096	(9,668)	4,380
Net gains (losses) from fair value adjustments on investment property	1,236	-	-	-	-	-	-	1,236
Net gains (losses) on disposal of subsidiaries, associates and joint ventures	15,215	-	-	-	-	135	-	15,350
Net changes in fair value on financial assets	-	-	-	-	-	(4,486)	-	(4,486)
Segment expenses	(43,187)	-	(167,522)	-	(28,501)	(25,251)	10,441	(254,020)
Impairment, write-down and allowance	(11,132)	-	-	-	-	6,795	-	(4,337)
Share of profit (loss) of the associates and joint ventures	1,226	14,144	-	10,073	-	(708)	-	24,735
Profit (loss) before income tax	490	14,144	32,716	10,073	(585)	(5,825)	-	51,013
Income tax	2,903	-	(4,889)	-	(74)	1,772	-	(288)
Net profit (loss) for the period	3,393	14,144	27,827	10,073	(659)	(4,053)	-	50,725
Attributable to:
Equity holders of the parent	1,080	14,144	20,037	10,073	(527)	(4,084)	-	40,723
Non-controlling interests	2,313	-	7,790	-	(132)	31	-	10,002

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

4 Segment information (cont'd)

The following table present revenues and profit information regarding the Group's business segments for the year ended 31 December 2009:

Period ended31 December 2009	Real estate and facilities management	Pharmaceutical	Furniture production	Road and bridge construction	Information technology infrastructure	Other production and service	Elimination	Total continuing operations
Revenue
Sales to external customers	36,327	-	148,966	-	25,378	6,651	-	217,322
Inter-segment sales	714	-	-	-	158	-	(872)	-
Total revenue	37,041	-	148,966	-	25,536	6,651	(872)	217,322
Results
Other income	827	-	2,077	-	654	12,232	(11,778)	4,012
Net gains (losses) from fair value adjustments on investment property	(72,277)	-	-	-	-	(81)	-	(72,358)
Net gains (losses) on disposal of subsidiaries, associates and joint ventures	(3,996)	-	(1,102)	-	-	8,911	-	3,813
Net changes in fair value on financial assets	-	-	-	-	-	(1,357)	-	(1,357)
Segment expenses	(50,171)	-	(131,242)	-	(27,628)	(35,689)	14,505	(230,225)
Impairment, write-down, allowances and provisions	(38,437)	-	546	-	-	(1,308)	-	(39,199)
Share of profit (loss) of the associates and joint ventures	(6,405)	4,734	-	13,285	-	(1,182)	-	10,432
Profit (loss) before income tax	(133,418)	4,734	19,245	13,285	(1,438)	(11,823)	1,855	(107,560)
Income tax	16,767	-	(3,655)	-	(159)	2,884	-	15,837
Net profit (loss) for the period	(116,651)	4,734	15,590	13,285	(1,597)	(8,939)	1,855	(91,723)
Attributable to:
Equity holders of the parent	(115,763)	4,734	11,226	13,285	(1,063)	(8,940)	1,855	(94,666)
Non-controlling interests	(888)	-	4,364	-	(534)	1	-	2,943

The following table represents segment assets of the Group operating segments as at 31 December 2010 and 31 December 2009:

Segment assets	Real estate and facilities management	Pharmaceutical	Furniture production	Road and bridge construction	Information technology infrastructure	Other production and service	Elimination	Total continuing operations
At 31 December 2010	272,204	124,782	108,418	71,298	16,278	99,939	(96,872)	596,047
At 31 December 2009	306,563	108,763	77,990	58,502	14,587	131,291	(87,593)	610,103

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AB INVALDA
INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010
(all amounts are in LTL thousand unless otherwise stated)

5 Cash and cash equivalents

	Group		Company
	31 December 2010	31 December 2009	31 December 2010	31 December 2009
Cash at bank	4,327	3,476	202	94
Cash in hand	66	10	-	-
	4,393	3,486	202	94

6 Dividends

In 2009 and 2010 dividends were not declared.

7 Income tax

	Group		Company
	2010	2009	2010	2009
Components of income tax expense
Current income tax charge	(5,424)	(4,161)	-	-
Previous year income tax adjustments	12	135	-	-
Deferred income tax income (expense)	5,124	19,863	1,190	3,252
Income tax (expenses) income charged to the income statement	(288)	15,837	1,190	3,252

8 Investment into subsidiaries and associates

Disposal of subsidiaries attributable to the Real estate segment

On 31 March 2010 the Group sold shares of Lithuanian real estate investors UAB Broner, UAB Nerijos bustas, UAB Saules investicija (all mentioned ones are the subsidiaries) and Latvian SIA Dommo grupa (latter mentioned is the associate). Each company was sold for 1 LTL. All of these companies are in the process of being filed for bankruptcy. Until the issue of these financial statements the decisions of courts regarding insolvency of these companies came into law. The projects became unfeasible because of the change in market situation, bank's decision to cease financing and its refusal to search for constructive solutions in regard to realization of the assets. On 31 May 2010 the Group sold shares of a subsidiary UAB BNN for 1 LTL (the subsidiary is related with a project, which was developed by the above mentioned companies). The Company suffered loss of LTL 19,731 thousand, but there was reversed allowance of the same amount (LTL 19,731 thousand), which was recognised in 2008 and 2009 for these investments. Therefore, overall impact on profit or loss of the Company, as a result of the sale of these companies, was equalled to nil.

19

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

8 Investment into subsidiaries and associates (cont'd)

The carrying values of sold companies' identifiable assets and liabilities as at the date of disposal and impact to Group profit or loss were:

	Carrying value
Investment property	24,700
Residential real estate	14,465
Loans granted	4,168
Other current assets	1,334
Cash	11
Total assets	44,678
Borrowings	(47,605)
Trade and other receivables	(10,081)
Deferred tax liability	(412)
Other payables	(1,802)
Total liabilities	(59,900)
Group's net assets sold	(15,222)
Non-controlling interests	(7)
Group's net assets attributed to equity holders of the parent	(15,215)
Profit from sale	15,215
Allowance for Group receivables from sold companies	(10,739)
Net loss of sold companies for a year ended 31 December 2010	(972)
Overall impact of sold companies to Group's net profit (loss) for a year ended 31 December 2010	3,504
Proceeds from sale	-
Cash sold	(11)
Net cash received	(11)

Other acquisitions and disposals

In the 2nd Quarter of 2010 the Company and the Group earned profit of LTL 57 thousand for the increase of price of compulsory sale of SEB shares (the shares were sold by a liquidated subsidiary in the past).

During the second half year of 2010 the Group sold joint ventures UAB RGJ investicija and the group structure of UAB MBGK was changed by transaction meant to separate from and to reckon with the other shareholder of UAB MBGK. One part of the transaction was an acquisition of 77.46 % of AB Invetex owned by the above mentioned company. The main assets of AB Invetex are loans granted to the Group, so the acquisition reduced Group liabilities by LTL 4,213 thousand. Due to the acquisition non-controlling interests increased by LTL 1,505 thousand (measured at the non-controlling interest's proportionate share of the net assets). During the second part of the transaction the Company sold shares of UAB MBGK, but later this company was reacquired by the Group as a subsidiary. The Company and the Group earned profit LTL 1,661 thousand and LTL 78 thousand, respectively.

In the 3rd Quarter the Company and the Group sold all the shares owned in AB Agrowill Group. The Group earned a profit of LTL 899 thousand from this withdrawal.

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

8 Investment into subsidiaries and associates (cont'd)

UAB Priemiestis

On 2 October 2010 the Group acquired 100 % shares of UAB Priemiestis from the municipality of Vilnius for LTL 2 251 thousand (all the amount paid in cash). The acquiree manages dwelling-houses in Vilnius district Naujoji Vilnia. The acquisition is expected to increase the group's market share in a facilities management segment and reduce cost through a synergy. Acquisition-related cost was equal to nil.

The fair values of the identifiable assets and liabilities of UAB Priemiestis at the acquisition date were:

	Fair values
Intangible assets (has not recognised in the financial statements of acquiree)	2,497
Property, plant and equipment	687
Inventories	29
Trade receivables	723
Other current assets	27
Restricted cash	44
Cash	249
Total assets	4,256
Non-current liabilities	(304)
Deferred income tax liability	(374)
Current liabilities	(1,327)
Total liabilities	(2,005)
Net assets	2,251
Goodwill	-

Acquired business contributed revenues of LTL 1,562 thousand and net profit of LTL 117 thousand to the Group for the period from 1 August 2010 to 31 December 2010.

If the acquisition of Priemiestis UAB had occurred on 1 January 2010, the consolidated revenue would have been LTL 270,110 thousand and consolidated net profit would have been LTL 50,250 thousand.

The fair value of acquired trade receivables is LTL 723 thousand. The gross contractual amount for the acquired trade receivables due is LTL 921 thousand, of which LTL 198 thousand is expected to be uncollectible.

AB Kauno Tiltai and Tiltra Group AB

On 30 November 2010 Company signed an agreement regarding the sale 44.78 % shares of Tiltra Group AB and 43.36 % shares of AB Kauno Tiltai for PLN 314 million (about 275 million), if the conditions precedent set out in the Agreement will be fulfilled. The mentioned companies compose the road and bridge construction segment. The Buyer of the shares is Trakcja Polska S. A., which main activity is a rail infrastructure construction. According to the Agreement the Company will acquire 12.5 % in the increased capital of Trakcja Polska valued at PLN 132 million (about LTL 115 million) and Trakcja Polska newly issued bonds, worth almost PLN 120 million (about LTL 103 million). After executing of set-off the Company will receive cash of PLN 62 million (about LTL 54 million). According to the Agreement the sale has to be closed in 1st quarter of 2011. All figures mentioned above are disclosed without costs related to the transaction.

Establishment of new companies and increase of share capital in owed ones

In December 2010 the Company established five new subsidiaries for the total LTL 50 thousand. Subsidiaries should be used for the development of new projects, in case of such a need. The Company invested LTL 23,385 thousand additionally to increased share capital of its subsidiaries converting granted loans.

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

9 Other revenues and expenses

9.1. Net changes in fair value on financial assets

	Group		Company
	2010	2009	2010	2009
Net gain (loss) from financial assets at fair value	(4,706)	(1,436)	3,337	(4,121)
Realised (loss) gain from available-for-sale investments	220	79	-	-
	(4,486)	(1,357)	3,337	(4,121)

9.2. Finance expenses

	Group		Company
	2010	2009	2010	2009
Interest expenses	(17,351)	(30,560)	(13,144)	(22,429)
Other finance expenses	(609)	(639)	(16)	(73)
	(17,960)	(31,199)	(13,160)	(22,502)

9.3. Other income

	Group		Company
	2010	2009	2010	2009
Interest income	1,730	2,149	8,030	12,469
Dividend income	-	-	300	9,000
Other income	2,650	1,863	67	7
	4,380	4,012	8,397	21,476

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

10 Discontinued operations

Discontinued operation

On March 31, 2009 the Management Board of Invalda AB approved entering into the contract with the Bank Snoras AB regarding the sale of Finasta Group companies (Bank Finasta AB, FBC Finasta, asset management companies Invalda Turto Valdymas and Invalda Asset Management Latvia, as well as Finasta Imoniu Finansai AB). The contract was signed on 1 April 2009. The disposal of the Finasta Group companies was completed on 16 September 2009. In April 2009 TOV Finasta was sold.

The results of the financial mediation segment for the year 2009 ended 31 December 2009 are presented below:

	2009
Revenue	5,540
Other income	1,757
Interest income	1,759
Net changes in fair value on financial assets	2,076
Allowances	(1,680)
Depreciation and amortisation	(667)
Other expenses	(15,700)
Operating profit (loss)	(6,915)
Interest expenses	(1,292)
Other finance expenses	(608)
(Loss) profit before tax from a discontinued operation	(8,815)
Income tax	1,274
(Loss) profit for the period from a discontinued operation (financial mediation)	(7,541)
(Loss) profit from sale of TOV Finasta	(319)
Reclassification adjustment for fair value reserve of Finasta Group included in profit (loss)	(1,145)
Reclassification adjustment for fair value reserve of Finasta Group included in profit (loss) (deferred tax)	56
Gain on sale of Finasta Group	15,019
(Loss) profit from a discontinued operation	6,070
Deficit (earnings) per share:	2009
Basic and diluted, from discontinued operation	0.14

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

11 Borrowings, issue of shares

During the General Shareholder Meetings which was held on 30 January 2010 it was decided to change the conditions of convertible bonds and to issue new convertible bonds of LTL 7.44 million. After realizing the decision a maturity of convertible bonds of LTL 25 million was extended until 1 July 2012 and new emission of convertible bonds of LTL 7.44 million (maturity - 1 July 2012) was issued.

On 30 January 2010, the Company received an application of D. J. Miseikis to convert 500,000 owned bonds (the nominal value of one bond is 100 LTL) to 9,090,909 ordinary registered AB Invalda shares (the nominal value of one share is 1 LTL). On 3 February 2010 new By-laws of AB Invalda were registered. According to them the share capital of the Company was increased by LTL 9,091 thousand, from LTL 42,569 thousand till LTL 51,660 thousand. The outstanding emissions amount (LTL 40,909 thousand) was recognised in share premium. Retrospectively the liabilities of the Company are decreased by LTL 50,000 thousand.

In January 2010 an extension to loan agreement was signed. It was agreed to postpone the maturity of loan until 30 June 2012 with DnB Nord bank for all amount (the current liability as of 31 December 2010 was LTL 94,350 thousand, as of 31 December 2009 was LTL 101,046 thousand).

In February 2010 a loan agreement extension was signed with Siauliu bank regarding postponement the maturity of the loan amounting LTL 18 million until 15 April 2011.

In August 2010 a loan agreement extension was signed with AB Snoras bank regarding postponement the maturity of the loan until 16 September 2011 (the current liability as of 31 December 2010 was LTL 24,254 thousand).

These actions resulted in a significant decrease of the Company's current liabilities and improvement of the Company's liquidity.

During the year 2010, the Group and the Company refunded respectively LTL 31,376 thousand and LTL 20,933 thousand of loans, to credit institutions respectively LTL 23,733 thousand and LTL 10,698 thousand.

On 31 December 2010 the loans of LTL 69,413 thousand, provided by banks to the real estate segment's companies, were classified nominally according to IAS 1 as current because formally it has not been suspended a complying of the loan covenants. However any notice on premature loan repayment was not received. Taking into account management's assessment of interaction with the bank's representatives, the actual loans maturity is later than 12 months after the end of the reporting period and equal to maturity determined in the loans agreements. Also during $1^{\text{st}}$ quarter it was signed loan agreements' amendment regarding an extension of maturity terms of LTL 15,459 thousand loan until 2012 (the loan to a subsidiary of the real estate segment provided by DnB Nord bank) and the loan has been recognised as non-current.

12 Related party transactions

Receivables from related parties are presented in gross amount (without allowance).

The Company's transactions with related parties during the year 2010 and related quarter-end balances were as follows:

2010 Company	Sales to related parties	Purchases from related parties	Receivables from related parties	Payables to related parties
Loans and borrowings	8,929	2,249	80,935	46,553
Rent and utilities	-	134	-	128
Transfer of tax losses within the Group	986	-	986	-
Dividends	300	-	-	-
Other	-	69	-	5
	10,215	2,452	81,921	46,686
Shareholders and management	916	2	-	-

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

12 Related party transactions (cont'd)

The Company's transactions with related parties during the year 2009 and related quarter-end balances were as follows:

2009 Company	Sales to related parties	Purchases from related parties	Receivables from related parties	Payables to related parties
Loans and borrowings	12,838	2,110	118,382	19,769
Rent and utilities	-	121	-	23
Dividends	9,000	-	-	-
Other	7	85	620	6
	21,845	2,316	119,002	19,798
Shareholders and management	-	93	-	1,334

The Group's transactions with related parties during the year 2010 and related quarter-end balances were as follows:

2010 Group	Sales to related parties	Purchases from related parties	Receivables from related parties	Payables to related parties
Loans and borrowings	640	221	9,029	-
Rent and utilities	147	-	67	-
Road and bridge construction segment	273	57	109	-
Furniture production segment	-	590	-	162
Other	51	2	12	-
	1,111	870	9,217	162
Shareholders and management	3,309	10	13,975	-

The Group's transactions with related parties during the year 2009 and related quarter-end balances were as follows:

2009 Group	Sales to related parties	Purchases from related parties	Receivables from related parties	Payables to related parties
Loans and borrowings	1,082	692	43,734	3,190
Rent and utilities	536	10	99	-
Roads and bridges construction segment	521	-	245	-
Other	100	-	620	-
	2,239	702	44,698	3,190
Shareholders and management	571	441	7,967	5,847

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AB INVALDA

INTERIM CONSOLIDATED AND PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

(all amounts are in LTL thousand unless otherwise stated)

13 Events after reporting period

On 4 January 2011 the Group acquired 51 % of shares of UAB Lauko gelininkystes bandymu stotis for LTL 911 thousand (all amount paid in cash) from Valstybes turto fondas (the State Property Fund which is the operator of the government owned shares). The acquiree operates in field of growing and trading of ornamental trees and shrubs. Operations of the company acquired are meant to be continued also developing the owned real estate. Acquisition-related cost was equal to nil.

Based on a preliminary assessment, the fair values of the identifiable assets and liabilities of UAB Lauko gelininkystes bandymu stotis at the acquisition date were:

	Fair values
Property, plant and equipment	1,433
Inventories	531
Trade receivables	11
Other current assets	29
Cash	275
Total assets	2,279
Current liabilities	(82)
Total liabilities	(82)
Net assets	2,197
Non-controlling interests	(1,077)
Acquired net assets	1,120
Profit from bargain purchases	(209)
Purchase consideration transferred	911